OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA

                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          ------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF                                           

                   LISA M. BOYD
                                                  RENT ADMINISTRATOR'S
                               PETITIONER         DOCKET NO.: EL410048OM 

          On March 20, 1992, the above-named petitioner-tenant timely filed 
          a Petition for Administrative Review (PAR) against an order issued 
          on February 27, 1992 by the Rent Administrator, (Gertz Plaza) 
          concerning the housing accommodations known as 590 Third Avenue, 
          Apartment 5D, New York, NY, wherein the Rent Administrator 
          determined that the owner was entitled to a rent increase based on 
          a major capital improvement (MCI).

          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 December 13, 1990 by 
          initially filing an application for a major capital improvement 
          rent increase predicated on the installation of a new 
          boiler/burner, at the subject premises, at a total claimed cost of 
          $26,200.00.  In support of his application, the owner submitted 
          copies of the permits, contracts, approvals and cancelled checks.

          In answer to the owner's application, several tenants responded 
          objecting to the rent increase.  They contended, in substance, that 
          the old boiler/burner was ineffective and broke down constantly; 
          and that it is the responsibility of the owner to provide heat and 
          hot water to the tenants.  They, however, failed to identify any 
          pertinent reason why the rent increase should not be granted.

          On February 27, 1992, the Rent Administrator issued the order here 
          under review finding that the installation of a new boiler/burner 
          qualified as a major capital improvement, determining that the 
          application complied with the relevant laws and regulations based 
          upon the supporting documentation submitted by the owner and 

          ADMIN. REVIEW DOCKET NO.: GC410231RT

          allowing rent increases for both rent controlled and rent 
          stabilized apartments based upon an approved cost of $26,200.00.

          In her petition for administrative review, the tenant contends, in 
          substance, that Section VII (2) of the Administrator's order states 
          that a vacancy lease must state a pending major capital improvement 
          application and list the items for which a major capital 
          improvement rent increase is sought; that her vacancy lease does 
          not state anything about a pending MCI; and that she had no idea 
          that an increase was pending.  She also submitted a copy of said 
          lease to substantiate her claim.

          In answer to the tenant's petition, the owner submitted a copy of 
          a letter sent to the tenant in which the owner stated that said 
          letter was to re-affirm its previous letter of April stating that 
          said tenant will not be charged any increase for the installation 
          of the new boiler/burner.

          After a careful consideration of the entire evidence of record, the 
          Commissioner is of the opinion that this petition should be denied.

          Rent increases for major capital improvements are authorized by 
          Section 2522.4 of the Rent Stabilization Code.  Under rent 
          stabilization, the improvement must generally be building-wide; 
          depreciable under the Internal Revenue Code, other than for 
          ordinary repairs; be required for the operation, preservation, and 
          maintenance of the structure; and replace an item whose useful life 
          has expired.

          The Commissioner notes that the replacement of a boiler/burner 
          qualifies as a major capital improvement for which an increase may 
          be warranted, providing the owner otherwise so qualifies.  The 
          record indicates that the owner substantiated his application by 
          submitting copies of the permits, contracts, approvals and 
          cancelled checks.  The record confirms that the owner correctly 
          complied with the applicable procedures for a major capital 
          improvement rent increase.  The Commissioner further notes that on 
          appeal, the tenant does not allege any errors on which the Rent 
          Administrator's order was based, but rather asserts that the 
          collectibility of the increase as to the subject apartment is 
          affected by the specific terms or omissions in her vacancy lease.

          The Commissioner notes that where the tenant took occupancy of the 
          apartment pursuant to a vacancy lease commencing after the owner 


          ADMIN. REVIEW DOCKET NO.: GC410231RT

          had filed its application, as is the case in the instant 
          proceeding, for the MCI increase, granted by the Administrator's 
          order to be collectible during the term of the tenant's vacancy 
          lease, such vacancy lease would have to contain a specific clause 
          advising the tenant of the pending proceeding and advising that the 
          rent charged was subject to an additional increase (during the 
          current lease term in effect) as provided by Section 2522.5 (d) (2) 
          of the Rent Stabilization Code and established Division precedent.
          In the absence of same, and in accordance with Section 2522.4 (a)
          (5), said increase is not collectible until the expiration of the 
          lease term in effect at the time of issuance of the MCI order, 
          providing that the renewal lease contains a general authorization 
          provision for adjustment of the rent reserved by the  DHCR order.

          This order and opinion is issued without prejudice to the tenant's 
          right to file a rent overcharge complaint if the owner has 
          collected any rent in excess of the lawful regulated amount.

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

          ORDERED, that this administrative appeal be, and the same hereby is 
          denied, and the Administrator's order be and the same hereby is 


                                                     JOSEPH A. D'AGOSTA
                                                     Deputy Commissioner


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