STATE OF NEW YORK
                      DIVISION OF HOUSING AND COMMUNITY RENEWAL
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA

                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          ------------------------------------X   ADMINISTRATIVE REVIEW
          IN THE MATTER OF THE ADMINISTRATIVE     DOCKET NOS.:               
          APPEALS OF                              GD410038RT/GD410076RT
                   VARIOUS TENANTS OF             GD410162RT/GD410163RT
                   400 EAST 55TH STREET           GD410165RT/GD410166RT
                   NEW YORK, NEW YORK             GD410171RT/GD410224RT
                                                  GD410225RT/GD410276RT
                                                  GD410292RT,

                                                  RENT ADMINISTRATOR'S
                                PETITIONERS        DOCKET NO.: EJ410178OM
          ------------------------------------X

            ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW

          Various tenants timely filed petitions for administrative review 
          (PARs) against an order issued on March 19, 1992 by the Rent 
          Administrator (Gertz Plaza) concerning the housing accommodations 
          known as 400 East 55th Street, New York, New York, various 
          apartments, wherein the Rent Administrator determined that the 
          owner was entitled to a rent increase based on major capital 
          improvements (MCI). The subject apartments are all rent stabilized.

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

          The owner commenced this proceeding on October 12, 1990 by filing 
          an application for an MCI rent increase predicated on the 
          installations of new apartment windows, pointing/waterproofing, 
          parapet and a new roof.

          The order of the Rent Administrator, appealed herein, granted in 
          part, the owner's application and authorized rent increases for the 
          rent stabilized apartments base upon total approved costs of 
          $450,788.78.  Said order contains the notations that in response to 
          the owner's application two tenants complained of defective windows 
          and water seepage; that the owner was notified of the tenants' 
          complaints and responded that all necessary repairs had been made; 
          and that subsequent notices mailed to tenants on January 21, 1992 
          elicited no further responses.

















          ADMIN.  REVIEW DOCKET NOS.  GD410038RT ET AL

          In their petitions for administrative review, the tenants request 
          reversal of the Administrator's order and contend, in substance, 
          that the Administrator's order in granting MCI rent increases was 
          arbitrary and capricious since no tenant in the premises received 
          the notice allegedly mailed on January 21, 1992; that the owner  
          failed to maintain services in the subject premises and should not 
          be rewarded; that the cost of windows is excessive and should be 
          disputed because it includes monies paid to the company that 
          erected the scaffolding; that pointing/waterproofing and parapets 
          are not major capital improvements but the result of failing to 
          properly maintain the premises; and that the tenant in apartment 
          10H took occupancy in July 1991 and should not be responsible for 
          the retroactive payment.

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

          Rent increases for major capital improvements are authorized by 
          Section 2522.4 of the Rent Stabilization Code for rent stabilized 
          apartments.  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 was expired.  The installations involved herein, 
          to replace old items the useful lives of which have expired, meet 
          the definitional requirements of major capital improvements. 

          Regarding the tenants' contention that none of the tenants received 
          the notice mailed on January 21, 1992, a review of the record 
          discloses that said notice was mailed to the tenants in apartments 
          8H and 18C; that these two tenants are the only ones who complained 
          about the adequacy of the installation; that they did not respond 
          to the Division's subsequent inquiry; and that they are not 
          petitioners herein. 

          With respect to the tenants' allegation that the owner  failed to 
          maintain services in the subject premises, the Commissioner notes 
          that there are no rent reduction orders based on the owner's 
          failure to maintain services of a building-wide nature outstanding 
          against the subject premises nor have any service complaints by the 
          tenants been sustained either prior to or subsequent to the 
          issuance of the order appealed herein.  The determination herein is 
          without prejudice to the rights of the tenants filing an 
          application with the Division for a rent reduction based upon a 
          decrease in services, if the facts so warrant.












          ADMIN. REVIEW DOCKET NO.  GD410038RT ET AT

          As to the tenants' contention relating to the cost of the windows, 
          the record in the instant case, which includes copies of various 
          proposals, invoices, contractors' certifications and cancelled 
          checks, indicates that the owner correctly complied with the 
          applicable procedures for a major capital improvement and 
          substantiated its allowable costs to the extent recognized by the 
          administrator and that such costs did not include the cost of 
          bridging.  

          Where, as in the instant case, the tenant in apartment 10H took 
          occupancy pursuant to a vacancy lease commencing after the owner 
          had filed its application, the Commissioner notes that for the MCI 
          increase granted by the Administrator's order to be collectible 
          during the term of the petitioner's vacancy lease, such vacancy 
          lease would have to contain a specific clause advising the tenant 
          of the docket number of the pending proceeding and advising that 
          the rent charged was subject to 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 was not collectible until the expiration of 
          the lease term in effect at the time of issuance of the MCI order,  
          and on a prospective basis, provided 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 right of the tenant to file a rent overcharge 
          complaint with the Division, if the owner has collected rent in 
          excess of the lawful regulated amount.
           
          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          it is,

          ORDERED, that these petitions be, and the same hereby are, denied; 
          and that the Rent Administrator's order be, and the same hereby is, 
          affirmed.
                                   
          ISSUED:




                                                                          
                                                  JOSEPH A. D'AGOSTA
                                                  Deputy Commissioner








    

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