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

      APPEALS OF                             DOCKET NOS.: 
                                          :  GD610409-RT/ GD610432-RT
      VARIOUS TENANTS OF 185 McCLELLAN       GD610429-RT/ GD610405-RT
      STREET                                 GD610410-RT/ GD610368-RT
                            PETITIONERS   :  GD610400-RT/ GD610406-RT
      ------------------------------------X  GD610428-RT/ GD610402-RT
                                             GD610407-RT/ GD610430-RT
                                             GD610403-RT/ GD610408-RT
                                             GD610431-RT/ GD610404-RT

                                             RENT ADMINISTRATOR'S 
                                             DOCKET NO.: EH 630001-OM


      The above-named petitioners-tenants timely filed petitions for 
      Administrative Review against an order issued on March 27, 1992 by the Rent 
      Administrator (Gertz Plaza), concerning housing accommodations known as 185 
      McClellan Street, various apartments, Bronx, New York, wherein the 
      Administrator determined that the owner was entitled to a rent increase 
      based on a major capital improvement.

      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 the administrative appeals.

      The 185 McClellan Street Tenants Association and, individually, the tenants 
      of fifteen apartments filed the within administrative appeals against the 
      Administrator's order.  These appeals are consolidated herein for a uniform 
      determination in this proceeding as they involve common issues of law and 

      The owner commenced the proceeding below on August 2, 1990 by filing an 
      application to increase the rents ofstabilized and controlled apartments 
      for the "repiping" of the subject premises at a total claimed cost of 
      $319,000.00.  Various tenants objected thereto, three of who alleged 
      clogged drains and water leaks.  The president of the tenants' association 
      requested an extension to respond to the application but no further 
      response was received.  

      On March 27, 1992 the Administrator issued the order appealed herein 
      authorizing a rent increase for the work in question.  The increase was 
      suspended as to one apartment based upon the report of a physical 

      In their petitions for administrative review the tenants request reversal 
      or modifications of the Rent Administrator's order alleging inter alia, 
      that the plumbing is defective; that as a result many apartments have water 
      leaks in the walls and ceilings, and consequently the walls have          


          ADMIN. REVIEW DOCKT NO.: GD 610404-RT,

      deteriorated; that on numerous occasions there have been serveral floods in
      the lobby; that the pipelines openings were not properly sealed and 
      insulated; and that as a result, rodents have invaded their apartments and 
      the public areas through the openings.  The tenants further allege that 
      many of them were not served with a coy of the owner's MCI application; and 
      that the owner was previously granted MCI rent increases for various items
      including repiping (Docket No. AG 630115-OM).  The tenant of apartment 3N 
      alleges, in substance, that no repairs have been effectuated in that 
      apartment.  The tenant of apartment 5D states, in substance, that he became 
      a tenant on January 31, 1991; and that he was unaware of the owner's 
      pending MCI application.  Also, various tenants have complained of water 
      backups and clogged drains in sinks and toilets in their individual 

      In response to the tenants' petitions, the owner filed answers' stating, in 
      substance, that the repiping installation was performed in a workmanlike 
      manner; that the installation has significantly reduced the frequency of 
      plumbing problems; that the pipes are not defective; that the lobby has not 
      been flooded; and that it had complied with all the requirements for the 
      MCI rent increase.

      After careful consideration of the entire record, the Commissioner is of 
      the opinion that this proceeding should be remanded to the Rent 
      Administrator for further appropriate processing in accordance with this 
      order and opinion.

      At the outset the Commissioner notes that the proceeding under Docket No. 
      AG 630115-OM differed from that of the herein repiping installation.  The 
      record indicates the owner had applied for a rent increase adjustment based 
      on the installation of various items including new piping for the existing 
      boiler/burner.  The Administrator disallowed the claimed cost ($5,800.00) 
      for that installation since said work was not done in conjunction with the 
      the new heating system.  

