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

          -------------------------------------X   SJR No.  6635A
          APPEAL OF                                ADMINISTRATIVE REVIEW
                    LMC ASSOCIATES                 DOCKET NO.:  HA530009RO

                                                   RENT ADMINISTRATOR'S
                                   PETITIONER      DOCKET No.:  FE530026RK


          On December 31, 1992 the above named petitioner-owner timely 
          refiled a petition for administrative review (PAR) against an order 
          issued on  September 21, 1992, by the Rent Administrator, 92-31 
          Union Hall Street, Jamaica, New York, concerning the housing 
          accommodations known as 29-45 Sickles Street, New York, New York, 
          various apartments.

          Subsequent thereto, the owner filed a petition in the Supreme Court 
          pursuant to Article 78 of the Civil Practice Law and Rules seeking 
          an expeditious review of its PAR. This resulted in a decision of 
          the court remitting this proceeding to the Division for a 
          determination of the owner's PAR.

          The owner commenced this proceeding below by filing in August of 
          1988 an application for a rent increase based on the installation 
          of major capital improvements (MCIs), to wit: thermal windows; 
          boiler/burner; computer heating system; roof; pointing; and a water 
          pump at a total claimed cost of $223,675.00. 

          Forty-eight tenants responded to the application complaining of 
          defective windows, roof leaks and inadequate hot water. On March 5, 
          1990, the Division directed the owner to respond to the tenants' 
          complaints and to submit proof of repairs. The owner responded by 
          stating, in substance, that all of the new windows were caulked 
          inside and out; the hot water service was adequate; and the roof 
          was in satisfactory condition with no leaks occurring since its 

          ADMIN. REVIEW DOCKET NO. HA-530009-RO

          An inspection was performed by the Division on April 24 and 25 of 
          1990 with the following findings:  1) hot water was being provided 
          to the apartments; 2) there was evidence of leaks on the ceiling
          and/or walls of the following apartments - 3G, 3Q, 4L, 5A, 5C, 5D, 
          5J, 5Q and 5R; and 3) that problems existed with some of the 
          windows in the following apartments:  FF, 2B, 2D, 2F, 2T, 4A, 4M, 
          5A, 5C and 5N.

          In Docket Number CH530099OM issued May 30, 1990, the Rent 
          Administrator granted in part the owner's MCI application, 
          approving a rent increase for the boiler and the windows (excluding 
          capping of hallway windows and child guards), and denying a rent 
          increase for the water pump and fuel computer as work which did not 
          qualify as MCIs. The Administrator also denied a rent increase for 
          the pointing work found to be inadequate; and for the roof 
          insulation, resurfacing and vents because a 3 ply roof was not 
          installed. Finally, the Administrator exempted ten apartments (FF, 
          2B, 2D, 2F, 2T, 4A, 4M, 5A, 5C and 5N) from the window portion of 
          the rent increase.

          On June 28, 1990, the owner filed a PAR (albeit on two separate 
          forms), Docket No. EF530157RO, against the Administrator's order 
          stating in substance, that the roof installation constituted an 
          MCI, and that the windows of the exempted apartments had been 

          In a letter dated April 29, 1991, the owner requested 
          reconsideration of the denial of an MCI increase for the roof 

          On May 29, 1991, the Rent Administrator reopened the proceeding and 
          proposed to reconsider his earlier order (CH530099OM).

          On April 28, 1992 the owner's PAR, Docket No. EF530157RO, was 
          dismissed as moot because of the reopening of the underlying 
          proceeding. During the reopened proceeding, several tenants 
          continued to complain of recurring leaks and water damage.

          On July 31 and August 12, 1992 inspections disclosed evidence of 
          leaks in the living room and kitchen ceilings of apartment 5E and 
          evidence of water stains and peeling paint and plaster in apartment 

          ADMIN. REVIEW DOCKET NO. HA-530009-RO

          On September 21, 1992, under Docket Number FE530026RK, the Rent 
          Administrator reconsidered the record and found that the order 
          issued on May 30, 1990, under Docket No. CH530099OM, should be 
          affirmed.  Upon reconsideration, it was determined that the roof 
          installation was not performed in a workmanlike manner.

