OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

      ------------------------------------X  S.J.R.: 6183
      APPEAL OF                              DOCKET NOS.:FI 230139-RO
                                          :              FK 210002-RT
         LEV REALTY, OWNER and                                       
                            PETITIONER    :  DOCKET NO.: DE 230130-OM

                               DOCKET NO FI 230139-RO

      The above-named petitioners filed petitions for administrative review of an 
      order issued on August 23, 1991 by a Rent Administrator concerning the 
      housing accommodations known as 1775 East 18th Street, Brooklyn, New York, 
      Various Apartments.

      Subsequent thereto, the owner filed a petition in the Supreme Court 
      pursuant to Article 78 of the Civil Practice Law and Rules, having deemed 
      this petition denied by operation of Law.  This resulted in an order of the 
      Court directing the Division to issue a determination of the owner's 
      administrative appeal.

      The Commissioner has consolidated the tenant's petition, under Docket No. 
      FK 210002-RT, along with the owner's petition, under Docket No. Fi 230139- 
      RO, for processing herein.

      The owner of the subject premises initiated the proceeding below by filing 
      an application for a major capital improvement (MCI) rent increase for the 
      controlled and stabilized apartments in the premises based on the 
      installation of mail boxes, lobby doors, entrance doors, pointing and 
      waterproofing and incinerator upgrading at the subject premises.  The owner 
      submitted documentation in support of the application, including copies of 
      contracts, contractors' certifications, and cancelled checks for the work.

      On August 23, 1991 the Rent Administrator issued the order appealed herein 
      in which the owner was granted an MCI rent increase for the pointing and 
      waterproofing and lobby door installations.  The owner was denied a rent 
      increase for the mailbox installation as it did not fully qualify with the 
      requirements for an MCI improvement rent increase.  The requested rent 
      increase for the entrance door and incinerator upgrading installations were 
      denied as it was determined that these items had not exceeded their useful 
      life at the time of replacement.  The Administrator further noted that 
      under Docket Nos OM 2317 (11/19/81) and 2AC 574159-206 (8/17/82) rent 
      increases had been granted for the entrance door and incinerator upgrading 


          DOCKET NUMBER: FI 230139-RO; RK 210002-RT
      The Commissioner has reviewed all the evidence of the record relevant to 
      the issues raised by these petitions for review.

      In her petition the tenant, in substance asserts, that the cost of the 
      pointing and waterproofing is not representative of the amount of work done 
      to the subject premises.  The tenant further asserts that the pointing and 
      waterproofing and lobby doors are items whose upkeep are part of the 
      general building maintenance for which the owner should not be granted an 
      MCI rent increase.

      In its petition the owner, by its representative, asserts, in pertinent 
      part, that the Administrator incorrectly denied the application for the 
      incinerator upgrading and entrance door installations.  The owner further 
      asserts that the Agency's useful life schedule was promulgated by an 
      Operational Bulletin (90-2) which was issued more than one year after the 
      owner's MCI rent increase application had been filed with the agency and 
      therefore the Bulletin should not apply to the order appealed herein.

      After careful consideration, the Commissioner is of the opinion that the 
      tenant's petitions for administrative review should be denied; and that the 
      owner's petition should be granted in part.

      Rent increases for major capital improvements are authorized by Section 
      2202.4 of the Rent and Eviction Regulations for rent controlled apartments 
      and Section 2522.4 of the Rent Stabilization Law for rent stabilized 
      apartments.  Under rent control, an increase is warranted where there has 
      been since July 1, 1970 a major capital improvement required for the 
      operation, preservation, or maintenance of the structure.  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.

      The Commissioner notes that the Administrator properly applied these 
      principles to the owner's MCI application and those installations for which 
      increases were allowed, with the exception of "lobby" doors, as hereafter 
      noted, fit the above definition and their costs were substantiated by the 
      owner.  Accordingly, the Commissioner is of the opinion and finds that, 
      despite the tenant's assertions to the contrary, the Administrator's 
      approval of the owner's installations for MCI rent increase was correct,
      except as indicated hereafter.

