Adm. Rev. Docket Number: EK 430095-RO
                                 STATE OF NEW YORK
                           OFFICE OF RENT ADMINISTRATION
                                    GERTZ PLAZA
                              92-31 UNION HALL STREET
                              JAMAICA, NEW YORK 11433

        APPEAL OF                           :  ADMINISTRATIVE REVIEW
                                            :  DOCKET NO. EK 430095-RO
             308 OWNERS CORP.               :
                                            :  DOCKET NO. CJ 430067-OM
                              PETITIONER    :  

        On November  18,  1990  the  above-named  petitioner-owner  filed  a
        Petition for  Administrative  Review  against  an  order  issued  on
        October 15, 1990 by the Rent Administrator, 92-31 Union Hall Street, 
        Jamaica, New York concerning housing  accommodations  known  as  308
        East 79th Street, New York, New York,  various  apartments,  wherein
        the application was denied.

        Thereafter the owner commenced a proceeding  in  the  Supreme  Court
        pursuant to Article 78 of the Civil Practice Law and  Rules,  having
        deemed its petition denied by operation of law.  This resulted in  a
        court ordered stipulation remanding the proceeding to  the  Division
        for further consideration and the determination of the petition  for
        administrative review herein.

        The instant matter stems  from  a  major  capital  improvement  rent
        increase application filed with the Division in October 1983 by  the
        owner of the subject premises (a cooperative corporation) on  behalf
        of the holder of unsold shares and  individual  purchasers  of  rent
        regulated apartments (39 in total) predicated on the installation
        of 919 replacement windows at a total claimed cost  of  $314,061.36.
        In  support  thereof  the  applicant  submitted  copies  of  various
        documentation including a contract, contractor's  certification  and
        cancelled  checks.    The   applicant   subsequently   advised   the
        Administrator that said installation was paid for with  the  use  of
        reserve fund monies but that the fund  was  reimbursed,  over  a  12
        month  period,  by  special  assessment  of  all   shareholders   of
        apartments which currently received replacement windows,  on  a  per
        window cost basis.

        The denied order appealed herein was issued on grounds that  windows
        were installed in a piecemeal fashion and thus failed to qualify  as
        a major capital  improvement.   Said  order  was  issued  after  the
        petitioner further advised the Administrator that  new  windows  had
        previously been  installed  by  cooperative  shareholders  of  other
        apartments (63) who independently replaced them at their own expense 
        and who consequently were not charged the special assessment for the 

        current project.

        In  this  petition  for  administrative  review  the  owner   herein
        contends,  in  substance,  that  in  early  1986  approximately   60

        Adm. Rev. Docket Number: EK 430095-RO
        proprietary lessees, acting  with  the  approval  of  the  Board  of
        Directors, installed new replacement  windows  in  their  respective
        apartments using one contractor to supply  and  install  same;  that
        such action was taken by those shareholders of the cooperative since 
        the Board was not yet prepared to expend corporate funds on  such  a
        project,  that  approximately  one  year   later   the   cooperative
        corporation, employing the same contractor who performed  the  prior
        window replacement, completed the installation of new windows in all 
        remaining apartments; that such a project,  does  not  constitute  a
        piecemeal installation;  and  that  the  owner  acted  equitably  in
        dealing with its members and rent regulated tenants as the requested 
        increase  is  based  solely  on  the  cost  of  the   second   round

        Various tenants submitted answers to  the  petition  in  which  they
        state that the decision to install windo s  in  the  remaining  two-
        thirds of the apartments  was  an  after-thought  of  the  Board  of
        Directors for cosmetic purposes; that  the  old  windows  functioned
        properly and did not require replacement; and that windows were  not
        replaced building-wide since stairwell windows (60)  have  not  been

        After a careful consideration of the entire record, the Commissioner 
        is of the opinion that this proceeding should  be  remanded  to  the
        Rent Administrator for further processing.

        It is the established position of the Divisi n  that  the  building-
        wide installation of new apartment and/or  public  area  windows  to
        replace windows that are 25 or  more  years  old  (as  is  the  case
        herein) constitutes a major capital improvement  for  which  a  rent
        increase  may  be  warranted,  provided  the  owner   otherwise   so
        qualifies.  In this respect the Commissioner notes that  work  of  a
        piecemeal nature  or  ordinary  repairs  and  maintenance  does  not
        qualify as a major capital improvement.

        It would appear that the Administrator's determination that the work 
        was not a major capital improvement was predicated on the length  of
        time for the work to be completed;  and  that  the  work  was  never
        contemplated as a building-wide project.

        It is, however, undisputed that the initial replacement  of  windows
        was performed by a group of proprietary lessees, acting in  concert;
        and  that  approximately  one  year   thereafter   the   cooperative
        corporation,  employing   the   same   contractor,   completed   the
        installation of all remaining apartment windows.   The  Commissioner
        is of the  opinion,  under  the  facts  and  circumstances  of  this
        particular case, that this two phase project  did  not  represent  a
        "haphazard" piecemeal installation; and that the subsequent 


        Adm. Rev. Docket Number: EK 430095-RO

        replacement of all remaining apartment windows as part of a  unified
        plan   and   consecutively   timed    project    was    sufficiently
        contemporaneous as to substantively comply the  requirements  for  a
        major capital improvement.  Accordingly, the Commissioner  deems  it
        appropriate to remand  this  proceeding  to  the  Administrator  for
        further  processing.   Upon  the  remand  the  Administrator  should
        consider such allegations and contentions of the tenants  raised  in
        the proceeding below and upon the remand with respect to the quality 
        of the work performed and the maintenance of services.

        THEREFORE,  in  accordance  with  the   provisions   of   the   Rent
        Stabilization Code and the Rent & Eviction Regulations for the  City
        of New York, it is

        ORDERED, that this petition be, and the same hereby  is  granted  to
        the extent of remanding this proceeding to  the  Rent  Administrator
        for further processing in accordance with this order and opinion. 


                                        ELLIOT SANDER
                                        Deputy Commissioner

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