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   SJR No. 7133
          IN THE MATTER OF THE ADMINISTRATIVE      ADMINISTRATIVE REVIEW
          APPEAL OF                                DOCKET NO.:  GB630282RO
                    NEW STAR REALTY                       
                                                   RENT ADMINISTRATOR'S
                                                   DOCKET NO.: FG630008RK
                                                               (CG630069OM)

                                   PETITIONER      
          -------------------------------------X
                                                
          ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE 
          REVIEW

          On February 12, 1992, the above named petitioner-owner timely filed 
          a petition for administrative review (PAR) against an order (Docket 
          No. FG630008RK) issued on January 27, 1992, by a Rent Administrator 
          (Gertz Plaza) concerning the housing accommodations known as 1371 
          Virginia Avenue, Bronx, New York, various apartments, wherein the 
          Rent Administrator affirmed an order under Docket No. CG630069OM 
          that granted, in part, the owner's MCI application by authorizing 
          an increase for rent controlled apartments and determined that the 
          owner was not entitled to a rent increase for rent stabilized 
          apartments upon finding that the owner resubmitted an amended 
          application more than two years from the completion date of the MCI 
          installations.

          Subsequent thereto the owner filed a petition in the Supreme Court 
          pursuant to Article 78 of the Civil Practice Law and Rules seeking 
          an order of mandamus.  This resulted in a court ordered stipulation 
          remitting the proceeding for a determination of the owner's 
          administrative appeal herein.

          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 this administrative appeal.

          The owner commenced this proceeding on June 27, 1988 by initially 
          filing an application for a rent increase based on the installation 
          of the following items at a total cost of $36,875.00: windows 
          building wide, a boiler/burner and a new roof. 

          On January 3, 1989 the owner submitted to the Division a list of 
          the MCI installations included in his application and supporting 
          documentation. The letter listed documentation submitted for 
          "heating"  including proof of payment of $25,200.00 and $3,145.00 
          for an entrance door.

          On March 7, 1991 the Rent Administrator noted in a Request for 
          Additional Information that the owner's application reflected a 
          claimed cost for the boiler/burner of $3,145.00; that the 
          supplement forms indicated a claimed cost of $25,200.00; and that 
          the application did not include the item entrance doors while the 
          supplement includes this item at a claimed cost of $3,145.00.












          ADMIN. REVIEW DOCKET NO. GB630282RO

          On March 12, 1991 the owner advised the Rent Administrator of 
          omissions from his application, and noted that all backup 
          documentation had been submitted. The owner submitted "an amended 
          RA-79 form ... with the revised figures."  The amended application 
          raised the claimed cost for the MCI installations to $62,075.00.

          On March 20, 1991 the Rent Administrator re-served the tenants the 
          owner's completed application with the revised figures and with the 
          addition of the entrance door.

          Various tenants objected to the owner's application, alleging, in 
          substance, that the heat and hot water are inadequate at times; 
          that there are leaks in the roof; that the door is difficult to 
          open; that a second vestibule door is necessary; that the intercom 
          system is not connected to the door; that the rent increase should 
          not be permanent; and that the electrical and plumbing systems are 
          antiquated.

          On April 26, 1991, the Rent Administrator issued an order granting, 
          in part, the owner's MCI application authorizing an increase for 
          rent controlled apartments, effective June 1, 1991 based upon a 
          total approved cost of $62,075.00 upon finding that the windows, 
          boiler/burner, roof and entrance door installations qualified as 
          MCIs.  The installations were disallowed by the Rent Administrator 
          as to the stabilized apartments upon finding that the owner failed 
          to resubmit the amended application within two years from the 
          completion date of the installation of said items, in violation of 
          Section 2522.4(a)(8) of the Rent Stabilization Code.

          The owner requested in a letter dated April 30, 1991 a 
          reconsideration of the order and the Rent Administrator reopened 
          the proceeding on July 5, 1991 under Docket No. FG630008RK.

          Various tenants responded to the reopening of the proceeding 
          stating, in substance, that the increase would be a financial 
          hardship, that the electrical and plumbing systems are antiquated, 
          and that the door and heat and hot water are inadequate at times.

          On January 27, 1992 the Rent Administrator issued the order 
          appealed herein, noting that a review of the record disclosed that  
          the owner, in a letter dated March 12, 1991, re-submitted an 
          amended application (RA-79) with revised figures and an 
          installation that was omitted from the previous filing; that the 
          owner's application was given a new filing date of March 18, 1991; 
          and that the tenants were re-served.  The Rent Administrator 
          affirmed the order issued April 26, 1991 under docket number 
          CG630069OM  and issued a superseding  order (Docket No. 
          FG630008RK).



                                          2



          ADMIN. REVIEW DOCKET NO. GB630282RO

          On February 12, 1992 the owner filed a petition contending, in 
          substance, that the owner timely filed his application on June 29, 
          1988 and did not file a new application on March 18, 1991; that the 
          owner only corrected a typographical error on the RA-79 form; that 
          the Rent Administrator continued processing the original 
          application by processing the J-51 information; that the new 
          application was not assigned a new docket number; that the 
          supplements to the original application included the correct data; 
          that the owner sent a letter on January 3, 1989 correctly listing 
          the application data; that the owner was not given notice of the 
          Rent Administrator's decision that it considered the owner's answer 
          to the Request for Information a new application; and if the 
          submitted RA-79 is a new application then only the doors should be 
          considered a new item since the other three installations were 
          included on the application (RA-79).

