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

          ------------------------------------X   SJR 6829 (Deemed Denial)
          APPEAL OF                               DOCKET NO.:GE410260RO

               Tatiana Copeland,                  DRO DOCKET NOS.:
                                                  TENANT: LAEL SCOTT


          On June 5, 1992 the above named petitioner-owner filed a Petition 
          for Administrative Review against an order issued on May 19, 1992 
          by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New 
          York concerning housing accommodations known as Apartment 2 at 136 
          West 11th Street, New York, New York wherein the Rent Administrator 
          determined that the subject building had not been substantially 
          rehabilitated to the extent necessary to exempt it from the Rent 
          Stabilization Law and Code, that the subject apartment fell under 
          the jurisdiction of the Rent Stabilization Code, and that the 
          tenant was entitled to a renewal lease.  

          Subsequent thereto, the petitioner-owner filed a Petition in the 
          Supreme Court pursuant to Article 78 of the Civil Practice Law and 
          Rules requesting that the "deemed denial" of its Petition for 
          Administrative Review be annulled.  The proceeding was remitted to 
          the Division of Housing and Community Renewal (DHCR), and the 
          owner's petition is herein decided on the merits.

          The issue in this appeal is whether the Rent Administrator's order 
          was warranted.

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

          The following observations apparent from the record, particularly 
          from the architect's drawings and the owner's before-and-after 
          photographs, are set forth to provide a framework in the context of 
          which the parties'contentions can later be viewed.  Because of some 
          conflicts between the drawings and the photographs, parenthetical 

          DOCKET NO. GE410260RO

          comments are also included.

          The subject building is a landmark building in an historic 
          district.  It is of brick with interior dimensions of approximately 
          21 feet by 48 feet, sharing party walls with brick buildings on 
          either side.  There are five habitable floors, plus a cellar with 
          boiler, meter room and storage spaces.  The ground floor, which 
          previously had two apartments, has a floor two or three feet below 
          the level of the sidewalk in front and approximately level with the 
          yard in back.  The floor above this is known as the first floor, 
          and is entered through the main entrance after climbing about a 
          dozen steps.  It formerly had one apartment.  The tenant's second 
          floor apartment, taking up the entire floor, is above this.  The 
          third floor formerly had two apartments.  The top floor formerly 
          had one apartment.  This floor is about two-thirds the length of 
          the other four floors, being set back in both the front and the 
          rear of the building.   A roof over the front and rear portions of 
          the third floor apartment comprises the rest of the length of the 
          building at this level.  As part of the renovation the ground and 
          first floors were made into one duplex apartment, as were the third 
          and fourth floors. The tenant's second floor apartment was 
          unchanged in this respect.  There was, and is, also a lengthwise 
          wall extending from the front to the back of the building on all 
          floors but the top one.  This wall divides the building into areas 
          approximately fourteen feet and seven feet wide.  The public 
          hallway and stairs occupy the middle section of the narrow portion.  
          On various floors the front and rear sections of the narrow portion 
          were used for vestibule, storage room, kitchen, bathrooms, 
          bedrooms, alcoves or closets.  

          As shown on the plan sheets, the renovation moved some of the walls 
          that extended across the narrow portion, changing the function of 
          some of the spaces.  Internal stairs were built between the ground 
          and first floors to create a duplex; the same thing was done 
          between the third and fourth floors.  The lengthwise wall had 
          several doorways between the wide and narrow portions on each 
          floor.  There were approximately 16 doorways in the wall on the 
          four floors where it existed; the renovation left them unchanged 
          except for closing one opening, creating two openings, and moving 
          one opening about 18 inches.  In at least one area (the front of 
          the third floor) the lengthwise wall was of lathe-and-plaster 
          construction.  With respect to the partitions in the wide portion 
          of the building: On the ground floor approximately one-third of the 
          previously-existing partitions remained in place.  On the first and 
          second floors there was no change in location of the partitions.  
          On the third floor the large majority of the partitions remained in 
          the same location.  The fourth floor, having no lengthwise wall, 
          had no "wide portion," but the majority of partitions were removed; 
          new ones were added mostly to enclose two new bathrooms.

          DOCKET NO. GE410260RO

          Among other things, the General Notes on the cover sheet of the 
          architect's plans provided the following:

               2.   Any historic fabric damaged during the course 
                    of construction shall be restored to match the 
                    original at no cost to owner.

               3.   Existing woodwork, plasterwork, console 
                    brackets...etc to be protected.

               4.   All existing stairs to be cleaned, inspected, 
                    all damaged areas to be replaced or patched to 
                    match existing areas except as noted.

               5.   All existing doors of original period in areas 
                    of demolition shall be saved along with their 
                    architraves and baseboards to be reused in 
                    areas of new construction.


               20.  Field check exist. plaster wall and ceiling 
                    surfaces for soundness.  Replace loose or 
                    damaged materials as req'd.  Extreme caution 
                    shall be exercised in area w/ ornamental 

               22.  Repair and make operable all window sash, as 

               23.  Repair and make operable all interior window 
                    shutters as required.

               24.  Inspect all fireplaces and flues; make 
                    operable those indicated on floor plans.  
                    Repair other damaged fireplaces.             

          The "Room Finish Schedule" indicates that sixty  percent of the 
          doors on the ground, first, second and third floors were to be 

          DOCKET NO. GE410260RO

          existing.  (The fourth floor got all new doors.)  The owner's 
          "before" photographs show three partitions where lathe and plaster 
          were removed but where the heavy wood studs (most vertical members 
          being approximately three by four inches, with the sides and tops 
          of doorways being approximately six by four inches) remained.  In 
          two of the three instances about 10-12 inches of wall and molding 
          was left intact at the top of the wall.  In several instances 
          workmen have nailed boards to the existing joists overhead on the 
          fourth floor.  (In a later affidavit the owner's architect 
          contended that more work was done on the ceilings, walls, floors 
          and stairs than was shown on the plansheets.)  One photograph shows 
          the railing of the public stairs covered to protect it from damage.  
          The owner's "after" photographs show what in many instances appear 
          to be the same door and ceiling moldings present in the "before" 
          photographs, particularly where there are ornate wood millwork or 
          plaster moldings, and where there are unique doors and doorways 
          with curved tops.  It is difficult to tell if the wood flooring was 
          sanded and refinished, as opposed to being replaced, although the 
          one-foot-square parquet pattern shown in two "before" photographs 
          is similar to the pattern in two other rooms in "after" 
          photographs.  The "before" photographs show water damage in various 
          locations, particularly to the wooden porch.  Inside the building 
          there were water stains, peeling paint and plaster, and one 
          instance of fallen (or torn out) lathe and tile in the first floor 
          bathroom next to the porch.  The "after" photographs show two 
          modern kitchens and four modern bathrooms in the two duplex 
          apartments.  The "before" photographs show several fireplaces 
          covered by plywood to protect them from damage during work in the 
          rooms, as well as one not yet covered; the ornate fireplaces are 
          visible in the "after" photographs.

