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

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEALS OF                               GG410159RT,   GG410194RT
                    VARIOUS TENANTS OF
                    330 E. 77TH STREET             RENT ADMINISTRATOR'S
                    NEW YORK, NY                   DOCKET NO.:  EB410121OM



          On various dates the above-named petitioner-tenants timely filed 
          Petitions for Administrative  Review against an order issued on 
          June 24, 1992 by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 
          330 East 77th Street, New York, New York, various apartments.

          Four tenants filed individual petitions for administrative review 
          which have been consolidated herein for a uniform disposition.

          The applicable sections of law are Sections 2522.4 and 2522.5 (d) 
          (2) of the Rent Stabilization Code.

          The owner commenced this proceeding on February 20, 1990 by filing 
          an application for a rent increase based on the installation of 
          major capital improvements (MCIs), to wit:  a boiler/burner, 
          elevator upgrade, pointing and waterproofing, and a new roof.

          One tenant objected to the owner's MCI application, claiming that 
          the roof leaked.

          On June 24, 1992, the Rent Administrator granted the MCI 
          application in part, determining the boiler/burner and elevator 
          upgrade qualified for an MCI rent increase but disallowing a rent 
          increase for waterproofing, pointing and a new roof because the MCI 
          application was filed more than two years from date this work was 
          completed and thus is disqualified pursuant to Section 2522.4 (a) 
          (8) of the Rent Stabilization Code.

          ADMIN. REVIEW DOCKET NO. GG-410150-RT

          In their petitions, the tenants allege that they never received 
          notice of the installlations of the MCI application, and that the 
          installations were necessitated  due to poor maintenance.  The 
          tenant of apartment 4A alleges that he never received notice of the 
          MCI application in his lease when he moved into his apartment in 
          September 1989.  The tenant of apartment 5D alleges that the old 
          boiler/burner was replaced with a defective used boiler/burner 
          which needed to be replaced in less than a year.

          In response to the tenants' petitions, the owner contends, in 
          substance, that due to the emergency nature of the installations of 
          both the boiler/burner and the elevator controller, prior 
          notification to the tenants was not possible.  The owner also 
          states that the DHCR notified the tenants of her application; that 
          the elevator and boiler/burner were properly maintained; that the 
          new furnace cracked beyond repair within 14 or 15 months and had to 
          be replaced at the owner's cost; and that she did not file new MCI 
          papers for this subsequent replacement of the furnace.

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

          As to the tenants' allegation that they did not receive notice of 
          the MCI application, the record discloses that all of the tenants 
          were served by the Division on May 9, 1990 with copies of the 
          owner's application, but that only one tenant submitted a response.

          As to the claim by the tenant of apartment 4A that his lease did 
          not contain a notice of the pending MCI application, the 
          Commissioner notes that this tenant commenced occupancy in 
          September 1989.  The MCI application was filed by the owner in 
          February 1990.  Section 2522.5(d)(2) and (4) of the Rent 
          Stabilization Code requires only notice in a vacancy lease of a 
          pending MCI application.  The owner was under no obligation to 
          include any specific mention of the installation prior to the 
          filing of her MCI application.

          As to the tenants' allegation that poor maintenance of the elevator 
          and boiler/burner contributed to their condition of disrepair, the 
          Commissioner notes that the installation of the elevator 
          controllers and a boiler/burner meet the criteria for a major 
          capital improvement under Section 2522.4(a) of the Rent 
          Stabilization Code as set forth below.  This order and opinion is 
          issued without prejudice to the tenants' right to file an 
          application for a rent reduction based on a diminution of service, 
          if the facts so warrant. 


          ADMIN. REVIEW DOCKET NO. GG-410150-RT

          As to the tenant's allegation and the owner's subsequent admission 
          that the boiler/burner, which is the subject of the current MCI 
          increase, was replaced with another unit, the Commissioner finds 
          that the increase for the boiler/burner must be disallowed.

          Pursuant to Section 2522.4 (a) (2), major capital improvement rent 
          increases are warranted when improvement is 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.

          In addition, the Rent Stabilization Code sets forth additional 
          requirements which the owner must meet in order to qualify for a 
          rent increase.  These requirements include the submission of 
          contractor's  certification of cost of work, proof of payment, 
          necessary government approvals, and an owner's affidavit that the  
          installation had been properly performed in a workmanlike manner, 
          and that all information submitted with the application is 

          In the instant case the boiler/burner that was installed in April 
          of 1989 was replaced, by the owner's own admission, 14 or 15 months 
          later, while the MCI application was still pending.  The record 
          shows that the owner did not notify the Rent Administrator that the 
          boiler/burner was replaced.  No documentation to substantiate this 
          replacement of the newly installed boiler/burner was included in 
          the record.  Furthermore, as to the workmanship of the first 
          installation, as the record now stands, the first installation must 
          be considered defective.  Lastly, since the second installation 
          occurred during the application process, the owner had an 
          affirmative duty to notify the Rent Administrator.  In essence, the 
          application and information submitted by the owner contained 
          material omissions which undetermined the veracity of the owner's 

          The Commissioner finds that the rent increase for the boiler/burner 
          should be excluded retroactively from the effective date of the 
          Administrator's order and that the permanent rent increase should 
          be reduced to $5.18 per room per month as follows:

          1.   Approved MCI cost for elevator controller         $11,000.00

          2.   Amortization by 60 months (line 1 divided by 
               line 60)                                          $    171.22

          3.   Total number of rent stabilized rooms                   33

          4.   Rent increase per room per month                  $      5.18
               (line 2 divided by line 3)


          ADMIN. REVIEW DOCKET NO. GG-410150-RT

          The resulting reduction in rent continues in effect notwithstanding 
          that an Article 78 proceeding for judicial review or any other 
          legal action may have been taken in connection with this order of 
          the Commissioner unless and until an order is issued to the 

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

          ORDERED, that these petitions be, and the same hereby are, granted 
          in part, and that the Rent Administrator's order be, and the same 
          hereby is, modified in accordance with this order and opinion, and 
          it is further

          ORDERED, that the owner refund any excess rent collected as a 
          result of this order and opinion by granting to the tenants a 
          credit of twenty percent per month of such excess rent commencing 
          on the first rent payment date after the issuance of this order and 
          opinion until all overpayments have been made. 


                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner


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