DIVISION OF HOUSING AND COMMUNITY RENEWAL
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA

                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          ------------------------------------X   ADMINISTRATIVE REVIEW
          IN THE MATTER OF THE ADMINISTRATIVE     DOCKET NO.: EH530167RO
          APPEAL OF
                     RUTHANN RICHERT, C/O
                  410 LENOX APTS., INC.
                                                  RENT ADMINISTRATOR'S
                               PETITIONER         DOCKET NO.: DD510035OM
          ------------------------------------X

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

          On August 16, 1990, the above named petitioner-owner filed a 
          petition for administrative review (PAR) of an order issued on July 
          25, 1990 by the Rent Administrator, concerning the housing 
          accommodations known as 410 Lenox Avenue, New York, NY, various 
          apartments, wherein the Administrator denied the owner's 
          application for a major capital improvement (MCI) rent increase 
          which was based on the installation of mailboxes, entrance doors, 
          upgraded lighting and an intercom system, because of an outstanding 
          rent reduction order.

          The Commissioner has reviewed all of the evidence in the record and 
          has carefully considered that portion of the record relevant to the 
          issue raised by the administrative appeal.

          On July 25, 1990 the Rent Administrator issued the order here under 
          review, finding that a building-wide rent reduction order under 
          Docket No. AJ530112B, issued on September 3, 1987, is still in 
          effect.

          In this PAR, the owner requests reversal of the Rent 
          Administrator's order and contends, in substance, that since the 
          rent reduction order was issued before the owner purchased the 
          building, the owner was unaware of the outstanding rent reduction 
          order; and that the DHCR policy of denying MCIs due to the 
          existence of an outstanding rent reduction order is in excess of 
          DHCR's statutory authority.

          The tenants did not file objections to the owner's application 
          although afforded the opportunity to do so. 

          In addition, the owner submitted as evidence a letter dated 
          December 18, 1990 from the tenant who filed the complaint that 
          resulted in the rent reduction order being granted, stating that 
          the owner has repaired all problem conditions to her satisfaction.












          ADMIN. REVIEW DOCKET NO. EH530167RO

          After a careful consideration of the entire evidence of record, the 
          Commissioner is of the opinion that this petition should be denied.

          A review of Division records discloses that no application for rent 
          restoration was filed by the owner with DHCR.

          The owner's contention that it should not be responsible for the 
          rent reduction order because it was issued prior to its purchase of 
          the building is without merit. The purchaser of a building steps 
          into the shoes of its predecessor in interest and assumes all the 
          liabilities as well as assets of the previous owner, including any 
          rent reduction orders that were issued prior to the purchase of the 
          building.  The existence of all DHCR orders and proceedings is 
          available to purchasers and new owners of buildings upon request of 
          the Division.

          The owner's assertion that DHCR has exceeded its statutory mandate 
          is erroneous.  An owner of a rent stabilized apartment is required 
          by Section 26-514 of the Administrative Code of the City of New 
          York to maintain all required services and the failure to do so as 
          evidenced by the issuance of a building-wide rent reduction order 
          bars the owner from "applying for or collecting any further rent 
          increase."

          This statutory mandate is codified in Sections 2523.4(a) and 
          2522.4(a)(13) of the Rent Stabilization Code and further amplified 
          in Policy Statement 90-8, by providing that where there is an order 
          in effect determining a failure to maintain a building-wide service 
          which resulted in a rent reduction, such order will constitute a 
          bar to obtaining an MCI rent increase.  A subsequent restoration of 
          rent based upon a finding of service restoration will result in the 
          prospective elimination of this sanction.

          This bar applies despite any acknowledgements by the tenants that 
          services have been restored.

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

          ORDERED, that this petition be and the same hereby is, denied and 
          that the order of the Rent Administrator be, and the same hereby 
          is, affirmed. 



          ISSUED:



                                                                          
                                                  LULA M. ANDERSON  
                                                  Deputy Commissioner