          The architect's plans list limited work to be done in the 
          complainant's apartment, which occupies the entire second floor.  
          A forced-air heat pump/air conditioning system, including about 15 
          feet of ductwork, was installed, plus electric baseboard heaters.  
          Exhaust vents were installed in the kitchen and bathroom.  Other 
          than wiring necessary for these items, the electric wiring was to 
          remain as existing.  The only new plumbing was a drain for air 
          conditioner condensate plus a new riser to the third and fourth 
          floors.   Of the ten doors in the apartment, eight were to be as 
          existing and two new.  The "Room Finish Schedule" indicates that, 
          other than carpeting in the public hall, all existing floors, 
          walls, ceilings and trim on the second floor were to be repaired,  
          rather than installed new.  (The owner and tenant also apparently 
          split the cost of installing carpeting inside the apartment.) 

          In addition to the brick building, there was an eight foot deep 
          wooden extension, originally a three-story porch, added to the back 
          of the building.  At the level of the ground and first floors the 
          porch was enclosed (although uninsulated), heated and wired for 

          DOCKET NO. GE410260RO

          electricity, with french doors on the ground floor level, and 
          windows (plus a door to nowhere) at the first floor level.  The 
          "before" photographs show considerable water damage to this porch.  
          The roof of the second story of the porch served as a deck for the 
          tenant.  Her deck was unenclosed, although there was a roof over 
          two-thirds of it.  As part of the renovation the porch was torn 
          down and rebuilt, again in wood, with an awning above the tenant's 
          deck in place of a roof.  (The tenant's engineer said the porch 
          could have been repaired, the owner's engineer said it was too 
          deteriorated to repair.)  

          The Altered Building Application proposed to: "[r]epair exterior 
          masonry and cast iron; replace existing gas-fired boiler; provide 
          new Bathrooms and Kitchens; repartition Units; install new 
          decorative Stairs; provide Rear Wood-Frame Porch with new to match 
          existing; provide new electric heat pumps and ducts; repair 
          plaster; repaint; replace roofs."   At the time that the roof work 
          began four of the seven existing units were occupied.  During the 
          course of the work all but the complainant vacated, for reasons set 
          forth infra.  The tenant temporarily left from about mid-May 
          through the end of August, 1986.  (While the work in and on the 
          building was generally done from about mid-1985 to mid-1987, the 
          contract with Huff Enterprises, which did the work inside the 
          building and which was paid about 80% of the total cost of about 
          $410,000, was signed on May 9, 1986.  Work apparently began on May 
          19, 1986; Huff Enterprises submitted its claim for the final 
          $70,425.00 on December 30, 1986.)  

          In the proceedings prior to this appeal, the owner submitted two 
          affidavits from her architect, Martin Rosenblum of Philadelphia.  
          In them he contended in substance that:
               1)   Prior to the renovation the building was in a 
                    state of severe structural deterioration, and 
                    the apartments were in deplorable condition.   

               2)   At the time work began the complainant was the 
                    only occupant in any of the seven then- 
                    existing apartments.  Three of them were 
                    uninhabitable, two of them largely because the 
                    wooden extension was in a state of collapse.  
                    [In his later affidavit Mr. Rosenblum claimed 
                    that two of them were uninhabitable.  In an 
                    affidavit in the appeal proceeding he 
                    contended that four of them were  
                    uninhabitable.]   All apartments had one 
                    degree or another of water damage.  The 
                    mechanical and electrical systems were 
                    outmoded and needed replacement.  The heating 
                    system was inoperable in parts of the 
                    building.  The plumbing was failing, and     
                    cracked cast iron pipes leaked sewage into the 

          DOCKET NO. GE410260RO

                    cellar.   There were many water lines leaking 
                    throughout the building.  The interior 
                    stairways were structurally deficient.   The 
                    roof was decayed and leaking. Several windows 
                    were beyond repair.

               3)   The building was essentially renovated from 
                    cellar to roof.  Replacement of the roof 
                    commenced in late 1985 and was completed in 
                    early 1986.  Restoration of the facade, 
                    including total re-pointing, began soon 
                    thereafter.  The iron work was removed, 
                    restored, and replaced.  Work on the roof 
                    included  the installation of skylights for 
                    the fourth floor bathrooms.  Complete interior 
                    alterations and rehabilitation mostly occurred 
                    between late Spring, 1986 and the end of the 
                    year.  Mechanical, plumbing and electrical 
                    systems were replaced to meet new building 
                    codes.  All units received new heating and 
                    central  air conditioning systems.  Public 
                    stairways and hallways were restored from the 
                    ground floor through the fourth floor.  
                    Extensive alterations were made to all floors 
                    and all historic millwork and plaster moldings 
                    were meticulously restored.  The rear garden 
                    was  renovated.  The rear building extension 
                    was demolished and rebuilt, resulting in a new 
                    deck and awning for the tenant.  In addition 
                    to the replacement of electrical and plumbing 
                    systems in the subject apartment, and the 
                    installation of heating and air conditioning 
                    systems, a new toilet and bathroom floor were  
                    installed.  In addition, the bath tub walls 
                    were retiled, the apartment repainted and 
                    carpeting replaced.

               4)   Extensive alterations were made to the other 
                    units, with seven small units having been made 
                    into three large ones, with a seven-room 
                    duplex below the subject apartment and a six- 
                    room duplex  above.  Approximately $400,000.00 
                    was expended on the substantial rehabilitation 
                    and restoration of the landmark building.  Due 
                    to the extensiveness of the work it was 
                    necessary for the tenant to vacate for a 
                    period of time.  

               5)   The tenant's architect obviously was not in 
                    any apartment other than the subject unit.  He 
                    is incorrect in stating that there were "no 
                    structural alterations to the building."  

