OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA

                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          ------------------------------------X   ADMINISTRATIVE REVIEW
          APPEALS OF                                          GC410359RT
             LOUISE CUMMINGS and
             AILEEN CHANCO                        RENT ADMINISTRATOR'S
                               PETITIONERS        DOCKET NO.: EJ430161OM


          The above-named tenants timely filed or refiled petitions for 
          administrative review (PAR's) against an order issued on February 
          12, 1992 by a Rent Administrator (Gertz Plaza) concerning the 
          housing accommodations known as 160, 162, 164 and 172 East 85 
          Street, New York, NY, various apartments, wherein the Rent 
          Administrator determined that the owner was entitled to a rent 
          increase based on various major capital improvements.

          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 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 these administrative appeals.

          The owner commenced this proceeding on October 10, 1990 by 
          initially filing an application for a rent increase predicated on 
          the installation of the following items:

                      ITEMS                            CLAIMED COST 
          1. Boiler/Burner                             $44,000.00
          2. Asbestos Removal                          $ 8,343.00
          3. Asbestos Air Monitor                      $ 1,650.00
          4. Insulation                                $ 1,732.00
          5. Filing Fee                                $   800.00
             TOTAL CLAIMED COST                        $56,525.00

          In support of his application, the owner submitted copies of 
          contracts, permits, approvals and cancelled checks.

          ADMIN. REVIEW DOCKET NOS.: GE410276RT  et. al

          Six tenants responded to the owner's application objecting to the 
          increase but failed to raise any complaints pertaining to the 
          installation.  The petitioner-tenants herein, did not submit any 
          response to the application.

          On February 12, 1992 the Rent Administrator issued the order here 
          under review finding that the installation of the boiler/burner 
          which services all four of the subject buildings and the removal of 
          asbestos qualified as major capital improvements, determining that 
          the application, as it relates to such items, 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 
          the net approved cost of $52,343.00.  Disallowed, by the 
          Administrator, was the total of $4,182.00  for filing fees, the 
          installation of an air monitor and the insulation of pipes since 
          these items did not qualify as major capital improvements.

          In her petition under docket number GE410276RT, the tenant 
          contends, in substance, that the Rent Administrator's order states 
          160/172 East 85 Street as the building address and does not state 
          162 East 85 Street where said tenant resides; and that an  increase 
          for the installation of the boiler/burner has already been granted.  

          In the petition under docket number GC410359RT, another tenant 
          contends, in substance, that she signed a vacancy lease  on January 
          2, 1992 at a rental of $1,000.00 per month; that at the time of the 
          signing of said lease, the tenant was not notified, in writing or 
          verbally, that an increase for a major capital improvement was 
          pending before the Division; that according to the Rent 
          Stabilization Lease Rider, the last registered rent was above the 
          rent said tenant was asked to pay; that if there were such a 
          pressing need for a higher rent it is not at all understandable why 
          the rent was offered to said tenant below the presently allowable 
          rate; and that the order states 160/172 East 85 Street, and not 162 
          East 85 Street, as being the buildings required to pay the rent 

          In response to the petition under docket number GE410276RT, the 
          owner's representative contended, in substance, that the objections 
          made by the tenant are groundless; that the owner is entitled to an 
          increase for major capital improvements which upgrade the entire 
          building; that the installation of a boiler/burner comprises a 
          major capital improvement; that the rent increase was correctly 

          ADMIN. REVIEW DOCKET NOS.:  GE410276RT  et. al

          granted by the DHCR in accordance with the Rent Stabilization Code; 
          that the owner is not aware of any previous orders granting an 
          increase for a boiler/burner installation and the removal of 
          asbestos to which the tenant refers; that the tenant is the only 
          complaining tenant out of eighty-nine tenants in the building; that 
          the tenant has erroneously appealed a DHCR decision which was 
          rightfully based on the regulations governing major capital 
          improvement rent increases; and that the owner has sent an 
          affidavit swearing that prior to the purchasing of the building, 
          the owner had checked the records and had found that no rent 
          increase was ever granted for the installation of boiler/burner or 
          for the removal of asbestos.

          With regard to the allegations made by the tenant under docket 
          number GC410359RT, the owner's representative contends, in 
          substance, that the tenant's objections are groundless since the 
          tenant was never billed for any major capital improvement rent 
          increase; that the tenant commenced her tenancy on January 15, 1992 
          at a rental of $1,000.00 per month, which was less than the 
          regulated rent and vacated the premises on January 31, 1993; and  
          that the tenant was never billed more than the $1,000.00 per month 
          during her tenancy.  In order to support this claim, a copy of the 
          rental ledger, showing the amount paid each month by the 
          petitioner-tenant was submitted.

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

          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 Commissioner notes that the installation of a new boiler/burner 


          ADMIN. REVIEW DOCKET NOS.: GE410276RT et. al

          and the removal of asbestos, done in conjunction with the 
          installation of the boiler/burner, qualify as major capital 
          improvements for which an increase may be warranted, providing the 
          owner otherwise so qualifies.  The record indicates that the owner 
          substantiated its application by submitting copies of the 
          contracts, permits, 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 tenants do not 
          allege any errors on which the Administrator's order was based but 
          merely assert that the rent increase is only applicable for 
          buildings 160 and 172 East 85 Street and not 162 East 85 Street; 
          that an increase for boiler/burner installation was already granted 
          at some unspecified time in the past; and that the tenant, under 
          docket number GC410359RT was never informed of a pending major 
          capital improvement application and, therefore, should not be made 
          to pay the said increase.

          With regard to the allegation made by the tenants that their 
          building address was not included among those required to pay the 
          increase by the order, the Commissioner finds that the said order 
          stated 160/172 East 85 Street since that was the entry made in the 
          computer system in use but that the said address also includes the 
          other buildings, namely 162 and 164 East 85 Street, with street 
          addresses between 160 and 172 East 85 Street.  The Commissioner 
          further notes that the application submitted by the owner 
          specifically states the subject buildings as 160, 162, 164, and 172 
          East 85 Street and that the tenants were each served with a copy of 
          said application.

          A check of the Division's records reveals that no rent increase was 
          ever granted for the installation of a new boiler/burner or for the 
          removal of asbestos, contrary to the claim made by the tenant under 
          docket number GE410276RT.

          With regard to the issue raised by the tenant under docket number 
          GC410359RT, namely that she was never informed of a pending major 
          capital improvement application, upon the signing of the vacancy 
          lease, 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 to be collectible during the term 


          ADMIN. REVIEW DOCKET NOS.: GE410276RT et. al

          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 the renewal lease 
          contains a general authorization provision for adjustment of the 
          rent reserved by the DHCR order.  However, the Commissioner finds 
          that this tenant was not charged the increase granted by this order 
          and that her rent remained at $1,000.00 during her entire tenancy.

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

          ORDERED, that these administrative appeals be, and the same hereby 
          are denied, and that the Rent Administrator's order be, and the 
          same hereby, is affirmed.


                                                    JOSEPH A. D'AGOSTA
                                                    Deputy Commissioner



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