          One tenant responded, stating in substance, that the heat and hot 
          water are inadequate at times; that the boiler needs repairs on an 
          ongoing basis; that a second vestibule door is necessary; and that 
          the electrical and plumbing systems are antiquated.

          After careful consideration of the entire record, the Commissioner 
          is of the opinion that this petition should be granted in part.

          The evidence of the instant case indicates that the owner timely 
          filed an incomplete application for a MCI rent increase on June 29, 
          1988 and submitted to the Division supporting documentation on 
          January 8, 1989. The Commissioner finds that under the 
          circumstances of this case that the corrections made pursuant to a 
          letter dated March 12, 1991, which the owner alleges was in answer 
          to a Request for Additional Information sent from the Rent 
          Administrator on March 8, 1991, was not a new application but 
          rather  clarifying or supplemental information reconciling the 
          information on the  application (RA-79) with the supporting 
          documentation.  The record further shows that upon receipt of the 
          "amended application (RA-79)", the Rent Administrator served the 
          tenants on March 20, 1991 with the complete application which 
          included an additional $25,200.00 in MCI costs and the addition of 
          an entrance door.  (The Commissioner notes that the owner had ample 
          opportunity prior to the Rent Administrator's request to submit a 
          corrected RA-79 form).

          The completion dates of the installations (windows, May 1988; 
          boiler/burner, March 1988; roof, December 1987; and door, March 
          1988) as indicated on the contractors' certifications, which were 
          submitted with the original application, are undisputed and are 
          supported by the cancelled checks.  Therefore, the Commissioner 
          finds that the owner did file the application albeit incomplete 
          within two years after the completion of the installations. 


                                          3
          ADMIN. REVIEW DOCKET NO. GB630282RO

          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 
          installations involved herein all qualify as MCIs.

          Furthermore, the record discloses that the owner substantiated its 
          application in the proceeding below by submitting to the 
          Administrator documentation in support of the application, 
          including the contractors' certifications, copies of proposals, 
          invoices, cancelled checks, and the necessary governmental 
          approvals for the work in question.

          The Commissioner is of the opinion and finds in this instant case 
          that the owner is entitled to a rent increase of $11.25 per room, 
          per month with respect to stabilized apartments effective as of May 
          1, 1991, the first rent payment date 30 days after completion of 
          the filing by service of the completed application on the tenants.  


          The rent increase of $11.25 per room, per month for rent stabilized 
          tenants is arrived at as follows:

          1.   Approved MCI cost                       $ 62,075.00
               (windows, boiler/burner, 
               roof and entrance door)

          2.   Amortization by 60 months               $  1,034.58
               (Line 3  60)

          3.   Total number of Rent Stabilized and           92
               rent controlled rooms         

          4.   Rent increase per room per month        $     11.25
               (line 2  line 3)

          Furthermore, based upon the foregoing, with respect to the rent 
          stabilized apartments, the Commissioner has determined that the 
          lawful retroactive rent increase to be the following:

                    11.25 (rent increase) X 34 months = 382.50 per room.

          In accordance with applicable provisions of the Rent Stabilization 
          Law and Code, collection of the rent increase is limited to and 
          shall not exceed 6% of the rent charged on the June 1, 1988 rent 
          roll date in any 12 month period with a similar limitation on the 
          collection of temporary arrears, with any overage collectible in 
          succeeding years subject to the same limitation on collectibillity.


                                          4






          ADMIN. REVIEW DOCKET NO. GB630282RO

          The Commissioner notes that in regards to rent controlled tenants, 
          the Rent Administrator correctly allocated a J-51 tax abatement 
          offset of $2.57 which resulted in a rent increase for rent 
          controlled tenants of  $8.68 per room, per month.  ($11.25 - 2.57 
          = $8.68).  No offset is due to rent stabilized tenants in as much 
          as the installations were commenced prior to June 28, 1988.

          A tenant who has a valid Senior Citizen Rent Increase Exemption 
          Order (SCRIE) is exempted from that portion of the increase which 
          would cause the rent to exceed one-third of the tenant's household 
          monthly disposable income.  A tenant who may be entitled to this 
          benefit may contact the New York City Department of the Aging by 
          calling (212) 240-7000.

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

          ORDERED, that this petition be, and the same hereby is, granted; 
          that the Administrator's order be, and the same hereby is, modified 
          to grant a rent increase of $11.25 per room, per month with respect 
          to stabilized apartments with an effective date of May 1, 1991 for 
          reasons hereinabove provided subject to the conditions of 
          collectibility.  The order and  determination of the Rent 
          Administrator is hereby affirmed in all other respects.

          ISSUED:



                                                       ____________________
                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner



















                                          5






    

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