          DOCKET NO. GE410260RO

          Several apartments were combined, altering the 
                    location of the kitchens and the bathrooms, 
                    and new stairwell openings were made.  The 
                    public stairway from the first to second floor 
                    was distressed, and was disassembled and 
                    reconstructed.  The public stairways and hall- 
                    ways were rehabilitated from the ground floor 
                    to the fourth floor.  The rear extension, a 
                    deteriorated, uninsulated, makeshift enclosed 
                    porch not originally constructed as a 
                    habitable space, was demolished and rebuilt, 
                    based upon the recommendation of the owner's 
                    structural engineer.  The tenant's architect 
                    had no basis to evaluate the extent of the 
                    deterioration of the rear extension and the 
                    need for its replacement.  The party walls 
                    clearly could not have been destroyed or 
                    altered without damaging the adjoining 
                    buildings.  The landmarked building facade 
                    could not be altered.  Interior partitions 
                    were removed and relocated where necessary to 
                    provide serviceable units.  The plumbing was 
                    by and large replaced, except for serviceable 
                    plumbing stacks and risers that were left 
                    intact rather than risk damaging the historic 
                    fabric of the building by replacing such 
                    sections.  The heating system had outlived its  
                    useful life, and barely operated despite 
                    repeated repairs.
               6)   The tenant's architect avoids a discussion of 
                    the overall work undertaken, instead 
                    nitpicking at the few areas that were not 
                    completely rearranged.  His assessments are 
                    based only on the floor plans and a very 
                    limited familiarity with the building.  Even 
                    the tenant's engineer, who seems to lack as 
                    much experience in the analysis of older, 
                    historic buildings as the owner's structural 
                    engineer, found structural problems with the 
                    rear extension,and discussed demolition.

          In the prior proceedings the owner contended in substance that:

               1)   Caselaw takes precedence over DHCR decisions; 
                    any additional DHCR criteria not in statutes 
                    for exemption from rent regulation due to 
                    substantial rehabilitation are invalid.

               2)   In Pape v. Doar, 160 A.D.2d 213, N.Y.S. 2d 344 
                    (A.D. 1st Dept. 1990) in a situation almost 
                    identical to the  present one, the Appellate 

          DOCKET NO. GE410260RO

          Division rejected a contention that a building 
                    must be vacant at the start of work, and that 
                    a gut demolition was required. The Court, in 
                    saying that the exemption is to be strictly 
                    construed, meant that the  DHCR could not add 
                    requirements not in the substantial 
                    rehabilitation statute, Emergency Tenant 
                    Protection Act ("ETPA") Section 5(a)5.  DHCR's 
                    requirements do not advance the purpose of 
                    Section 5(a)5, which is "to give owners an 
                    investment incentive to recoup rehabilitation 
                    costs free of stabilized rents," as stated in 
                    Pape v. Doar.

               3)   The N.Y.C. Civil Court in Goodman v. Ramirez, 
                    100 Misc. 2d 881, 420 N.Y.S. 2d 185 held that 
                    the entire building did not have to be vacant 
                    to qualify for the exemption. 
               4)   If one or more apartments are permitted to 
                    remain occupied and unchanged, it is apparent 
                    that "substantial rehabilitation" does not as 
                    the DHCR claimed require a "gut demolition."  
                    In fact, the DHCR has issued at least two 
                    prior determinations holding that gutting is 
                    not necessary.  In Docket No.CB 430012-RO, 
                    issued August 10, 1988, there had been "a 
                    retention of some preexisting elements"  
                    relating to the "vestibule and existing 
                    stairways," and in Docket No. ART 4590-Q, 
                    issued April 15, 1986, the owner had only 
                    installed new floor and roof joists "where 
                    necessary," but the DHCR found that there had 
                    been a substantial rehabilitation in both 
               5)   Even a requirement that the building be vacant 
                    at the time of renovation was complied with, 
                    since the tenant had to vacate from May 15, 
                    1986 to September  1, 1986 due to the 
                    extensiveness of the work undertaken.  

          In the proceedings prior to this appeal, the tenant submitted 
          affidavits from an architect and an engineer.  Carl Stein, the 
          tenants's architect, stated in substance that, based on a review of 
          the floor plans, on many visits to the complainant's apartment and 
          the fourth-floor apartment prior to  the commencement of work, on 
          visits to the complainant's apartment after completion of work, and 
          on his familiarity with the tenant's deck, the building's common 
          hallways and staircases, the facade, and ironwork facing the 
          street, it was apparent to him that:

          DOCKET NO. GE410260RO

               1)   There were no structural alterations to the 
                    party walls, the front and rear masonry walls, 
                    or a sustaining partition.  The interior 
                    partitions throughout the building remained 
                    largely untouched, with any changes being 
                    minimal in nature and performed primarily to 
                    facilitate the installation of convenience 
                    staircases to create two duplex apartments.  

               2)   Hardly any changes were made in the 
                    complainant's apartment, other than repair of 
                    water-damaged walls and ceilings, retiling of 
                    the bathroom wall and floor, the installation 
                    of a heating grill, replacement of functioning 
                    bathroom fixtures with new fixtures, the 
                    installation of a new heating system in a 
                    space that was previously available to the 
                    tenant as a closet, and the presence of a new 
                    deck, with a canvas awning in place of the 
                    previous roof, due to the owner's demolition 
                    and rebuilding rather than repair of the rear 

               3)   Not all the major building-wide systems were 
                    changed.  The main plumbing lines were left in 
                    place.  The plumbing work was mainly repairs, 
                    plus minor additional work related to the 
                    relocation of some fixtures a short distance.  
                    The replacement of plumbing supply branch 
                    lines, although a significant repair, is a 
                    periodic maintenance item that does not signal 
                    the potential end of a building's useful life.

               4)   None of the interior work had structural 
                    implications.  While the demolition and 
                    rebuilding of the wood rear extension was 
                    structural work, the costs for substantial 
                    rehabilitation should be discounted by the 
                    difference in price between the replacement 
                    work which was performed and the repair work 
                    which could have been performed. In addition, 
                    the historic preservation work such as repair 
                    of the iron fence and repair of the brownstone 
                    facade did  not affect the habitability of the 
                    apartments, and the cost of such work should 
                    be excluded from the cost of substantial 
                    rehabilitation claimed by the owner. 

