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

      ------------------------------------X  S.J.R. NO.: 6559
      APPEAL OF                              DOCKET NO. UPON REMAND:HA 630007-RP
                                          :                (EJ 630143-RO)
         HOXHA ASSOCIATES                    
                                             RENT ADMINISTRATOR'S
                            PETITIONER    :  DOCKET NO.: DL 630192-OM

                            REVIEW AFTER RECONSIDERATION

      On October 10, 1990, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order of the Rent Administrator (Gertz 
      Plaza) issued September 11, 1990.  The order concerned housing 
      accommodations located at 221 Bathgate Avenue, Bronx, New York.  The Rent 
      Administrator granted, in part, the owner's application for a rent increase 
      based on the installation of various major capital improvements.

      On July 2, 1992 the Commissioner issued an Order and Opinion denying the 
      owner's petition for administrative review.

      Thereafter the owner commenced a proceeding in the Supreme Court pursuant 
      to Article 78 of the Civil Practice Law and Rules, requesting that the 
      Commissioner's order be annulled.  This resulted in an order of the court 
      remitting this proceeding to the Division for further consideration.

      The owner commenced the instant proceeding on March 23, 1989 by initially 
      filing an application for a rent increase based on the installation of a 
      boiler/burner, windows, intercom, fuel computer, entrance doors, concrete 
      sidewalk and pointing.

      The contractor's certification submitted in connection with the 
      boiler/burner stated that the installation was completed on February 11, 
      1987. Various tenants objected to the requested increase but raised no 
      specific complaints pertaining to the installations.  The owner 
      subsequently withdrew the request for a rent increase for the pointing and 
      the entrance doors.

      The Administrator's order, appealed herein, authorized major capital 
      improvement rent increases for the building-wide installation of windows, 
      an intercom system, and boiler/burner.  As to the latter item, the increase 
      was limited only to rent controlled apartments.  Disallowed by the 
      Administrator was the claimed costs of a sidewalk (not here at issue) and 
      a fuel computer as both not constituting major capital improvements.  An 
      increase for the boiler/burner was denied as to rent stabilized apartments 
      since the application was filed more than two years after the completion of 
      the installation.


          ADMINI. REVIEW DOCKET NO.: SJR 6559, HA 630007-RP

      In this petition the owner contends, in substance, that the completion date 
      of the boiler/burner installation was actually August 27, 1987, the date 
      the New York City Department of Buildings inspected and approved the 
      installation; that the completion date of February 11, 1987 listed on the 
      contractor's certification was the date the final check was issued to the 
      contractor; and that for purposes of the J-51 Tax Abatement program, HPD 
      uses Building Department documentation as evidence of the completion date.  
      Submitted with the petition is an excerpt from the J-51 Rules and 

      The petitioner further contends, in substance, that the fuel computer 
      should be eligible for a major capital improvement rent increase since the 
      function of the computer is to maintain the building's temperature and 
      reduce fuel costs; and that a fuel computer is considered a capital 
      improvement under the J-51 Tax Abatement program.

      Section 2522.4(a)(8) of the Rent Stabilization Code precludes a rent 
      increase for a major capital improvement when the application is filed more 
      than two years after the completion of the installation, not the date of 
      issuance of any required governmental certificate.  (Accord: EG 430076-RO; 
      EL 210007-RT and EL 630365-RO). In the last cited proceeding a window 
      installation was considered complete when the old windows were actually 
      replaced and not when all adjustments or defects were attended to. While 
      the applicable section of the Code envisions governmental sign-offs be 
      submitted with the application to be filed within two years of the physical 
      completion of the work, the Code provides for a reasonable extension of 
      time where the applicant can demonstrate a delay, beyond the applicant's 
      control, in obtaining such approvals for which the applicant has promptly 
      applied within such two year period. The Code does not create a new two 
      year filing period dating from the time governmental approval is actually 

      Turning to the case at hand, the Commissioner notes that the heating 
      contractor's invoice specifies payment terms to be $10,000.00 upon signing 
      of the contract, $10,000.00 upon 50% completion and $4,500.00 upon 
      completion of the job with the balance to be paid in six monthly 
      installments of $1,300.00 each.  The record shows that the contractor was 
      paid $4,500.00 on October 10, 1986, upon the completion of the job.  Even 
      if the last payment to the contractor, dated February 11, 1987, were to be 
      considered evidence of completion (which it is not), the Administrator 
      properly disallowed a rent increase for the boiler/burner as to stabilized 
      apartments based on the fact that the application (filed March 23, 1989) 
      was still not filed within two years of completion of the installation.

      The owner has not established that the two year period should be extended 
      due to delay beyond the owner's control in obtaining governmental 
      approvals.  The final government certificate (issued by the Bureau of 
      Electrical Control) submitted in the instant case was issued on October 4, 
      1988 but the owner failed to file its MCI application until March 23, 1989, 
      more than two years after the October, 1986 completion as well as the 
      completion date listed in the application, and more than 5 1/2 months after 
      the final governmental approval was obtained.  Having not even filed its 
      application within a reasonable time of receiving the final governmental


          ADMINI. REVIEW DOCKET NO.: SJR 6559, HA 630007-RP

      sign-off, the owner has clearly failed to meet the two year filing 
      requirement of the Code.

      With respect to the heat timer, it is the well established that said item 
      is but an optional adjustment to a heating system and in and of itself does 
      not constitute a major capital improvement. However, Section 2522.4(a)(ii) 
      of the Code and Section 2202.4(e) of the Rent and Eviction Regulations 
      (formerly Section 33.1e) permits a rent increase for other work performed 
      in conjunction with a qualifying major capital improvement and the Division 
      has allowed an increase for a heat timer installed in conjunction with a 
      new heating system. Section 2522.4(a)(ii) of the Code and Operational 
      Bulletin 84-4 (November 13, 1984), limits the application of "concurrent 
      improvements" to costs incurred within a reasonable period of time of a 
      qualifying major capital improvement and only if it directly relates 

      Regarding the owner's reference to J-51 tax abatement benefits, the 
      Commissioner notes that the J-51 program is governed by an independent body 
      of law and regulations.  Thus the ruling therein is not determinative in 
      this proceeding which requires an independent determination as to whether 
      the heat timer installation qualifies as a major capital improvement within 
      the purview of the specified Rent Laws and Regulations applicable to this 

      The record in this case discloses that the heating system was completed in 
      October 1986 and it was not until February 1987 that the owner received a 
      proposal from the contractor suggesting the installation of a heat timer.  
      It is clear that this item (completed in May 1987) was installed as an 
      after-thought rather than in conjunction with and within a reasonable 
      period of time of the new heating system.  Furthermore, as to rent 
      stabilized apartments, a rent increase is not warranted for this item since 
      the underlying heating system was found not to qualify for a rent increase.  
      With respect to rent controlled apartments, the record shows that the owner 
      has failed to establish the additional requirement that the cost of the 
      heat timer equals 10% of the operating and maintenance expenses for the 
      building in accordance with Advisory Sheet 1-33.1e and Operational Bulletin 

      Based upon the entire record, the Commissioner finds that the 
      Administrator's order is correct and should be affirmed.

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

      ORDERED, that this petition be, and the same hereby is denied; and that the 
      order of the rent administrator be, and the same hereby is affirmed.

                                           JOSEPH A. D'AGOSTA
                                           Deputy Commissioner   


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