FI530232RO
                                  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


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          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
          APPEAL OF                               DOCKET NO.:  FI530232RO
                                                  
          945 ST. NICHOLAS REALTY CORP.           RENT
                                                  ADMINISTRATOR'S DOCKET
                                                  NO.: DB530056B
                                  PETITIONER            
          ----------------------------------x


            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                  IN PART AND MODIFYING RENT ADMINISTRATOR'S ORDER

               On September 4, 1991 the above named petitioner-owner filed a 
          Petition for Administrative Review against an order of the Rent 
          Administrator issued July 31, 1991. The order concerned various 
          housing accommodations located at 945 St. Nicholas Ave., New York, 
          N.Y.  The Administrator directed restoration of services and 
          ordered a rent reduction for failure to maintain required services.  

               The Commissioner has reviewed the record and carefully 
          considered that portion relevant to the issues raised by this 
          appeal.

               This proceeding was commenced on July 10, 1989 when 21 tenants 
          joined in filing a Statement of Complaint of Decrease in Building- 
          Wide Services wherein they alleged, in sum, that the owner was not 
          maintaining certain required building services including the fact 
          that the owner had removed the central heat and hot water system 
          without the consent of the tenants.

               The owner was served with a copy of the complaint and afforded 
          an opportunity to respond. The owner filed a response on January 8, 
          1990 and stated that several of the complaining tenants no longer 
          lived in the subject building, that it required more time to 
          investigate the complaint and that the records of prior DHCR 
          inspections would prove that it maintained services in the subject 
          building.
           
               The Administrator ordered a physical inspection of the subject 
          apartment.  The inspection was conducted on January 10, 1990 and 
          revealed that there was no boiler in the building, that the tenants 
          have their own heating system (electric) and that there was no 
          evidence of chipped and cracked stair treads throughout the public 
          areas or dirty public areas.












          FI530232RO


               On January 31, 1990 the Administrator sent the tenants a 
          request for information regarding the heat and hot water condition.  
          The tenants were asked when the change from owner supplied heat to 
          tenant provided heat took place, the type of heating system now in 
          use, whether the change resulted in increased costs to the tenants 
          and how long the tenants were in occupancy.

               Various tenants filed responses to the Administrator's request 
          for information.  The Administrator was informed that the boiler 
          had been removed in 1988, that electric baseboard heaters were now 
          in use and that the tenants had been made to incur increased costs 
          by the change.  The Administrator was subsequently notified that 
          the tenants had instituted an action in Housing Court and that, on 
          January 14, 1991, Judge Klein issued an order directing the owner 
          to reinstall the central heating system in the building.  The 
          court's order specifically found that the owner had violated the 
          NYC Housing Maintenance Code by removing the boiler.

               On July 25, 1990 the Administrator sent the owner a request 
          for information.  The owner was asked to submit any authorization 
          it had obtained from the Division to make the change from central 
          heating to the current situation.  The owner's response, submitted 
          on August 22, 1990, was an application to modify services wherein 
          it stated that the old central heating system "had outlived its 
          usefulness" and was subject to frequent breakdowns and that it was 
          permitted, under the Multiple Dwelling Law, to make the change from 
          central heating to individual apartment heating.

               A second inspection was conducted on June 13, 1991 and 
          revealed evidence of chipped and cracked stair treads throughout 
          the public areas and that the public areas were dirty.

               The Administrator issued the order here under review on July 
          31, 1991.  Rent stabilized tenants who joined the complaint were 
          granted a rent reduction equal to 25% of the maximum legal rent for 
          the removal of the central heat and hot water system.  
          Additionally, a reduction of an amount equal to the most recent 
          guideline adjustment for the lease's commencing before September 1, 
          1989 was ordered for the conditions relating to the stairs and 
          dirty public areas.  Rent controlled tenants were granted a rent 
          reduction equal to 25% of the maximum legal rent for the removal of 
          the central heat and hot water system plus $12.00 for the other 
          conditions.

               On appeal the owner states that it was acting within the law 
          when it removed the boiler and converted to individual apartment 
          heating, that a DHCR inspection conducted on December 11, 1989 
          revealed adequate heat and hot water, and that the DHCR inspection 
          in this proceeding conducted on January 10, 1990 did not reveal any 
          evidence of cracked or chipped stair treads or dirty public areas.  
          The petition was served on the tenants on October 25, 1991.