          On appeal the owner contends, in substance, that the 
          Administrator's order is incorrect and should be modified because: 
          A) according to Policy Statement 91-2, MCI eligibility applies to 
          a roof of less than three-ply if the installation was commenced 
          prior to March 25, 1991, and the work herein was commenced and 
          completed in 1988, and clearly qualifies as an MCI; B) if the 
          inspector had inspected the roof, it would have been found that the 
          roof was in good condition with no leak damage (the owner submitted 
          sworn statements, prepared by the owner, from the tenants of 
          apartments 5E and 5J wherein  they both state that they have not 
          had any leaks in their apartments since the installation of the new 
          roof); C) the Rent Administrator also erred in relying on the 
          inspections performed nearly 4 years subsequent the installation 
          of the new roof; D) the owner was never notified of the inspection 
          date and was not afforded an opportunity to comment on the results 
          of the inspection; and E) only ten of the ninety-four apartments in 
          the subject building were found to have problems with the windows, 
          one window per apartment on average had a minor defect (the owner 
          submitted sworn statements from the ten tenants confirming that all 
          windows within their respective  apartments were in good working 

          The Commissioner is of the opinion that this petition should be 

          Whereas the Administrator's determination with respect to the roof 
          was predicated on a newly issued Policy Statement (90-6), the 
          Commissioner notes that the eligibility requirements of a roofing 
          installation, for consideration as a major capital improvement, was 
          effectively revised pursuant to Policy Statement (91-2), issued 
          February 16, 1991, and made effective 30 days thereafter. The 
          Commissioner notes that the subject roof installation was completed 
          several years prior to the effective date of Policy Statement 91-2, 
          and did constitute an MCI for which a rent increase may be 
          warranted, provided the owner otherwise so qualifies.

          ADMIN. REVIEW DOCKET NO. HA-530009-RO

          In order for work to qualify for a major capital improvement rent 

          increase, it must meet various criteria, including the requirement 
          that the installation be performed in such a workmanlike manner so 
          as to inure to the benefit of all tenants.  While the installation 
          of a new roof cap sheet of the type involved herein has been held 
          to qualify as a major capital improvement at the time the work in 
          question was performed, such roof must be installed in such a 
          manner that for a reasonable period of time thereafter the 
          building, particularly the top floor apartments which are most 
          directly affected, are free from exterior water seepage emanating 
          from the roof.

          Inspections performed by DHCR on April 24 and 25 of 1990 during the 
          original MCI proceeding found that of the eleven top (5th) floor 
          apartments inspected, six apartments displayed ceiling damage from 
          roof leaks. Furthermore, numerous tenants continued to complain of 
          recurring leaks during the reopened proceeding.

          Inspections performed on July 31 and August 12 of 1992 found that 
          of the six top (5th) floor apartments inspected, two apartments 
          displayed ceiling damage from roof leaks.

          Accordingly, the Commissioner finds that the Administrator was 
          correct to have denied the application for a new roof based upon 
          the continued water seepage.

          With regard to the window installation, a detailed physical 
          inspection was conducted of the subject premises during the 
          original MCI proceeding which disclosed that problems still existed 
          with the windows of ten apartments ( FF, 2B, 2D, 2F, 2T, 4A, 4M, 
          5A, 5C and 5N) despite the owner's assertion to the contrary.

          The Commissioner finds that the Rent Administrator did not abuse 
          his discretion by exempting the ten apartments which contained 
          defective windows. Moreover, the Commissioner notes that the 
          Administrator could have revoked the entire rent increase for the 
          window installation on the grounds that the improvement did not 
          inure to the benefit of all tenants in the building, but instead 
          chose to exclude the ten apartments from the rent increase.

          With regard to the procedure involved in conducting an inspection, 
          there is no agency policy requiring that owners or tenants be given 
          notice of impending inspections, the right to be present, or the 

          ADMIN. REVIEW DOCKET NO. HA-530009-RO

          right to comment on the resulting reports, nor does due  process 
          require such a policy. The record reveals that the owner was duly 
          notified of the tenants' complaints and was afforded ample 
          opportunity to respond thereto and to make the necessary repairs. 

          It was within the Administrator's proper scope of discretion and 
          authority to deem the record adequate to determine the tenants' 
          complaints based upon the written submission from both parties and 
          the inspection report.

          Based upon the entire evidence of record, the Commissioner is of 
          the opinion and finds that the Administrator did not abuse his 
          discretion in issuing the order appealed herein. 

          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.


                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner


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