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

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEALS OF                               HD430062RT/   HD430063RT/
                    VARIOUS TENANTS OF             HD430064RT/   HD430065RT/
                    26 EAST 63RD STREET            HD430066RT/   HD430076RT/
                    NEW YORK, NEW YORK             HD430078RT/   HD430082RT/
                                                   HD430084RT/   HD430088RT/

                                                   RENT ADMINISTRATOR'S
                                                   DOCKET NO.:  FG430040RK



          The above named petitioner-tenants timely filed petitions for 
          administrative review (PARs) against an order issued under Docket 
          No. FG430040RK on March 16,1993, by the Rent Administrator (Gertz 
          Plaza) concerning the housing accommodations known as 26 East 63rd 
          Street, New York, New York, various apartments. 

          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.

          On May 24, 1991, the Rent Administrator issued an order (Docket No. 
          DF430213OM) denying the owner's application for a major capital 
          improvement rent increase for elevator upgrading based on the 
          owner's failure to adequately respond to various notices.

          By letter dated June 26, 1991, the owner, a condominium 
          corporation, requested reconsideration of the Administrator's order 
          issued on May 24, 1991.  On August 1, 1991, the Administrator 
          reopened the said proceeding and afforded the tenants an 
          opportunity to comment thereupon.  In response to the reopened 
          proceeding, several tenants filed answers, contending, in 
          substance, that with the conversion of manned to self service 
          elevators, there is a loss of security; and that the savings in 
          labor costs should be passed on to the tenants since the positions 
          of seven elevator operators were 

          ADMIN. REVIEW DOCKET No. HC-430197-RT ET. AL.

          On March 16, 1993, the Rent Administrator issued an order (Docket 
          No. FG430040RK) revoking the denial order issued under Docket 
          No.DF430213OM and granted retroactive and prospective rent 
          increases for the controlled and stabilized units based on the 
          determination that the installation constitutes an MCI. Said order 
          contains a notation advising the owner that to reduced staffing or 
          any services, "prior approval of the Division is required."

          In their petitions for administrative review, the tenants request 
          reversal of the Administrator's order and contend, in substance, 
          that the order of the Rent Administrator is arbitrary and 
          capricious and erroneous as a matter of law; and that a conversion 
          from manned to automatic self service elevators is a decrease in 
          required services under the Rent Stabilization Law and Code and the 
          Rent and Eviction Regulations.  The tenant in Apt. 10A further 
          asserts that at the time the Emergency Tenant Protection Act of 
          1974 became effective, the landlord employed seven elevator 
          operators and also maintained the position of a doorman on a 24 
          hour basis; that after the elevator upgrading the positions of the 
          seven operators were eliminated and the doorman replaced by a 
          concierge on a 24 hour basis; that to the best of knowledge and 
          belief, the landlord has never applied for, or received permission 
          to discontinue the above mentioned services; and that on 
          reconsideration the Rent Administrator failed to address the issue 
          of whether the landlord eliminated a required service.

          After a careful consideration of the entire evidence of record, the 
          Commissioner is of the opinion that this petition should be 
          remanded to the Rent Administrator for further consideration as 
          provided hereinbelow.

          The Commissioner notes that a review of the Division records 
          discloses that the owner did not file requisite application with 
          the Division for permission to decrease or modify services as 
          required by Sections 2522.4(d) and (e) of the Code and Section 
          2202.21 of the Rent Regulations.  The record further supports the 
          tenants' allegation that the building's labor force was reduced as 
          a result of the conversation from manned to automatic elevator 
          operation.   It would be inconsistent with the Rent Laws, Code and 
          Regulations to sanction a rent increase where the actions of the 
          owner resulted in the removal of a required service without prior 
          agency approval. 


          ADMIN. REVIEW DOCKET NO. HC-430197-RT ET. AL.

          In this regard the Division has held that such conversion, which 
          does not result in a loss of vertical transportation, would be 
          approved on condition the owner provides adequate substitute 
          building security and other services; and that where there has been 
          a substantial savings to the owner by virtue of reduced payroll 
          costs, such savings be passed on to the tenants. In view of the 
          foregoing, the Commissioner is of the opinion and finds that the 
          major capital improvement rent increase granted under Docket No. 
          FG430040RK should be suspended, retroactive to the effective dates 
          stated in said order, and that this proceeding should be remanded 
          to the Administrator to be held in abeyance, in accordance 

          This determination is issued without prejudice to the owner filing 
          an appropriate application with the Division for permission to 
          modify or substitute services.  Upon the filing of such application 
          and upon the approval thereof, on such conditions found to be 
          warranted, the Rent Administrator shall give appropriate 
          consideration to the owner's MCI application and the appropriate 
          effective date any possible rent increase thereunder.
          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          and the Rent and Eviction Regulations for New York City, it is

          ORDERED, that these petitions be, and the same hereby are, granted 
          to the extent of remanding this proceeding to the Rent 
          Administrator for further processing in accordance with this order 
          and opinion; and that the major capital improvement rent increase 
          granted under Docket No. FG430040RK be and the same hereby is 
          suspended, from the inception thereof; and it is further 

          ORDERED, that the owner refund to the tenants any excess rent 
          collected as a result of this order within 30 days from the date of 
          issuance hereof.    


                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner



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