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

      APPEALS OF                             DOCKET NOS.:                        
      CARL N. WATSON, PABLITA NICHOLSON,  :              FA210035RT  
      CYNTHIA STEWART, NORMA MYERS,                      FA210505RT        
      CLAUDETTE ROWE                                     FA210506RT
                            PETITIONERS   :              FA210367RT
      ------------------------------------X              FA210460RT

                                             RENT ADMINISTRATOR'S
                                             DOCKET NO.: CA210059OM


      The above-named petitioner-tenants timely filed or refiled 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 328 Sterling Place, Brooklyn, New York, 
      Various apartments, wherein the Administrator granted major capital 
      improvement (MCI) rent increases for the stabilized apartments in the 
      subject premises based on the installation of a new boiler/burner at the 

      In their petitions the tenants contend, in substance, that the old 
      boiler/burner was not properly maintained and had to be replaced and that 
      the cost of such replacement should not be "passed on" to the tenants.  
      Various tenants raise heat and/or hot water complaints as well as other 
      unrelated service complaints.

      In response, the owner asserts that the costs of major capital improvements 
      can be "passed along" to tenants pursuant to the Rent Stabilization Code.

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

      Rent increases for major capital improvements are authorized by Section 
      25222.4 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 installation of a 
      new boiler/burner meets the definitional requirements of a major capital 
      improvement.  In fact the tenants confirm that the condition of the old 
      heating system was such that its replacement was necessary for the 
      continued operation, preservation and maintenance of the structure.


          DOCKET NUMBER: FA 210035-RT, et al.
      The Commissioner notes that the petitioners herein raised no objections to 
      the quality or adequacy of the installations while this proceeding was 
      before the Rent Administrator although they were afforded the opportunity 
      to do so.

      Accordingly, pursuant to Section 2529.6 of the Rent Stabilization Code, the 
      tenants' allegations may not be considered now when offered for the first 
      time on administrative appeal.
      The record in the instant case, which includes copies of proposals, 
      contractors' certifications, cancelled checks and governmental approvals 
      for the work performed, indicates that the owner correctly complied with 
      the applicable procedures for a major capital improvement; and that the 
      Rent Administrator correctly computed the appropriate rent increases based 
      on the proven cost of the various improvements.  The tenants have not 
      established that the increase should be revoked.

      This Order and Opinion is issued without prejudice to the tenants right to 
      file the appropriate application for a decrease in rent based on a decrease 
      in services, if the facts so warrant.

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


                                           JOSEPH A. D'AGOSTA
                                       Acting Deputy Commissioner


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