OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA

                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

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

                   JAMES W. HIPKISS
                                                  RENT ADMINISTRATOR'S
                               PETITIONER         DOCKET NO.: DI430130OM


          On April 24, 1992 the above-named petitioner-tenant timely filed a 
          Petition for Administrative Review (PAR) against an order issued on 
          March 27, 1992 by the Rent Administrator (Gertz Plaza) concerning 
          the housing accommodation known as 129 Perry Street, Apartment 2D, 
          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 September 15, 1989 by 
          initially filing an application for a major capital improvement 
          rent increase predicated on the installation of a building entrance 
          door, at the subject premises, at a total claimed cost of 
          $9,500.00.  In support of his application, the owner submitted 
          copies of contracts, permits and cancelled checks.

          In response to the owner's application, several tenants filed 
          answers objecting to the increase.  They contended, in substance, 
          that the door was replaced because of a violation of the Historical 
          Preservation Code and not because of deterioration; that this door 
          had to be replaced because of the owner's error of installing a 
          modern glass door which did not comply with Landmark Preservation 
          Standards; that the owner then applied for a rent increase, under 
          Docket No. CF430269OM, which was denied due to the owner's failure 
          to submit required information and evidence and also because said 
          installation did not constitute a major capital improvement but was 
          considered repairs and maintenance and finally, that the tenants 
          should not be made to pay for an error that was made by the owner. 
          The petitioner-tenant herein did not respond to the owner's 

          ADMIN.  REVIEW DOCKET  NO.: GD410298.RT

          On March 27, 1992 the Rent Administrator issued the order hereunder 
          review finding that the installation of the entrance door qualified 
          as a major capital improvement, determining that application 
          complied with the relevant laws and regulations based upon the 
          supporting documentation submitted by the owner and allowing rent 
          increases for both rent controlled and rent stabilized apartments 
          based upon an approved cost of $9,500.00.

          In his petition for administrative review, the tenant contends, in 
          substance, that he should not be obligated to pay a rent increase 
          since the order issued by the Rent Administrator states that a
          vacancy lease must state a pending MCI and list the items for which 
          a major capital improvement rent increase is sought and that his 
          vacancy lease does not state anything about a pending MCI. He also 
          submitted a copy of said lease to substantiate his claim.

          In answer to the tenant's petition the owner contends, in 
          substance, that the tenant is correct in stating that the MCI 
          information was not set forth in the tenant's April 15, 1990 
          vacancy lease; that the requirement to set forth the pending MCI 
          information only applies to the April 15, 1990 vacancy lease and 
          not to the May 1, 1991 renewal lease; that the tenant agreed, 
          pursuant to the renewal lease, to pay for any MCI increases granted 
          during the term of the lease; that the tenant has not been billed 
          and is not obligated to pay the retroactive rent increases granted 
          by the order and that the tenant is obligated to pay the increase 
          during the renewal lease period from the April 1, 1992 collection 
          date of the order.

          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 an entrance door 
          qualifies as a major capital improvement for which an increase may 
          be warranted.  The record indicates that the owner substantiated 
          his application by submitting copies of the contract, permits and 
          cancelled checks.  The record confirmed that the owner correctly 
          complied with the applicable procedures for a major capital 
          improvement rent increase.  

          ADMIN.  REVIEW  DOCKET   NO.: GD410298.RT

          The Commissioner notes that where the tenant took occupancy of the 
          apartment pursuant to a vacancy lease commencing after the owner 
          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 2522.4 (a) (5) 
          of the Rent Stabilization Code and established Division precedent.  
          In the absence of same, said increase is not collectible until the 
          expiration of the lease term in effect at the time of issuance of 
          the MCI order, March 27, 1992,providing the renewal lease contains 
          a general authorization provision for adjustment of the rent 
          reserved by the DHCR order.

          The Commissioner further notes that the undisputed evidence of 
          record in the instant case confirms that the vacancy lease of April 
          15, 1990 does not contain the required information concerning the 
          pending MCI proceeding nor does the renewal lease of May 1, 1991 
          contain such notice.

          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 increase authorized by the Rent Administrator's 
          order for any period prior to the expiration of the lease term, 
          April 30,1992, in effect at the time the Administrator's order was 
          issued.  The Commissioner deems it appropriate to additionally note 
          that the application previously filed by the owner under Docket No. 
          CF430269OM was subsequently withdrawn by the owner on May 9, 1989.  
          As the initial entrance door installation did not comply with the 
          specifications of the Landmarks Preservation Commission, which has 
          jurisdiction in this building, the owner was compelled to replace 
          the door again in 1989.  The increase allowed for this replacement 
          is properly authorized since the tenants were not charged any 
          increase for the prior installation of 1988. 

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


          ADMIN.   REVIEW   DOCKET  NO.: GE410298.RT

          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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