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

      APPEALS OF                             DOCKET NOS.: GI 410028-RT
                                          :               GI 410032-RT
         VARIOUS TENANTS OF 200 WEST                      GI 410038-RT
         16TH STREET, NEW YORK, NY                        GI 410047-RT
                            PETITIONERS   :               GI 410048-RT
      ------------------------------------X               GI 420270-RT
                                             RENT ADMINISTRATOR'S
                                             DOCKET NO.: EB 430001-OM

           NOS. GI 410028-RT, GI 410032-RT, GI 410038-RT. GI 410047-RT AND
                   GI 420270-RT AND GRANTING IN PART PETITION FOR
                    ADMINISTRATIVE REVIEW DOCKET NO. GI 410048-RT

      The petitioner-tenants timely filed administrative appeals against an order 
      issued on August 7, 1992 by the Rent Administrator (92-31 Union Hall 
      Street, Jamaica, New York) concerning the housing accommodations known as 
      200 West 16th Street, New York, New York, various apartments, wherein the 
      Administrator granted major capital improvement (MCI) rent increases for 
      the controlled and stabilized apartments in the subject premises based on 
      the installation of new apartment windows.

      The owner commenced the proceeding below by filing its MCI application in 
      February of 1990.  In support of its application, the owner submitted 
      copies of the contract, invoice, contractor's certification and cancelled 

      Twenty tenants objected to the owner's application and contended, inter 
      alia, that the new windows were defective.

      The owner responded to the tenants' objections by alleging that all of the 
      defective windows had been repaired.

      In rebuttal, eight tenants (apartments 2G, 6D, 6I, 8K, 9B, 9H, 12F and 15A) 
      stated that their windows still had not been repaired.

      The subject premises was inspected on June 3 and 4 of 1992 wherein the 
      inspector noted that all of the above-mentioned apartments contained 
      defective windows.

      On August 7, 1992, the Rent Administrator issued the order here under 
      review, finding that installation qualified as an MCI, determining that the 
      application complied with the relevant laws and regulations based upon the 
      supporting documentation submitted by the owner, and authorized rent 
      increases of $9.80 per room, per month (based on a total revised room count 
      of 260) for rent controlled and rent stabilized apartments.  Furthermore, 


          ADMIN. REVIEW DOCKET NO.: GI 410028-RT, et al.

      the Administrator barred the owner from collecting the rent increase from 
      the eight apartments listed above until all repairs to the defective 
      windows have been completed.

      On appeal, the tenants contend, in substance, as follows:  Apartments 7D 
      and 12C:  they should not have to pay a retroactive or a permanent 
      increase; they should only be assessed for the value of the windows and 
      should be given the opportunity to pay the increase in one lump sum.  
      Apartment 8D:  the owner did not install any new windows in her apartment, 
      rather the previous tenant installed the windows and she reimbursed the 
      previous tenant for a portion of the cost of such windows.  Apartment 11A: 
      he was never notified of the MCI application and his windows were not 
      repaired until April 1992.  Apartment 12A: several of her windows were 
      improperly installed and neither her vacancy lease of July 1, 1990 nor her 
      renewal lease of July 1, 1992 (copies of which were submitted) notified her 
      of any MCI increase for windows.  Apartment 15A: The owner under stated 
      total room count as evidenced by copy of an order and opinion issued on 
      February 2, 1981 under Docket No. CPLA 32,498.  

      The owner did not submit a response to any of the tenants' petitions.

      After a careful consideration of the entire evidence of record, the 
      Commissioner is of the opinion that the administrative appeal Docket No.   
      GI 410048-RT should be granted in part; and that the remaining petitions 
      should be denied.  

      At the outset the Commissioner notes, as confirmed by the record, that the 
      tenants of apartments 8D and 11A were served by the Administrator with 
      notice of the instant application and that they failed to respond thereto.  
      Fundamentals principals of the administrative appeal process and Section 
      2529.6 of the Rent Stabilization Code prohibit a party from raising issues 
      on appeal which were not raised below.  The tenants of said apartments 
      could have raised the very issues before the Rent Administrator which they 
      seek to raise for the first time on appeal.  Accordingly, the Commissioner 
      is constrained to foreclose consideration of these issues in this appeal 

      Rent increases for major capital improvements are authorized by Section 
      2202.4 of the Rent and Eviction Regulation 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 be generally 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.  It is the established 
      position of the Division that the building-wide installation of windows, as 
      in the instant case, meets the definitorial requirements of a MCI; and that 
      the Administrator's order was properly made retroactive with respect to 
      stabilized apartments in accordance with the applicable provisions of the 
      Rent Stabilization Code.

