STATE OF NEW YORK
                      DIVISION OF HOUSING AND COMMUNITY RENEWAL
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

      ------------------------------------X 
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEALS OF                             DOCKET NOS.:
      VARIOUS TENANTS OF 315 WEST 57TH ST.:  ED 410066-RT;ED 410141-RT
      AND 330 WEST 58TH ST., NEW YORK        ED 410208-RT;ED 410221-RT
      NEW YORK, AND PARK TOWERS SOUTH        EF 410105-RT;EF 410060-RT
                            PETITIONERS   :  EF 410061-RT;EF 410101-RT
      ------------------------------------X  ED 430065-RT;EF 430345-RO

            ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW

      The above-named tenants and owner timely filed or refiled petitions for 
      administrative review of an order issued on March 26, 1990 by a Rent 
      Administrator (Gertz Plaza) concerning the housing accommodations known as 
      315 West 57th Street and 330 West 58th Street, New York, New York, various 
      apartments.

      Since the petitions pertain to the same order and involve common issues of 
      law and fact, the Commissioner deems it appropriate to consolidate them for 
      disposition.

      The instant proceeding was commenced by the owner filing, in June 1988, an 
      application for a major capital improvement (MCI) rent increase predicated 
      upon the pointing  and waterproofing of the subject buildings (275 units), 
      where necessary, during the period October 1986 through May 1988 at a 
      claimed cost of $887,111.00.

      In response to the application several tenants asserted the continued 
      presence of exterior water seepage into their respective apartments.  By 
      notices dated October 3, November 1, and December 15, 1989 the owner was 
      afforded the opportunity to investigate the specific allegations of those 
      tenants who challenged the adequacy of the work performed and to advise the 
      Administrator when required repairs had been completed.

      On January 8, 1990 the owner submitted to the Division signed statements 
      from various tenants to the effect that repairs had been completed to their 
      satisfaction.  In addition the owner submitted affidavits (4) of the 
      building superintendent who stated that the "leaks have been cured" with 
      respect to apartments 10G, 10J and 17E at 330 West 58th Street and 
      apartment 20B at 315 West 57th Street, the tenants of which refused to sign 
      a similar letter of completion and who subsequently refuted the owner's 
      submission.

      On February 23, 1990 and March 7, 1990 physical inspections were conducted 
      of the said four apartments, the report of which confirmed the existence of 
      extensive water leaks and leak damage throughout apartment 17E and to a 
      lesser extent in the other three apartments.

      On March 26, 1990 the Administrator issued the order appealed herein which 
      granted in part the application and authorized a rent increase adjustment 








          ADMIN. REVIEW DOCKET NO.: ED 430065-RT, et al.



      of $10.27 per room, per month based on pointing and waterproofing of the 
      subject premises, which work was found to qualify as a major capital 
      improvement.  Said order explicitly exempted apartments 10G, 10J, 17E and 
      20B from this rent increase.

      In their petitions the tenants of various apartments (7J, 9J, 18E and 20A 
      at 315 West 57th Street; 8D, 15F, 17E and 17F at 30 West 58th Street) 
      contend, in substance, that despite the MCI installation, new leaks 
      continue to emerge and/or reemerge in their respective apartments.  In 
      addition the tenant of apartment 9J at 330 West 58th Street asserts that 
      the rent increase granted by the Administrator should not continue in 
      perpetuity.

      In response to the petition (ED 430065-RT) filed by the tenant of apartment 
      17E, the owner states that said petition should be dismissed since the 
      tenant was exempt from the rent increase and is thus not prejudiced by the 
      Administrator's order.

      In its petition the owner contends, in substance, that the Administrator's 
      order should be modified, in accordance with past practice, to permit the 
      collection of the MCI rent increase from apartments 10G, 10J, 17E and 20B 
      "after leaks have been corrected" rather than permanently exempting them 
      from the increase.

      After a careful consideration of the entire record, the Commissioner is of 
      the opinion that these petitions should be denied.
       