               5)   Contrary to the statements of the owner's 
                    architect that "in the absence of the 
                    rehabilitation, the housing units at the 
                    subject building would have been inevitably 

          DOCKET NO. GE410260RO

          lost to decay and the subject building would 
                    have continued to structurally deteriorate 
                    until it would have eventually collapsed," 
                    with a simple program of repairing the damage 
                    caused by neglect on the part of the owners, 
                    and a program of normal building maintenance, 
                    the building could have continued in its then 
                    present form for many decades.  This was not a 
                    South Bronx or East Harlem tenement with 
                    systematically rotted joists.  The interior    
                    finishes were basically sound except where 
                    failure to repair leaks resulted in local 
                    water damage. 
               6)   While the owner's architect might consider the 
                    headering off of joists to create two openings 
                    for convenience stairways for duplex 
                    apartments to have structural implications, 
                    such installation of private staircases was 
                    performed solely for the owner's purposes 
                    rather than being necessary to preserve the 
                    integrity or historic  uniqueness of the 
                    building; neither staircase in any way changed 
                    the basic structural system of the building.  
                    The disassembly and reconstruction of the 
                    public stairway from the first to second floor 
                    was nothing more than the repair of an 
                    existing building component.  The re-building, 
                    rather than  repair, of the rear extension was 
                    done solely for the owner's convenience having 
                    to do with the replanning of the lower duplex.  

               7)   None of the partition work and fixture 
                    relocation necessary to alter the apartment 
                    count were to replace deteriorated partitions 
                    that threatened the habitability of the 
                    building, and none substantially affected the 
                    structure of the building.

               8)   The bulk of the work was entirely 
                    discretionary, resulting from the owner's 
                    desire to convert 136 West 11th Street from a 
                    7-unit building to a 3-unit building.  While 
                    it is undeniably true that there were areas 
                    within the building that required repair as a 
                    result of the failure of the owners to 
                    properly maintain the building over a number 
                    of years, it is equally true that the  
                    building was fundamentally sound and that with 
                    appropriate repairs and maintenance, it could 
                    have continued to be occupied exactly as it 

          DOCKET NO. GE410260RO

          had been prior to the renovation.  The nature 
                    of the work was predominantly cosmetic repair, 
                    non-structural partition work related to the 
                    reduction of the number of dwelling units, 
                    repair of deterioration that resulted from the 
                    owner's neglect, and repair or replacement of 
                    systems that one expects to  repair or replace 
                    in the normal course of the building's life.  
                    The fact that a number of these things 
                    occurred at one time is the obvious result of 
                    the fact that they had not been done in the 
                    normal course of the building's use when they 
                    were initially needed.             

          The tenant also enclosed an affidavit from an engineer, Robert S. 
          Hansen, who concluded that the rear extension, basically a porch 
          whose first two levels had been enclosed, heated and electrified, 
          while requiring some structural repair and extensive cosmetic 
          attention, was not in immediate danger of collapse, and that repair 
          and renovation was the most reasonable and practical solution.

          In the proceedings prior to this appeal the tenant in substance 
          made the following contentions, in addition to contentions 
          repeating statements made by her architect and her engineer:
               1)   When the owner bought the building in 
                    November, 1983 two of the seven apartments 
                    were vacant, the prior owner having evicted 
                    one tenant in 1977, and the tenants of     
                    another apartment having left in exchange for 
                    a waiver of past rent, with the prior owner 
                    leaving both apartments vacant to make the 
                    building more attractive to potential 
                    purchasers.  Another tenant died in 1984, and 
                    the tenants of three other apartments were 
                    paid $30,000.00, $30,000.00 and $60,000.00 to 
                    leave in 1985 and early 1986, with the 
                    $60,000.00 payment being made to a tenant who 
                    did not vacate until Spring 1986, after the 
                    work began in late 1985.  Contrary to the 
                    owner's claims, the tenants left not because 
                    of conditions in the building but because they 
                    chose to accept the sums offered by the owner 
                    in exchange for their vacating.  
               2)   The building was not vacant when the work 
                    commenced.  While the tenant was out of the 
                    apartment for several months while work was 
                    being done, her furniture and furnishings 
                    remained in the apartment. She visited the 
                    apartment nearly every day to check on them 
                    and to pick up her mail. 

          DOCKET NO. GE410260RO

               3)   The work done in her apartment was just 
                    necessary repairs, with no partitions being 
                    moved.  Much of the work in the building was 
                    ordinary repairs, and another significant 
                    portion was required for historical 
                    preservation tax credits. $26,200.00 was paid 
                    Synderman Gallery for restoration of the 
                    decorative front iron railing.  Approximately 
                    $30,000 [actually $41,900.00] was paid to The 
                    Grenadier Corporation mostly to clean and 
                    repair the facade, replace the roof, and 
                    repair brownstone steps damaged by the 
                    dropping of a refrigerator. Farm and Garden 
                    Nursery was paid [$11,516.15] for cleaning up 
                    the back yard, planting trees, creating a 
                    decorative garden, and making a patio 
                    accessible only to the first floor tenant, who 
                    contributed to the cost of the work although 
                    the owner did not subtract that payment from 
                    the cost.  The money spent for aesthetic 
                    historical preservation work should not count 
                    in deciding whether the work qualifies as a 
                    substantial rehabilitation, nor should the 
                    five-to-one ratio between the amount allegedly 
                    expended, including historical preservation 
                    work, to the building's 1985/86 value matter, 
                    since the assessed value of the building is 
                    not commensurate with the market value.

               4)   No court has ruled directly on a DHCR case 
                    overturning DHCR criteria for substantial 
                    rehabilitation.  The owner is incorrect in 
                    stating that Pape v. Doar held that a building 
                    did not have to be vacant, and in stating that 
                    the court set forth a clear and concise 
                    standard conflicting with that of the DHCR.  
                    In fact, the Court stated that it was not 
                    addressing the issue of whether the apartments 
                    had to be in a substandard or deteriorated 
                    condition.  It just stated that an increased 
                    number of units was not required, and that 
                    excessive quality was not an automatic bar to 
                    exemption.  It stated that, in view of "the 
                    provisions for rent increases for major 
                    capital improvements... The exemption, as an 
                    exception to the remedial protections of rent 
                    stabilization and having alternative parallel 
                    provisions by which owners may recover their 
                    investment, is to be strictly construed" in 
                    favor of tenants.  The Civil Court in Goodman 
                    v. Ramirez found an exemption, even though one 

          DOCKET NO. GE410260RO

          unit was not rehabilitated, because that unit 
                    had previously been exempt from the Rent 
                    Stabilization Law.  The DHCR, in both Docket 
                    Nos. BA410221RO and ARL06266W, has already 
                    taken into account the decisions in Pape v. 
                    Doar and  Goodman v. Ramirez as well as Nelson 
                    v. Yates.  The language in Fleur v. Croy that 
                    the owner cites to say that a substantial 
                    rehabilitation could deprive the tenant of her 
                    rights as a rent-stabilized tenant after more 
                    than 20 years of occupancy is merely dicta, 
                    and in any case it was only stated that 
                    substantial rehabilitation which reduces the 
                    number of units "may" result in exemption.