      The Commissioner notes that it has been the agency policy to prescribe 
      useful lives for MCI eligible installations and, in fact, Operational 
      Bulletin 80-2 sets forth already existing agency policy.  Pertinent to the 
      order appealed herein is the 15 year useful life for lobby/vestibule 
      entrance doors.  The record reveals that in November 1981 (under Docket No. 
      Om 2317), the owner received an MCI rent increase for the installation, in 
      1977, of lobby entrance doors (as distinct from front entrance/vestibule 
      doors), albeit the Administrator's order appealed herein reflects the 
      allowed cost ($4,000.00) of the newly installed lobby doors.  Rejected was 
      the cost ($6,100.00) of the newly installed front entrance/vestibule doors.  
      Accordingly, the Commissioner is of the opinion that the Administrator's 


          DOCKET NUMBER: FI 230139-RO; RK 210002-RT
      order should be modified to reflect an additional allowable cost of 
      $2,100.00 for the newly installed front entrance/vestibule doors for which 
      no rent increase had previously granted.  No increase is warranted for the 
      lobby door, however, since the useful life of the prior installation had 
      not expired.

      The records of the Division discloses that under Docket No. 2AC 574159-206 
      the owner was granted a rent increase of $.73 per room, per month based on 
      the 1977 upgrading of the two incinerators which service the subject 
      premise pursuant to the provisions of Administrators Interpretation No. 18 
      (February 1977).  The record further discloses that in 1987 the owner 
      performed similar incinerator upgrading work at the subject premises at a 
      substantiated cost of $24,000.00 consistent with the public policy need to 
      maintain then current air pollution control standards.  Accordingly, 
      Commissioner is of the further opinion and finds, under the facts and 
      circumstances of the instant case, that the prior incinerator upgrading 
      performed ten years earlier does not preclude a subsequent major capital 
      improvement rent increase.  However, as provided for in Administrators' 
      Interpretation No. 18, relied on by the owner, the indicated "rent increase 
      for subsequent upgrading with the scrubber or other similar devices shall 
      be reduced by the amount of the previous grant".

      In view of the foregoing, the Commissioner finds that the owner is entitled 
      to an additional $.60 per room, per month, effective September 1, 1991 for 
      rent controlled apartments and effective September 1, 1989 for rent 
      stabilized apartments, to the computed as follows.  The additional allowed 
      cost is to reflect the balance of monies expended for vestibule/front 
      entrance doors ($2,100.00) and for the cost of incinerator upgrading 
      ($24,000.00).  Total of $26,100.00 - 60- 328 rooms = $1.33 less the prior 
      grant (under Docket No. 2AC 574159-206) (of $.73) per room per month 
      results in a corrected grant of $.60 per room per month.

      The Commissioner further notes that, in addition to the aforementioned 
      permanent rent increase, the owner is entitled to collect temporary arrears 
      to cover the period between the effective date, as indicated above, and the 
      first rent payment date following the issuance of this order.

      THEREFORE, in accordance with provision of the Rent and Eviction 
      Regulations for New York City and the Rent Stabilization Law and Code, it 

      ORDERED, that the tenants petition for administrative review Docket No. FK 
      210002-RT be, and the same hereby is denied; that the petition for 
      administrative review under Docket No. FI 230139-RO be, and the same hereby 
      is ranted in part; and that the Rent Administrator's order be, and the same 
      hereby is modified in the manner and to the extent hereinabove indicated; 
      and it is, further


          DOCKET NUMBER: FI 230139-RO; RK 210002-RT
      ORDERED, that the tenants may pay any arrears in rent resulting from the 
      order in 12 equal monthly installments.


                                           JOSEPH A. D'AGOSTA
                                       Acting Deputy Commissioner


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