          FI530232RO


               The tenants filed responses and stated, in sum, that the owner 
          had not restored services and that, instead of being in compliance 
          with the law, the owner's removal of the boiler and change to 
          individual apartment heating was both a violation of the NYC 
          Housing Maintenance Code and Judge Klein's above described order.

               After careful review of the evidence in the record, the 
          Commissioner is of the opinion that the petition should be granted 
          in part and the order here under review should be affirmed as 
          modified herein.

               Pursuant to Section 2523.4 of the Rent Stabilization Code, 
          tenants may file a complaint alleging decreased services and the 
          Administrator is required to order a rent reduction to the level in 
          effect prior to the most guidelines adjustment where it is found 
          that the owner is not maintaining required services.  Required 
          services are defined in Section 2520.6 (r) as that space and those 
          services provided or required to be provided on the applicable base 
          date including the furnishing of heat and hot and cold water. 

               Pursuant to Section 2202.16 of the Rent and Eviction 
          Regulations for New York City the Administrator may order a rent 
          reduction if it is found that the owner is not maintaining 
          essential services.  The rent reduction should approximate the 
          decrease in rental value of the subject premises because of the 
          decreased services.

               The owner had not filed for prior approval from the Division 
          for this modification of services which resulted in the transfer to 
          the tenants of the owner's obligation to provide heat and hot water 
          services with substantial increased costs to the tenants. The 
          Commissioner is of the opinion that, in these circumstances, the 
          undisputed removal of the boiler and installation of individual 
          electric baseboard heaters without prior approval and in violation 
          of a court order constitutes a failure to maintain required or 
          essential services for which a rent reduction is warranted. The 
          Commissioner finds, however, that the remedy for a failure to 
          maintain required services for rent stabilized tenants is, 
          according to Section 2523.4, a rent reduction to the level in 
          effect prior to the most recent guidelines adjustment. Accordingly, 
          the rent reduction of 25% of maximum legal rent reduction is 
          revoked in the order hereunder review and a rent reduction of an 
          amount equal to the percentage of the most recent guidelines 
          adjustments for the tenants' leases commencing before September 1, 
          1989 is ordered for the removal of the central heat and hot water 
          system.  The tenants may file overcharge complaints with the 
          Division based on the additional costs they have incurred as a 
          result of the installation of individual heat and hot water 
          systems.

               The findings regarding the stairs and dirty public areas are 












          FI530232RO

          revoked.  The Commissioner's review of the January 10, 1990 
          inspection report reveals that the inspector reported that the 
          stairs and public areas were being maintained indicating that these 
          conditions were addressed by the owner in response to the 
          complaint.  It was improper to order a reinspection for these 
          conditions based on this report.  The $12.00 per month rent 
          reduction ordered for rent controlled tenants is revoked.

               In sum, the order here under review is modified with regard to 
          rent stabilized tenants to delete the findings regarding the stairs 
          and dirty public areas and  is further modified to substitute the 
          rent reduction described above for the 25% of maximum legal rent 
          reduction ordered by the Administrator.  With regard to rent 
          controlled tenants, the order here under review is modified to 
          delete the findings regarding the stairs and dirty public areas as 
          well as the $12.00 per month rent reduction ordered by the 
          Administrator.  The finding and rent reduction ordered based on the 
          removal of the central heat and hot water system is affirmed.

               With regard to rent stabilized tenants, the automatic stay of 
          the retroactive rent abatement for rent stabilized tenants, which 
          resulted from the issuance of the Administrator's order is vacated 
          upon issuance of this order and opinion.  The owner may file for 
          rent restoration when services have been fully restored.  
            
               THEREFORE, pursuant to the Rent Stabilization Law and Code and 
          Rent and Eviction Regulations it is 

               ORDERED, that this petition be, and the same hereby is granted 
          in part, and that the Rent Administrator's order be, and the same 
          hereby is, affirmed as modified herein.  Rent stabilized tenants 
          who owe arrears based on the Commissioner's decision herein may pay 
          off said arrears in twenty-four (24) equal monthly installments.  
          Rent controlled tenants who owe arrears may pay off said arrears in 
          installments of $12.00 per month.  Any tenant who vacates their 
          apartment owes arrears immediately.

          ISSUED:



                                                                             
                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner
                                   
    

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