          In an order issued on May 19, 1992 the Administrator found that the 
          owner had failed to substantiate that the building had been 
          substantially rehabilitated to the extent required, within the 
          meaning of the Code and based on DHCR policies and interpretations, 
          in order to be exempt from the Rent Stabilization Law and 
          Regulations.  The Administrator found that the subject apartment 
          was subject to the Rent Stabilization Law, and directed the owner 
          to offer the tenant a renewal lease.

          In her petition and supplements, the owner makes the same factual 
          and legal arguments as in the earlier proceedings, and additionally 
          contends in substance that the recent decision in Eastern Pork 
          Products v. N.Y.S. DHCR, 590 N.Y.S. 2d 77 (A.D. 1st Dept. 1992) 
          makes it explicitly clear that exemption pursuant to ETPA Section 
          5(a)5 does not require 'gutting' of a building, nor that all 
          apartments be vacant; that Eastern Pork was a natural progression 
          from Pape v. Doar, which held that the term "substantial 
          rehabilitation" was to be given its natural intendment, and that 
          neither excessive quality nor a failure to increase the number of 
          dwelling units should be a bar to exemption; that the work 
          undertaken by Farm and Garden Nursery included the removal of 
          debris, the replacement of a rear fence and the planting of 
          shrubbery, all of which work is enjoyed by the tenant from her rear 
          balcony overlooking the garden; that the $6,177.00 federal tax 
          credit previously reported has, after adjustments, been reduced to 
          $1,977.00; and that this de minimus tax credit based on a 
          $400,000.00 renovation does not change the fact that the building 
          was, as part of a long and comprehensive project that took several 
          years to complete, substantially rehabilitated within the meaning 
          of ETPA Section 5(a)5.

          DOCKET NO. GE410260RO

          In affidavits, the owner's architect Martin Jay Rosenblum makes 
          some of the same statements as previously, and additionally states 
          that he closely monitored the rehabilitation of the building, 
          including monitoring construction and approving all applications 
          for payment; that he associated himself with a New York State- 
          licensed architect, who reviewed the plans and filed the necessary 
          documentation; that the owner did not neglect the building, but 
          rather made what repairs could be done, and then embarked upon a 
          comprehensive plan of rehabilitation when it became clear that 
          repairs would not correct the existing conditions; that four of the 
          seven previously existing units were uninhabitable, and the other 
          three had varying levels of problems; that the two studio 
          apartments formerly existing on the ground floor, neither of them 
          with a kitchen, shared one bathroom; that their electrical system 
          consisted of numerous extension cords; that the third floor rear 
          studio had a toilet in the closet of the entry hall; that the water 
          lead for the bathroom sink was a garden hose from the bathtub 
          faucet; that new gas piping for stove gas was installed throughout 
          the building; that the tenant's apartment was the only portion not 
          substantially rewired; that this occurred because the tenant would 
          not allow the necessary removal of flooring in her apartment, and 
          because the ceiling of the apartment below hers could not be 
          removed since it contains some of the most significant ornamental 
          plaster cornices in the building; that the wiring in the tenant's 
          apartment is sound and within its useful life; that with the 
          exception of the new windows and glass doors in the rear extension, 

          the windows were rehabilitated and fitted with new storm windows; 
          that the first two flights of stairs were structurally unsound and 
          were replaced; that the rest of the stairs were structurally sound 
          and were painstakingly renovated at an expense far greater than 
          would have been required to simply replace them; that the ground 
          floor ceilings were replaced with new sheetrock; that the ceilings 
          on the other four habitable floors were repaired with plaster 
          instead of replaced because of the existence of historically 
          significant ornamental cornices in the plaster ceilings; that the 
          original parquet floors on the first floor were restored to their 
          original luster; that new carpeting and a new bathroom tile floor 
          were installed on the second floor; that new sub-flooring, plus 
          plank flooring, tiles, or carpeting, was used on the third and 
          fourth floors; that on the garden floor the plaster apartment walls 
          were either repaired or else replaced by sheetrock; that the first 
          floor apartment walls were repaired; that, other than an exposed 
          brick wall, the walls of the complainant's apartment were repaired 
          and repainted; that the existing plaster apartment walls on the 
          third and fourth floor were largely replaced with sheetrock; that 
          the historically significant public hall walls were retained, 
          except for third floor areas of the public hallway where the 
          plaster walls were replaced by sheetrock; that there is no doubt, 
          based upon his inspection and that of a structural engineer, that 
          it was necessary to demolish and rebuild the rear extension, 
          originally constructed only as an open porch, which was in a state 

          DOCKET NO. GE410260RO

          of structural failure; that it was the inability to close and 
          secure some of its doors and windows that led to plumbing freeze- 
          ups; that the tenant's architect by his own admission is unable to 
          comment on the deterioration and habitability of three of the five 
          habitable floors, or to know what changes were necessary to replace 
          the deteriorated conditions in those areas; and that the top floor 
          had serious problems caused by a failed roofing and drainage 

          In her answer and supplements, the tenant makes the same assertions 
          as previously, and additionally asserts in substance that the 
          Appellate Division in Eastern Pork did not hold that the criteria 
          applied by the DHCR (gut demolition of an entire, vacant building) 
          should be disregarded in their entirety, but that the DHCR, in the 
          absence of an owner's meeting those criteria, had to also inquire 
          into the nature, extent and scope of the work performed; that the 
          Court in Eastern Pork urged the DHCR to construe the term 
          "substantial rehabilitation" in a manner consistent with public 
          policy; that Pape v. Doar found that such policy required that the 
          exemption, as an exception to the remedial provisions of rent 
          stabilization, should be strictly construed since there are 
          alternative parallel provisions in rent stabilization by which 
          owners can recoup their investments such as the provisions for 
          major capital improvements; that in Eastern Pork the Court 

          continued with the statement that the basic purpose of the 
          exemption is to increase the number of habitable family units by 
          encouraging owners to substantially rehabilitate substandard or 
          deteriorated housing stock; that the apartments were not in a 
          substandard or deteriorated condition when the owner began planning 
          the rehabilitation, but were allowed to deteriorate after becoming 
          vacant, with the vacancies resulting not from unihabitability but 
          from evictions, deaths or the payment of money to tenants to 
          vacate; that the DHCR has, using Pape and Eastern Pork as its 
          guide, drafted a proposed advisory opinion on substantial 
          rehabilitation, setting forth criteria none of which the owner has 
          met; that the owner reused existing walls, ceilings, doors, 
          partitions and public stairwells, which indicates that the basic 
          structure of the building was sound; that neither the plumbing nor 
          the electrical wiring nor the windows were replaced on a building- 
          wide basis; that virtually nothing, other than repairs, was done in 
          the subject apartment; that three apartments were occupied when the 
          "substantial rehabilitation" work began in 1985; that the tenant 
          remained in occupancy essentially the entire time, relocating for 
          a few months only at the owner's specific request and pursuant to 
          a court stipulation so the owner could make repairs in the subject 
          apartment; that the work therefore fails to qualify as a 
          substantial rehabilitation sufficient to exempt the entire building 
          from the Rent Stabilization Law; that the owner can recoup her 
          investment by charging "first rents" for the two duplex apartments 
          occupying four of the five habitable floors; that those units may 
          in fact be deregulated under the Rent Regulation Reform Act of 