          ADMIN. REVIEW DOCKET NO.: GI 410028-RT, et al.

      The petitioners' claim that the rent increase should be eliminated upon the 
      expiration of the amortization period is rejected because the New York 
      State Court of Appeals in the case of Matter of Ansonia Residents 
      Association v. DHCR ruled that the rent regulatory laws mandate that the 
      increase be permanent.

      With regard to the petition filed by the tenant of apartment 15A to the 
      effect that the amended room count is incorrect, the Commissioner notes 
      that the prior room count determination is not, under the circumstances of 
      this case, binding upon the Administrator and that the Administrator 
      properly use a reduced room count in accordance with Policy Statement 90-3 
      (February 8, 1990) then in effect which defines a room for MCI purposes as 

           1)  A windowless kitchen containing at least 59 square feet.

           2)  An enclosed area with window containing at least 60 square

           3)  An enclosed area without window containing at least 80 
           square feet.

           4)  Bathrooms, walk-in closets, etc. are excluded.

      However, with respect to the contention of the tenant of apartment 12-A 
      that he was not notified of the instant proceeding (and that windows in 
      said apartment are defectively installed), Sections 2522.5 (d)(2) and (4) 
      of the Rent Stabilization Code provide that when an application for a rent 
      increase for an MCI is pending before the agency, the vacancy lease must 
      provide that the rent may be increased pursuant to an order issued by the 
      agency; that such application is pending before the DHCR including the 
      basis for the requested increase; and that if granted, the increase may be 
      effective during the lease term.  In absence of the same, no increase shall 
      be collectible until the expiration of the lease term in effect at the time 
      the order is issued.

      The undisputed evidence of record in the instant case confirms that neither 
      the vacancy lease nor the renewal lease executed by the tenant of apartment 
      12A contains the required information concerning the pending MCI proceeding 
      would have enabled the owner to collect an increase upon issuance of the 
      Administrator's order.  In the event of a change in tenancy during a major 
      capital improvement proceeding, as in the instant case, it is the 
      obligation of the owner to notify the new tenant of the pendency of such 
      proceeding and to advise the Division of this change in tenancy.  While not 
      fatal to the owner's application, such failure to include notice of the 
      application in the tenant's lease is cause for modification of the order.  
      Although the owner is not entitled to any retroactive increase as well as 
      to any increase during the lease term herein, the increase will be 
      collectible upon a renewal lease commencing July 1, 1993 provide the owner 
      has made the necessary repairs concerning the windows in apartment 12A.


          ADMIN. REVIEW DOCKET NO.: GI 410028-RT, et al.

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

      ORDERED, that the petitions for administrative review under Docket Nos. GI 
      410028-RT; GI 410032-RT; GI 410038-RT; GI 410047-RT and GI 420270-RT be, 
      and the same hereby are denied; that petition for administrative review  
      Docket No. GI 410048-RT be, and the same hereby is granted in part; that as 
      to apartment 12-A the Administrator's order be, and the same hereby is 
      modified so as to provide that the MCI increase be, and the same hereby is 
      effective as of July 1, 1993, the date of the first renewal lease after 
      issuance of the Administrator's order provided the owner complies with the 
      direction herein to make such repairs as are necessary to the windows in 
      said apartment within 45 days from the date of this order; and that as so 
      modified said order be, and the same hereby is affirmed; and it is further

      ORDERED, that the owner repay to the tenant of apartment 12-A excess rent, 
      if any, arising as a result of this order within thirty (30) days from the 
      date of issuance hereof.

      Note:  The determination herein is without prejudice to the tenants, or any  
             of them, filing a complaint with the Division if the owner is not   
             now maintaining all required service.


                                           JOSEPH A. D'AGOSTA
                                       Acting Deputy Commissioner


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