GERTZ PLAZA
                     92-31 UNION HALL STREET
                     JAMAICA, NEW YORK 11433

-------------------------------------X   ADMINISTRATIVE REVIEW
APPEALS OF                               FA210078RT,   FA210117RT,
          VARIOUS TENANTS OF             FA210432RT,   FB210273RT,
          160 OCEAN PARKWAY              FB210274RT,   FB210310RT
                                         RENT ADMINISTRATOR'S
                                         DOCKET NO.:  DC210129OM



The above-named petitioner-tenants timely filed or re-filed 
administrative appeals against an order issued on December 7, 1990, 
by the Rent Administrator (92-31 Union Hall Street, Jamaica, New 
York) concerning the housing accommodations known as 160 Ocean 
Parkway, Brooklyn, New York, various apartments, wherein the Rent 
Administrator granted major capital improvement (MCI) rent 
increases for the stabilized apartments in the subject premises 
based on the installation of new windows and a new intercom system 
at the premises.

The Commissioner notes that the subject building is a cooperative.

In these petitions, the tenants contend, variously and in 
substance, that the old windows needed repair, not replacement, and 
the owner should not receive a rent increase for work performed to 
correct defects, that the tenants were promised they would not have 
to pay for windows, that the intercom did not need replacing, that 
the new windows and the new intercom are defective, that the money 
for the improvements came from "a reserve of a loan" and not from 
maintenance payments, that the owner received a tax abatement for 
the window installation, that the increase should not be permanent, 
and that the increase is burdensome.

One tenant contends that the windows were not inspected, one tenant 
complains that no hearing was held, and one tenant contends that 
the room count for his apartment was incorrect.


In response, the owner asserts, in substance, that the 
installations qualify as major capital improvements, that 
allegations of defective improvements were found to be invalid by 
a DHCR inspector, that the money for the improvements came from a 

          working capital account funded from maintenance payments and not 
          from the reserve fund, that any reductions due to tax abatements 
          should be handled by the DHCR, and that it never meant to forgo 
          applying for an MCI rent increase.

          After a careful consideration of the entire record, the 
          Commissioner is of the opinion that these petitions should be 
          granted in part.

          Rent increases for major capital improvements are authorized by 
          Section 2522.4 of the Rent Stabilization Code for rent stabilized 
          apartments.  Under rent stabilization, the improvement must 
          generally be building-wide; depreciable under the Internal Revenue 
          Code, other than for ordinary repairs; required for the operation, 
          preservation, and maintenance of the structure; and replace an item 
          whose useful life has expired.

          It is the established position of the Division that the building- 
          wide installation of new apartment windows and/or public area 
          windows to replace windows which are 25 or more years old, and the 
          installation of a new intercom system constitute major capital 
          improvements for which a rent increase adjustment may be warranted, 
          provided the owner otherwise so qualifies.

          The record discloses that the owner substantiated its application 
          in the proceeding below by submitting to the Rent Administrator in 
          support thereof copies of accepted contractor proposals, invoices, 
          contractors' certifications and cancelled checks for the 
          improvements in question.  Physical inspections of the subject 
          premises revealed that the intercom system was working properly.

With regard to the tenants' contentions that the owner paid for the 
improvements with a loan, the fact that an owner may have obtained 
a loan and used such funds to pay for the improvements does not bar 
an owner's entitlement to a major capital improvement rent 

As to the tenants' contention that the owner received a tax 
abatement which should have been taken into account, the 
Commissioner notes that the owner's application for or receipt of 
a J-51 tax benefit based on MCI installations does not preclude the 
entitlement to a rent increase therefor.  However, pursuant to the 
Rent Stabilization Law, tenants of stabilized apartments may share 
in such benefits, but only as to improvements commenced after June 
28, 1988, as in the instant proceeding.  The record herein fails to 
indicate whether such benefits have been granted for the intercom 
installation.  Accordingly, the determination herein is without 
prejudice to the rights of the tenants to make application to the 
"Owner Individual Unit" of the DHCR for such rent adjustment as may 
be warranted.


          ADMIN. REVIEW DOCKET NO. FA-210066-RT ET AL.

          Regarding the contention that the MCI rent increase should not form 
          a permanent part of the rent structure, the Commissioner notes that 
          the permanent nature of an MCI increase has been upheld by the 
          Court of Appeals of the State of New York in the Matter of Ansonia 
          Residents Association v. DHCR. 

          As to the contention of various tenants that the MCI rent increase 
          is a hardship, the Commissioner is not unmindful of the possibility 
          that the rent increase may prove burdensome to some tenants. 
          However, the Commissioner is constrained by the applicable 
          statutory and regulatory provisions to grant such increases as are 

          A tenant who has a valid Senior Citizen Rent Increase Exemption 
          Order (SCRIE) is exempted from that portion of the increase which 
          would cause the rent to exceed one-third of the tenant's household 
          monthly disposable income.  A tenant who may be entitled to this 
          benefit may contact the New York City Department of the Aging by 
          calling (212) 240-7000.

          Concerning the allegation of a room count discrepancy, the 
          Commissioner notes that the owner may not charge the tenant based 
          on a greater number of legal rooms for MCI purposes.  This order is 
          issued without prejudice to the tenant filing a complaint with this 
          Division based on a rent overcharge, if the facts so warrant.

          The Commissioner notes that in response to the MCI application, 
          several tenants asserted that the owner had promised that the 
          tenants would not have to pay for the window installation.  In 
          support thereof, several tenants submitted copies of a letter 
          addressed to a tenant and signed by the prior managing agent (Jake 
          LaManna of LaManna & LaManna) in which he stated "As agreed upon, 
          we will come and repair your windows.  When the new windows are 
          installed, you will not be charged for them."  In reply, the owner 
          submitted a copy of a letter addressed to the apartment corporation 
          and signed by the current managing agent (Vincent LaManna of 
          LaManna & LaManna) in which he stated "...the letter signed by the 
          previous managing agent, Jake LaManna, regarding the new windows 
          were [sic] intended to mean that no tenant would have to pay an 
          initial charge for the installation of these windows.  It did not 
          mean that a legal rent increase would not be forthcoming.  Clearly 
          the tenants misunderstood his intentions."

          Notwithstanding the owner's explanation of the intention behind the 
          prior managing agent's statement, the Commissioner is of the 
          opinion and finds that the owner, through its managing agent, made 
          an unconditional promise to install new windows at the subject 
          premises free of charge to all tenants.


          ADMIN. REVIEW DOCKET NO. FA-210066-RT ET AL.

          In view of the foregoing, the Commissioner finds that such portion 
          of the MCI rent increase which related to the window installation 
          should be deleted from the Administrator's order and that the owner 
          is entitled to a rent increase for the intercom installation only, 
          in the amount of $0.31 per room, per month (approved cost of 
          intercom $3,231.25  60 months = $53.85  172 rooms = $0.31), 
          effective for the subject rent stabilized apartments as of July 1, 
          1989, the first rent payment date one month after completion of the 
          filing of the application by service of notice of same on the 
          affected tenants.

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

          ORDERED, that these petitions be, and the same hereby are, granted 
          in part, and the order of the Rent Administrator be, and the same 
          hereby is, modified in the manner and to the extent indicated above 
          to delete so much of the rent increase as pertained to the window 
          installation; and that as so modified said order be, and the same 
          hereby is affirmed; and it is, further

          ORDERED, that with respect to the subject rent stabilized 
          apartments, the owner shall credit any excess rent collected at the 
          rate of 20% per month, commencing the first rent payment date after 
          issuance of this order, until all overpayments have been refunded.


                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner


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