          DOCKET NO. GE410260RO

          1993, since they rent for $4,000.00 and $5,000.00 and since their 
          tenants have high incomes; that the complainant's apartment should 
          in any case remain regulated for the duration of her occupancy, 
          since the Court in Eastern Pork specially left open the question of 
          whether an apartment whose tenant continued in occupancy through a 
          substantial rehabilitation would lose its stabilized status, and 
          since the proposed DHCR advisory opinion provides that it would not 
          lose it during such tenant's occupancy; and that the equities 
          mandate, based both on the limited work performed in the subject 
          apartment as well as the history of the complainant's tenancy of 
          more than twenty years, that the DHCR should affirm the directive 
          that the owner offer the tenant a rent stabilized  renewal lease.

          In response, the owner contends among other things that: 

               1) The Administrator's order must be revoked, since 
               Eastern Pork makes clear that the DHCR's pre-existing 
               policy, requiring the gutting of a vacant building, was 
               illegal, unreasonable and contrary to statute, and since 
               such policy was the sole basis for the Administrator's 

               2)  Eastern Pork compels the DHCR to construe the term 
               "substantial rehabilitation" in light of its commonly 
               understood meaning, rather than using a narrowly 
               constructed "all or nothing" criterion.  Eastern Pork 
               does not suggest that the DHCR must construe the term in 
               a manner consistent with the remedial purpose of the Rent 
               Stabilization Law, but rather states that the term must 
               be construed in harmony with the legislative purpose of 
               ETPA Section 5(a)(5), which is to increase the number of  
               habitable family housing accommodations.  This is 
               requiring the DHCR to further the exemption from the Rent 
               Stabilization Law.  

          In a further submission the tenant asserts in substance that the 
          recent decision in 81 Russell Street Associates v. Scott, N.Y.L.J. 
          August 25, 1993, p.24, c.2 (Civ.Ct., Kings County) [which found 
          that a certain building was not exempt from the Rent Stabilization 
          Law by virtue of substantial rehabilitation since the owner in that 
          case had failed to demonstrate that the work was necessary, that 
          the renovation significantly contributed to the available housing 
          stock in the city, and that the cost of the renovation could not be 
          recouped within the framework of the Rent Stabilization Law] 
          included a comprehensive review of all judicial decisions, 
          including Eastern Pork, addressing the substantial rehabilitation 
          issue; that an application of the principles set forth in 81 
          Russell Street reveals that no "substantial rehabilitation" was 
          performed in the present case; that Eastern Pork does not mandate 
          a reversal of the Administrator's order; that the Appellate 

          DOCKET NO. GE410260RO

          Division's general definition of the term "substantial 
          rehabilitation" is broad enough to be subject to various 
          interpretations; that a result reached by considering the totality 
          of the circumstances must be logical, equitable and consistent with 
          the goals of the Rent Stabilization Law as a whole; that the court 
          in Eastern Pork, in noting that the purpose of the exemption was to 
          increase the number of habitable family units, was just making that 
          point in connection with its holding that it was unreasonable for 
          the DHCR to require, as an absolute condition for the exemption, 
          that a building be completely vacant when the work is commenced; 
          that the Appellate Division clearly did not intend to contradict 
          its holding in Pape v. Doar that the exemption was to be strictly 
          construed so as to foster the remedial purposes of the Rent 
          Stabilization Law; that the Court, had it intended to change its 
          position, would have done so clearly; that the owner can recoup her 
          investment by rent increases for both individual apartment as well 
          as building-wide improvements, and most particularly by the fact 
          that the owner could charge initial free market rents for the two 
          duplex apartments created from six individual housing units; that 
          the owner is in fact charging very high rents for the duplex 

          apartments; that the owner is misplacing reliance on Goodman v. 
          Ramirez in claiming that unrenovated, occupied units are exempt 
          from rent stabilization if a substantial rehabilitation has been 
          performed on the remainder of the building; that Eastern Pork 
          expressly left open the issue and, contrary to the owner's claim, 
          cited Goodman for limited purposes only; that even the Goodman 
          court did not reach the issue since the only occupied unit was a 
          Class B unit previously exempt from rent regulation; and that a 
          finding that the tenant would remain stabilized for the duration of 
          her tenancy, even if the building were found to have been 
          substantially rehabilitated, would be consistent with the reasoning 
          in a long line of cases where courts have held that it would run 
          counter to the provisions of the Rent Stabilization Law to evict 
          the remaining rent stabilized tenants where the renovation of a 
          building has reduced the number of units to fewer than six because 
          an owner had unilaterally decided to alter the building for its own 
          financial reward.

          With her submission, the tenant's attorney has enclosed an 
          affidavit from her architect, Carl Stein.  In addition to repeating 
          assertions made in previous affidavits, he further asserts in 
          substance that the declaration by the owner's architect that the 
          housing units would have, absent building rehabilitation, continued 
          to structurally deteriorate until the building collapsed, proves 
          nothing, since any building denied basic repairs and maintenance 
          will eventually collapse, whether it takes decades or centuries; 
          that every building as part of normal upkeep periodically needs 
          reroofing, repointing, repair and replacement of pipes and plumbing 
          fixtures, patching of walls, floors and ceilings, etc; that the 
          small two-story addition at the rear of the building represents 