      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.  Piecemeal work or ordinary 
      repairs and maintenance does not constitute work for which a rent increase 
      adjustment is warranted under current and past procedures.

      It is the established position of the Division that the installation of new 
      plumbing on a building-wide basis including new branches and fixtures 
      constitutes a major capital improvement for which a rent increase 
      adjustment may be warranted.  


          ADMIN. REVIEW DOCKT NO.: GD 610404-RT,

      A review of the record in the proceeding below discloses that the owner 
      submitted to the Administrator in support of its application various 
      documentation, including copies of a contract detailing the work to be 
      performed, contractor's certification, and cancelled checks for the work in 

      In regard to the various objections raised by the tenants during the course 
      of the Rent Administrator's proceeding the Commissioner notes that only 
      three tenants (Apt. Nos. 2E, 3B and 3N) complained about problems with the
      plumbing prior to the issuance of the order under review.  However, an 
      inspection was conducted of only one (Apt. No. 2E) of the three apartments 
      and the inspector found problems existed in that unit.

      As to the other two tenants (Apt. Nos. 3B and 3N) who alleged plumbing 
      defects and whose apartments were not inspected, the Commissioner is of the 
      opinion that the Administrator failed to properly address their complaints 
      and thus, the Commissioner deems it appropriate to remand these proceedings 
      for further processing, including an inspection to ascertain whether all 
      plumbing problems and defects in the apartments hereinabove-cited have been 

      The Commissioner notes that although other tenants are complaining about 
      various problems with the repiping installation, they failed to raise their 
      complaints during the course of the proceeding below and thus their 
      complaints may not, pursuant to Section 2529.6 of the Code, be considered 
      at the administrative level.  However, the serious nature of the tenants' 
      persuasive allegations and the possibility of a persistent condition at the 
      subject premises consisting of water leaks and deterioration of walls and 
      ceilings in the public areas, if proven, could constitute an immediately 
      hazardous condition, putting at risk all of the tenants.  Thus, the 
      Commissioner directs the Administrator's attention to an examination of 
      these complaints, including consideration of an inquiry into the source of 
      the alleged water damage, the extent to which it has impaired the 
      structural integrity of the subject building and whether or not, after 
      making said inquiry, the Administrator should revoke the appealed order.

      As to those service items which the tenants have complained of in this 
      proceeding but as to which the Administrator's attention has not been 
      directed on remand, this order and opinion is issued without prejudice to 
      the tenants' filing applications with the Division for rent reductions 
      based on a decrease in services, if the facts so warrant.

      Regarding the tenant's assertion (apartment 5E), that he was unaware of the 
      owner's pending MCI application the Commissioner notes that for the MCI 
      rent increase granted by the Administrator's order appealed herein to be 
      collectible during the term of the petitioner-tenant's vacancy lease, said 
      lease would have to contain a specific clause advising the tenant that the 


          ADMIN. REVIEW DOCKT NO.: GD 610404-RT,

      rent charged was subject to additional increase during the current lease 
      term in effect as provided by the Code and established Division procedures.  
      In the absence of same, said rent increase is not collectible until the 
      expiration of the lease term in effect at the time of issuance (March 27, 
      1992) of the MCI order.  The record, as amplified on appeal, including a 
      rider, signed by the tenant, specifically advising the tenant of the 
      pending docket number; and that the rent charged was subject to an 
      additional rent increase for repiping installation, when granted by the 

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

      ORDERED, that these petitions be and the same hereby are granted to the 
      extent of remanding these proceedings to the Rent Administrator for further 
      processing in accordance with this order and opinion.  The automatic stay 
      of so much of the Administrator's order as directed a retroactive rent 
      increase is hereby continued until a new order is issued upon remand.  
      However, the Administrator's determination as to a prospective rent 
      increase is not stayed and shall remain in effect until the Administrator 
      issues a new order upon remand.


                                           JOSEPH A. D'AGOSTA
                                          Deputy Commissioner


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