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

          ------------------------------------X      S.J.R. NO.: 7247
          APPEAL OF ANDREW LAIOSA AND                DOCKET NO.: HC630174RT
          VARIOUS TENANTS OF                  :  
          3341-3345 RESERVOIR OVAL WEST              RENT ADMINISTRATOR'S
          BRONX, NEW YORK                            DOCKET NO.: FF6300460M
                                  PETITIONERS : 


          On March 11, 1993 the above named petitioner-tenants timely filed 
          a petition for administrative review (PAR) against an order issued 
          on February 10, 1993 by the Rent Administrator, 92-31 Union Hall 
          Street, Jamaica, New York, concerning the housing accommodations 
          known as 3341-3345 Reservoir Oval West, Bronx, New York, various 
          apartments wherein the Rent Administrator authorized major capital 
          improvements (MCIs) rent increases.

          Subsequent thereto, the owner filed a petition in the Supreme Court 
          pursuant to Article 78 of the Civil Practice Law and Rules 
          requesting that the Court direct the Division to expeditiously 
          determine the subject PAR.

          The Commissioner has reviewed all of the evidence of the record 
          relevant to the issues raised by this administrative appeal.

          The owner commenced this proceeding on June 12, 1991 by filing an 
          application for a rent increase based on the total claimed 
          installation cost of $361,582.00 for the following items: 
          boiler/burner, various exterior work (pointing, waterproofing, 
          parapet walls, and lintels), elevator upgrading, intercom, asbestos 
          removal and apartment windows.

          Three tenants of 3341 Reservoir Oval West, apartments 4-E, 6-E and 
          1-I responded to the owner's MCI application stating in substance 
          (Apt. 4-E) that he was not in occupancy during the period in which 
          the MCI work was performed; that the managing agent explained to 
          him that the initial lease (1990) would be higher to reflect the 
          MCI improvements; and that to pay the MCI increase would amount to 
          a double payment; (Apt. 6-E) the window leaks when it rains; the 
          elevator call button does not indicate the upward or downward 
          direction; the garbage must be brought down to the basement and the 
          peephole in the door is broken; (Apt. 1-I) questions the costs of 
          the boiler/burner and the exterior work as excessive; and claims 


          ADMIN. REVIEW DOCKET NO.: HC630174RT (SJR 7247)

          that among the plumbing problems in the building there is a lack of 
          hot water in the mornings.  The Tenants Association president, 
          (Andrew Laiosa) also responded requesting an extension of time to 
          file a response to the owner's application.

          The owner responded to the tenants' claims stating in substance 
          that as to the tenant in apartment 4-E that no MCI rent increase 
          will be imposed; that as to the tenant in 6-E that all tenants 
          deposit their garbage in the basement; that the elevator call 
          button only indicates if the elevator is in use and not in the 
          upward or downward direction it is travelling; and that 
          arrangements had been made for repairs of the window leak and the 
          peephole.  Subsequently a signed statement by the tenant 
          acknowledging the repairs of the window and peephole was submitted 
          to DHCR by the owner.  With regard to apartment 1-I the owner 
          characterized the claims as "unsubstantiated and not true".  

          On February 10, 1993 the Rent Administrator issued the order here 
          under review granting the full claimed cost for the various 
          exterior work, elevator upgrading and intercom; substantially 
          granting the claimed cost for the boiler/burner and excluding the 
          unsubstantiated portion; granting the amount for the asbestos 
          removal related to the boiler/burner installation; and excluding 
          $450 (for window guards, not an MCI) of the claimed cost for the 
          window installations.  Various notations were included in the 
          order, i.e. the breakdown submitted by the owner for the various 
          exterior work performed $54,000 to include pointing, waterproofing, 
          parapet walls and lintel replacement, and $106,000 to include new 
          roof, skylights and chimneys; and the number of windows were 
          amended from 450 windows to 468 windows.  Further, it was noted 
          that the tenant in Apt. 4-E was exempt from the MCI rent increase 
          and that all window problems in Apt. 6-E were corrected.

          In their petition the president of the Tenants' Association joined 
          by thirty-four tenants (whose signatures were attached to the PAR) 
          state in substance that the new boiler is unreliable and fails to 
          provide heat and hot water; the tenants in Apts. 3-H, 3-I, 5-E and 
          6-E are experiencing leaks in the ceiling and walls, leaks have 
          also occurred in the hallways as evidenced by water stains; the 
          skylights were not replaced; the exterior work was substantially 
          cosmetic in nature and the high cost is not reflective of the work 
          performed; the elevator service is unreliable; the intercom fails 
          to buzz open the lobby door; and tenants in Apts.  1-E, 2-C, 2-I, 
          3-H, 4-C, 5-E, 5-F, 5-G and 5-H report various windows defects.