          DOCKET NO. GE410260RO

          less than 6 percent of the floor area of the building; that it is 
          the only area in which there arguably was any structural 
          deterioration; that the poor condition of the extension, which was 
          originally constructed as an open porch and later "enclosed in a 
          makeshift fashion" with no foundation or fire walls, and which was 
          not part of the building's basic structure, is no evidence of the 
          condition of the remainder of the building; that the building 
          drawings do not, except for the rear extension, call for any 
          structural work to replace joists, bearing walls or structural 
          members; that the ability to repair rather than replace ceilings is 
          further evidence that neither joists nor structural members were 
          "in a state of structural deterioration"; that at least five of the 
          seven apartments were habitable, as they remained occupied (except 
          for a tenant who died in 1984) until the owner bought them out 
          (except the complainant) after she contracted for roof replacement; 
          that the owner's architect, while contending that "the interior 
          stairs were structurally deficient," also, describing in detail the 
          "painstaking and expensive measures" taken to repair rather than 
          replace the stairs between the second, third and top floors of the 
          building, describes the stairs as "structurally sound"; that in 
          fact the architect's drawings show that, other than utility stairs 
          to the cellar, all public stairs were to remain as existing; that 
          roofs have an average useful life of 10 to 20 years, so roof 
          replacement is not evidence that a building is "in a state of 
          structural deterioration"; that exterior work, such as masonry 
          cleaning, repointing of brickwork, painting and some local repair 
          of woodwork, resurfacing of brownstone, and ironwork is not 
          evidence of a "substantial rehabilitation," but was rather done 
          either for aesthetic reasons or as part of routine long-term  
          maintenance; that the architect's drawings indicate that much of 
          the plumbing was re-used, although new branch lines were used where 
          bathroom or kitchen fixtures were relocated; that the individual 
          heating units, which replaced a steam heat/radiator system of more- 
          than-sufficient capacity, enabled the owner to transfer heating 
          costs to the individual tenants; that the installation of new 
          electric sub-panels and meters would have been necessitated by the 
          decision to install electric heat in each of the units, and not 
          because the entire system was in violation of the code; that the 
          relocation and replacement of outlets and switches was similarly 
          necessitated by the owner's duplexing of apartments; that Mr. 
          Rosenblum's statement that the original wiring in the complainant's 
          apartment is "sound and within its useful life" conflicts with his 
          claim that the "entire electrical system was outmoded, and did not 
          comply with code"; that the condition of the windows was 
          sufficiently good that they could be repaired and reused, further 
          indicating the generally good condition of the building; that 
          plaster ceilings, particularly delicate moldings, are the first 
          area affected by structural problems and floor joist deflection; 
          that the relatively good condition of the ceilings in this case 
          rebuts any claim of a failing building; that any ceiling 
          replacement resulted from water infiltration from the roof or from 
          the duplexing work, as opposed to structural damage; that, with the 

          DOCKET NO. GE410260RO

          exception of the rear extension, floor work consisted of routine 
          repairs and maintenance, with neither joist replacement nor floor 
          leveling being necessary; that most of the wall work was either 
          optional work to reconfigure the units into duplex apartments, or 
          repairs necessitated by water damage; that of the 36 rooms shown on 
          the Finish Schedule only 2 have all new walls and only 6 have some 
          new walls; that the new kitchens and bathrooms were required by the 
          owner's desire to create two duplex units from six individual 
          units; that, with the exception of the rear extension, all the work 
          is consistent either with the creation of duplex apartments or of 
          routine maintenance; and that minimal work was done in the 
          complainant's apartment other than the heating system change 
          necessitated by the owner's decision to remove the central heating 
          system and install separately billable equipment in each unit.

          In a recent affidavit, the tenant repeats prior assertions, and 
          additionally asserts in substance that five of the seven apartments 
          were occupied, and thus habitable, when the owner bought the 
          building, and thus could not have been considered substandard or in 
          a seriously deteriorated condition; that the heating system was 
          adequate, although the heat failed on several occasions when the 
          pipes near the open first floor french doors froze and broke; that 
          the owner's architect never asked the tenant's permission to remove 
          her floor to install new wiring; and that the owner, by charging 
          approximately $95,000 more in annual rents than before the 
          renovations, was able to recoup her $400,000 in renovations in a 
          little over four years.

          In a further submission, the owner contends in substance that the 
          Court in Eastern Pork did not give the DHCR wide discretion as to 
          how the term "substantial rehabilitation" was to be interpreted, 
          but rather held that the clarity of the term barred any 
          "administrative construction"; that the analysis in 81 Russell 
          Street is deficient in several ways; that ETPA Section 5(a)(5) 
          entirely exempts a substantially rehabilitated building from the 
          Rent Stabilization Law, notwithstanding the fact than an owner of 
          such a building might also be able to recoup its investment though 
          M.C.I. increases or initial free market rents; that ETPA Section 
          5(a)(5) clearly states that "[h]ousing accommodations in buildings 
          completed or buildings substantially rehabilitated as family units 
          on or after January first, nineteen hundred seventy-four" are 
          exempt from regulation; that Goodman stated precisely this; that 
          Eastern Pork made clear that a building could be substantially 
          rehabilitated even if some apartments remained untouched; that 
          Eastern Pork did not address the status of unrenovated apartments 
          since the sole unrenovated apartment in that case had been vacated 
          years before by the rent controlled tenant; that the Court in 
          Eastern Pork held that the DHCR could not limit the statute in ways 
          that the Legislature could have easily expressed, but failed to do 
          so; that the Legislature could have, but did not, include an 

          DOCKET NO. GE410260RO

          exception for unrenovated apartments in a substantially 
          rehabilitated building; and that the court in Goodman avoided the 
          issue of whether a Class B apartment was subject to rent 
          stabilization, because it found that such apartment was located in 
          a building which had been substantially rehabilitated.

          In recent affidavit, the owner contends among other things that the 
          mere fact that five of the seven apartments were occupied when she 
          bought the building does not mean that they were "habitable" and 
          not substandard or in a seriously deteriorated condition, and that 
          the other two units had been uninhabited for years.

