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

          -------------------------------------X   ADMINISTRATIVE REVIEW
          IN THE MATTER OF THE ADMINISTRATIVE      DOCKET Nos.:  GB410141RT
          APPEALS OF                               GB410342RT,   GB410343RT
                                                   GB410344RT,   GB410345RT
                    VARIOUS TENANTS OF             GB410346RT,   GB410337RT
                    21 ESSEX STREET                GC410053RT
                    NEW YORK, NY   
                    
                                                   RENT ADMINISTRATOR'S
                                                   DOCKET NO.:  CK430187OM

                                   PETITIONERS
          -------------------------------------X

          ORDER AND OPINION REMANDING PROCEEDING ON APPEAL

          On various dates, the above named petitioner-tenants timely filed 
          petitions for administrative review (PARs) against an order issued 
          on January 31, 1992 by a Rent Administrator (Gertz Plaza) 
          concerning the housing accommodations known as 21 Essex Street, New 
          York, New York, various apartments, wherein the Rent Administrator 
          determined that the owner was entitled to a rent increase based on 
          the installation of a major capital improvement (MCI).

          The Commissioner deems it appropriate to consolidate these 
          petitions for disposition since they pertain to the same order and 
          involve common issues of law and fact.

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

          The owner commenced this proceeding on November 21, 1988 by 
          initially filing an application for a rent increase based on the 
          installation of gas fired heater units in each of the 16 apartments 
          in the premises, at a total cost of $20,800.00.

          Various tenants objected to the owner's MCI application, alleging, 
          in substance, that they have to provide their own fuel for the 
          heater and hot water; that the new units are defective and break 
          down; that repairs to the units are needed; and that the cost of 
          the MCI installation is too high.  Additionally, the tenant in 
          apartment 14 claims that the owner is not maintaining required 
          services.














          ADMIN. REVIEW DOCKET NO. GB-410141-RT

          The owner responded to tenants' objections by contending, in 
          substance, that New York City required the owner to remove the old 
          illegal heating units; that the cost of the new gas fired heater 
          units was substantiated in the application; that the tenants do 
          supply the fuel for their units; and that the unit in apartment 12 
          did break down but the owner had repaired the unit.

          The tenant in apartment 12 responded to the owner's  contentions, 
          claiming that the gas fired heater unit had not been working since 
          August 1990; that the tenant has been using an electrical heating 
          unit; and that in the tenant's prior apartment, apartment 6, the 
          heater unit was out of order for three years.

          The DHCR scheduled physical inspections for apartment 12 for 
          January 7, 1992 and January 13, 1992 but the inspections were not 
          conducted because the inspector could not get access to the 
          apartment.  There were no responses from the tenant in apartment 12 
          regarding the inspection notices.

          On January 31, 1992, the Rent Administrator issued the order here 
          under review finding that the installation qualified as an MCI, 
          determining that the application complied with the relevant laws 
          and regulations based upon the supporting documentation submitted 
          by the owner, and allowing appropriate rent increases for rent 
          controlled and rent stabilized tenants.

          In their petitions, various tenants contend that the gas fired 
          heaters are either not working or not working properly; that the 
          $20,800 cost  of the installation is too high; that some heater 
          units make noises; and that the tenants pay for their own fuel.  
          Additionally, the tenant in apartment 12 claims that he did not 
          receive the  "first notice".

          The owner, in response to the tenants' claims, stated, in 
          substance, that the system was installed in 1988 and the tenants 
          are only complaining now because of the pending rent increase; and 
          that the owner makes repairs as soon as he is notified of a 
          problem.  Additionally, the owner submitted a letter from P.R.K. 
          Mechanical to show that the owner's service person tried to gain 
          access to the apartments to do repair work but was unsuccessful.

          Some of the tenant-petitioners responded to the owner's answer 
          stating that the system does not always work, supplies insufficient 
          heat, and makes loud noises; that a repair person from P.R.K. 
          Mechanical came at 7AM without making an appointment; and that they 
          did not let the serviceman in because of the "possibility of 
          getting burglarized".

          The Commissioner is of the opinion that these petitions should 
          remanded for further consideration.








          ADMIN. REVIEW DOCKET NO. GB-410141-RT

          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 
          Code 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 evidence of record in the instant case indicates that none of 
          the gas fired heater units in the apartments were actually 
          inspected although twenty-five percent of the tenants complained of 
          dysfunctional units.  The Commissioner finds that the Rent 
          Administrator incorrectly granted the owner's application without 
          an inspection  of the individual units.  In their petitions, 
          tenants make similar complaints and the owner's answer indicates 
          that he has not made repairs albeit due to the fact that the 
          tenants did not permit access to the apartments on what may have 
          been inadequate notice. 

          This proceeding must be remanded for inspection of the petitioner- 
          tenants' gas fired heater units to verify the adequacy of the MCI 
          installation.

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

          ORDERED, that these petitions be, and the same hereby are, granted 
          to the extent of remanding this proceeding to the Rent 
          Administrator for further processing in accordance with this order 
          and opinion.  The automatic stay of that part of the Rent 
          Administrator's order directing a retroactive rent increase is 
          hereby continued until a new order is issued upon remand.  However, 
          the Administrator's determination as to a prospective rent increase 
          is not stayed and shall remain in effect until the Administrator 
          issues a new order upon remand.

          ISSUED:



                                                       ____________________
                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner
           






    

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