      At the outset the Commissioner notes, and the record confirms, that the 
      tenants of apartments 7J, 9J, 18E and 20A at 315 West 57th Street and the 
      tenants of apartments 15F and 17F at premises 330 West 58th Street, were 
      served by the Administrator with notices of the instant application and 
      that they failed to respond thereto during the time this proceeding was 
      pending before the Administrator.  Fundamental principals of the 
      administrative appeal process and Sections 2529.6 of the Rent Stabilization 
      Code prohibit a party from raising issues on appeal which were not raised 
      below.  The tenants of said apartments could have raised the very issues 
      before the Rent Administrator which they seek to raise for the first time 
      on appeal.  Accordingly, the Commissioner is constrained to foreclose 
      consideration of these issues in this appeal proceeding.  

      It is the established position of the Division that comprehensive pointing 
      and waterproofing, as necessary (as distinguished from spot pointing to 
      correct current water leaks) constitutes a major capital improvement for 
      which a rent increase may be warranted, provided the owner otherwise so 
      qualifies.  In this regard the record discloses that to the extent 
      recognized by the Administrator, the owner substantiated its applications 
      by the submission of various supporting documentation including a copy of 
      the contract, the contractor's certification, a diagram of the subject 
      premises showing the areas where work was performed, and cancelled checks 
      in substantiation of the cost of same.

      With regard to the petition filed by the tenant of apartment 8D at 330 West 
      58th Street, the record contains a signed statement from said tenant 


          ADMIN. REVIEW DOCKET NO.: ED 430065-RT, et al.




      confirming that necessary corrective action had been taken by the owner, 
      upon which the Administrator had reason to rely in issuing the order 
      appealed herein.

      With respect to the petition filed by the tenant of apartment 9J at 330 
      West 58th Street, to the effect that the rent increase should be eliminated 
      upon the expiration of the amortization period, it is the position of the 
      Division and the New York State Court of Appeals has ruled in the Matter of 
      Ansonia Residents Associates v. DHCR, that a major capital improvement rent 
      increase forms a permanent part of the rent structure.

      With regard to the petition (ED 430065-RT) filed by the tenant of apartment 
      17E at 330 West 58th Street, to the effect that said apartment continues to 
      suffer from exterior water seepage, the Administrator's order specifically 
      exempted said apartment from the rent increase, as noted by the owner.  
      Since this tenant is not aggrieved by the Administrator's order, the 
      Commissioner finds that this petition should be denied.

      Furthermore, with regard to the owner's petition in which it is urged that 
      the Administrator erred in permanently exempting specific apartments from 
      the MCI rent increase, the Commissioner is of the opinion that the decision 
      to exempt an apartment(s) from an MCI rent increase, as opposed to 
      suspending the collection thereof, rests within the discretion of the 
      Administrator.  A determination in this regard is made in accordance with 
      the facts and circumstances of each individual case.

      The record discloses that the tenants of apartments 10G, 10J, 17E and 20B 
      alleged the existence of continued water leaks and leak damage in their 
      respective apartments to which the owner responded by the submission of 
      affidavits from an employee as "evidence that leaks have been cured" when 
      in fact subsequent agency inspections confirmed the existence of extensive 
      water leaks and leak damage in these four apartments.  In view of the 
      foregoing, the Commissioner is of the further opinion and finds that the 
      Administrator did not abuse his discretion in exempting these four 
      apartments from the rent increase as opposed to denying the entire 
      application on grounds that the work performed was not building-wide in 
      that it did not inure to the benefit of all tenants.  Accordingly, the 
      Commissioner finds that this petition should be denied.

      The determination herein is without prejudice to the right of any tenant  
      to file an appropriate complaint for a rent reduction based on a diminution 
      of services with the Division if the owner is not now maintaining all 
      required services.

      THEREFORE, in accordance with the provisions of the Rent Stabilization Law 
      and Code, it is













          ADMIN. REVIEW DOCKET NO.: ED 430065-RT, et al.




      ORDERED, that these petitions be, and the same hereby are denied; and that 
      the order of the Rent Administrator be, and the same hereby is affirmed.

      ISSUED:










                                                                    
                                           JOSEPH A. D'AGOSTA
                                          Deputy Commissioner

    

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