          In a recent affidavit the owner's architect repeats contentions 
          made previously, and additionally contends in substance that 
          approximately 30% of the garden rear studio was located in the rear 
          extension, as was approximately 10% of the first floor apartment, 
          and that the tenant considered the roof of the extension, which 
          comprised her deck, to be part of her habitable space, so that at 
          least three apartments would have been partially destroyed if the 
          rear extension had collapsed; that the rear extension's lack of 
          structural integrity jepardized the entire building; that it is not 
          uncommon, during the course of a rehabilitation project, to find 
          that elements previously believed to be sound actually are 
          deficient and must be replaced; that in fact the stairs between the 
          first floor and second floor were replaced; that the leakage 
          problem throughout the building was a function of the poor design 
          and poor drainage of the inward sloping front roof; that the main 
          focus of the structural deterioration was the rear extension; that 
          most of the water damage occurred on the upper floors, while most 
          of the historical, aesthetic and architecturally significant 
          elements were located on the lower floors; that the tenant's 
          architect does not bother to sift through the $400,000.00 costs to 
          establish how it "primarily reflects" the cost of complying with 
          the Landmarks Preservation Commission; that the rehabilitation of 
          the building was occasioned by many factors, primarily the 
          generally deteriorated condition of the building as well as the 
          outmoded layouts of several of the units; that restoration of the 
          brownstone trim and the decorative iron work was in part a safety 
          issue; that more of the plumbing had to be replaced than was 
          envisioned on the plansheets; that the heating system was outmoded; 
          that gas repiping was done because the existing piping was old and 
          much of it was no longer used; that the electric wiring in the 
          tenant's apartment, while legal for an existing apartment, would 
          not comply with the code for a new installation; that the electric 
          system in the rest of the building, being outmoded and generally 
          insufficient for the electrical needs of modern day living, was 
          replaced where possible; that the relatively intact condition of 
          the front windows, which had received more maintenance than areas 
          of the building which were not visible, is not a fair indicator of 
          the general condition of the building; that, although not 

          DOCKET NO. GE410260RO

          originally called for on the plansheets, a substantial amount of 
          flooring was completely replaced; that more work was also done on 
          the walls than originally called for; and that the tenant's 
          complete lack of cooperation was the reason for the limited work in 
          her apartment.

          In response, the tenant's attorney asserts among other things, that 
          the owner's architect did not, in his numerous submissions prior to 
          his September 9, 1993 affidavit, state that the work actually 
          performed deviated in any way, never mind significantly, from the 
          full-sized building plans which the DHCR 

          indicated that it would rely upon.  In an affidavit, the tenant's 
          architect asserts in substance that, while the actual construction 
          work required for a renovation will differ from that defined by the 
          architectural documents, there is a great divergence between the 
          documents submitted to the Buildings Department and the actual work 
          claimed by the owner's architect to have been performed; that as a 
          practicing architect he would not expect to see a set of final 
          architectural documents to show no work at all for a particular 
          major aspect of the building, such as the structure, and then to 
          later hear that that particular aspect was in a state of immiment 
          building-wide failure requiring major work to prevent the loss of 
          the building; that, as an example, the drawings show no work to be 
          done on stairs above the basement; that no amendment was filed with 
          the Department of Buildings as would have been required if stairs 
          were structurally deficient and had to be replaced; that it is 
          clear from an examination of the stairs today that the treads were 
          replaced on the stairs from the first floor to the second floor, 
          which is not surprising since that is the most heavily traveled 
          flight of stairs; that it is also obvious that the structure of 
          those stairs - the outside and wall stringers and internal 
          structure - was not disturbed; that it is also clear that the 
          stairs above the second floor were not rebuilt in any way; that the 
          main structure at the subject premises is a substantial masonry 
          building with a foundation that extends more than a story and a 
          half below grade; that it is approximately seventeen times the size 
          of the added-on wooden extension, which was a structure without 
          proper foundation and which was never intended to be used as 
          interior space; that deterioration of the extension is no indicator 
          of the condition of the main structure itself; and that if systemic 
          structural problems existed in the main building, the owner's 
          architect should have seen evidence of them and noted them on the 
          architectural documents.

          The Commissioner is of the opinion that the owner's petition should 
          be denied, and that the Administrator's order should be modified.

          It is uncontested that the tenant herein has been in continuous 
          occupancy of the rent stabilized subject apartment long prior to 
          the commencement of the renovation work in 1985 and remained in 
          occupancy during the renovation period except for a brief time 

          DOCKET NO. GE410260RO

          pursuant to court stipulation when repairs were made in the subject 
          apartment.  It is also undisputed that no major renovation work 
          took place in the subject apartment.  Therefore the question is 
          presented as to whether, even if it is considered that the rest of 
          the subject premises underwent a substantial rehabilitation, an 
          occupied rent stabilized apartment would lose its rent-stabilized 
          status under the statutory exemption.  It is noted that the Court 
          in Eastern Pork specifically chose not to address this issue.  

          Further the court in Goodman v. Ramirez dealt with an occupied 
          Class B apartment which was not subject to rent stabilization prior 
          to the renovation work so that the Goodman court also did not deal 
          with this particular issue.  Also, Goodman was not an appellate 
          case.  In Pape the Appellate Division cited Goodman only on the 
          issue of rehabilitation as "family units."  In Eastern Pork the 
          Appellate Division cited Goodman only on the issue of the vacancy 
          requirement, and stated that it was not deciding the issue of the 
          continued stabilized status of occupied apartments.  Based on the 
          equities involved - the fact that the complainant is a long term 
          rent stabilized tenant in an apartment with very little renovation 
          work done therein - the Commissioner is of the opinion that, even 
          if the rest of the building were found to have been substantially 
          rehabilitated, the subject apartment would continue to retain its 
          rent stabilized status at least while the tenant herein maintains 
          her occupancy in such apartment.  In this connection, the 
          Commissioner also finds persuasive the analogy to the line of cases 
          cited by the tenant which hold that, based on the underlying 
          purpose of the rent laws, apartments continue to be considered rent 
          stabilized although the buildings where they exist have been 
          restructured to contain fewer than six housing units, even though 
          a building with fewer than six units is normally exempt from the 
          Rent Stabilization Law - Shubert v. DHCR, 162 A.D.2d 261, 556 
          N.Y.S. 2d 618 (1st Dept. 1990), et. al.  In Shubert, the owner had 
          combined apartments thereby reducing the number of residential 
          units from seven to five subsequent to the base date for rent 
          stabilization purposes.  The Shubert court found that such 
          unilateral action on the owner's part could not effect an exemption 
          from the Rent Stabilization Law even as to future tenancies 
          commencing after the reduction in residential units.

          Because this order is finding that the Administrator was correct in 
          determining that the complainant was entitled to a stabilized 
          renewal lease, the Commissioner does not consider it necessary to 
          reach the issue of whether or not the building was substantially 
          rehabilitated so as to exempt it from rent stabilization coverage.  

          THEREFORE, in accordance with the Rent Stabilization Law and Code, 

          DOCKET NO. GE410260RO

          it is

          ORDERED, that this petition be, and the same hereby is, denied and 
          that the Rent Administrator's order be, and the same hereby is, 
          modified to state only that the tenant is entitled to a rent 
          stabilized renewal lease.  No finding is made as to whether the 
          subject building was substantially rehabilitated and thus exempt 
          from Rent Stabilization.
                                                    JOSEPH  A. D'AGOSTA
                                                    Deputy Commissioner


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