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 
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO.: GE430160RO
                                              :  
          875 WEST 181 ASSOCIATES                RENT ADMINISTRATOR'S
          c/o MARK GREENBERG                     DOCKET NO.: EI530088OM
                                   PETITIONER : 
          ------------------------------------X                             

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

          On May 12, 1992 the above named petitioner-owner filed an 
          administrative appeal against an order issued on April 9, 1992 by 
          the Rent Administrator (Gertz Plaza, Jamaica, New York) concerning 
          the housing accommodations known as 875 West 181 Street, New York, 
          New York, various apartments, wherein the Administrator denied the 
          owner's request for a major capital improvement (MCI) rent increase 
          for an apartment/hallway window installation because as per the 
          third amendment dated January 23, 1986 to the cooperative offering 
          plan, "the sponsor agreed to have the windows installed at its sole 
          cost and expense".

          On appeal, the petitioner-owner states, in substance, that the use 
          of the phase, "sole cost and expense", was merely used to 
          differentiate the use of his funds in paying for the improvements 
          in question from the use of any reserve funds or any credit taken 
          against the reserve fund, and that the sponsor intended to pay for 
          improvement so that he would be fully eligible to apply for an MCI 
          rent increase.

          In response to the owner's petition, the tenants filed an answer 
          stating in substance, that the owner agreed to pay for the window 
          installation at his sole cost and expense as indicated in the third 
          amendment of the Cooperative Offering Plan, and that the owner 
          never implied that the cost would be passed along to the tenants.

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

          Where an owner makes representations during the conversion process 
          which obligate the owner/sponsor to perform work at its "sole 
          expense" or "sole cost and expense", tenants would be justified in 
          relying on this representation in deciding whether to purchase 
          their individual apartments.  Thus, the owner cannot thereafter 
          turn to the non-purchasing tenants in an attempt to have them 
          subsidize the Sponsor for the cost for the work which the Sponsor 
          assumed in a public offering as its sole responsibility and 
          obligation (Policy Statement 89-9).









          ADMIN. REVIEW DOCKET NO.: GE430160RO




          The Commissioner notes that the third amendment to the cooperative 
          offering plan states that Sponsor agreed to do the major capital 
          improvement (windows) at his sole cost and expense.

          Since it is clear from the record that the Sponsor made a binding 
          representation in a public offering during the cooperative 
          conversion process to install the windows at its sole cost and 
          expense, the owner is precluded from recovering the cost of the 
          work in an MCI increase pursuant to Policy Statement 89-9.

          In this connection the Commissioner notes that Policy Statement 89- 
          9 does not reflect a change in policy, but rather reflects a line 
          of administrative rulings (AE730001RT,ART13197L and BL420122RT) 
          rendered prior to the issuance of this policy statement which 
          precluded MCI rent increases where the sponsor undertook to perform 
          the work at no expense to the tenants (who had reason to rely on 
          the representation made in the public offering), but rather at the 
          sponsor's sole cost and expense.

          On the basis of the entire evidence of record, it is found that the 
          Administrator's order is correct and should be affirmed.

          THEREFORE, in accordance with the applicable provisions of the Rent 
          Stabilization Law and Code, the Rent and Eviction Regulations for 
          the City of New York, and Operational Bulletin 84-1, it is

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

          ISSUED:











                                                                        
                                               JOSEPH A. D'AGOSTA
                                               Deputy Commissioner




                                                    

    

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