          In response to the tenants' petition the new owner (Oval West 
          Corp.) represented by the firm of Rosenberg and Estis, P.C. offered 
          a chronology of the former owner's (Capital Holding Co.,) MCI 
          application stating that the tenants' PAR is without merit and 
          should be dismissed but more specifically that all but three 
          tenants (Apts. 4-E, 6-E and 1-I) whose claims were answered and 
          rectified, failed to raise any objections to the owner's 
          application; that the petitioner-tenants had been afforded an 
          opportunity to object to the owner's MCI application below and are 
          now precluded from raising new issues on appeal; that in any event

          ADMIN. REVIEW DOCKET NO.: HC630174RT (SJR 7247)

          upon learning of the new window complaints in the tenants' PAR for 
          Apts. 1-E, 2-C, 2-I, 3-H, 4-C, 5-E, 5-F, 5-G and 5-H, the owner 
          attempted to address them; that the current owner's records 
          indicate the tenants in Apts. 6-E, 3-I and 4-C had no window 
          problems; that the tenant in Apt. 5-G (the president of the Tenants 
          Association) refused the former owner access although later agreed 
          to schedule two appointments with the new owner; that no heat or 
          hot water complaints were received by the owner since the new 
          installation, except for interruptions for normal maintenance; that 
          the roof leak did not result from any of the exterior MCI work but 
          from a door saddle by the bulkhead which was corrected by the 
          former owner by installing a door sweep; that there is no truth to 
          the tenants' claim that skylights were not replaced as is evidenced 
          by copy of the submitted invoice; that no elevator complaints 
          described in the tenants' PAR were made known to the owner; and 
          that the owner cannot be penalized for the tenants' failure to 
          grant access or for window complaints made three years (1993) after 
          the window installation (1990).

          The Tenants Association responded to the owner's answer by 
          amplifying their claims as follows: the claims in the tenants' PAR 
          are all newly discovered conditions which have developed over a 
          period of time and should be considered by DHCR; the Office of 
          Housing Preservation and Development inspection was inadequate and 
          incomplete and a reinspection was necessary with advance notice to 
          the tenants as not all tenants' complaints were addressed; that 
          although the window complaints were first reported to DHCR in the 
          tenants' PAR, many complaints had been passed on to the 
          superintendent with no corrective action taken; the elevator 
          service continues to be unreliable and the notation on the elevator 
          company's service invoice falls short of conforming to acceptable 
          standards with its very limiting statement concerning the "limited 
          capabilities of the equipment (elevator)".  

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

          Rent increases for major capital improvements are authorized by 
          Section 2202.4 of the Rent and Eviction Regulations 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 generally be 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.

          The evidence of record in the instant case indicates that the owner 
          substantiated its MCI application for the improvements contained 
          therein by submitting to the Administrator documentation in support 


          ADMIN. REVIEW DOCKET NO.: HC630174RT (SJR 7247)

          of the application, including the contractors' certifications, 
          copies of contracts, and cancelled checks confirming the cost of 
          the respective items as well as governmental sign-offs for those 
          installations requiring same.

          Moreover, the record reveals that only three tenants (Apts. 4-E, 
          6-E and 1-I) responded below to the owner's MCI application.  The 
          owner addressed the complaints of Apts. 4-E and 6-E and submitted 
          the tenants' signed acknowledgments indicating that the repairs had 
          been made.  Although the owner was unable to personalize the 
          response to the third tenant's (Apt. 1-I) complaint, involving 
          plumbing problems, it rejected the complaint as unsubstantiated and 

          The petitoner-tenants seeking for the first time to raise MCI 
          related claims are precluded from so doing at this appeal level 
          especially in view of the fact that twenty months, during which 
          complaints could have been registered, passed between the time that 
          the notice of owner's MCI application was mailed (June 20, 1991) to 
          the tenants and the order was issued (February 10, 1993).

          The Commissioner notes that although the Tenants Association 
          president requested below an extension of time to respond to the 
          owner's MCI application, no such response was ever received from 
          the Association.

          The Commissioner further notes that there is no prohibition against 
          the granting of an MCI increase where the installation was paid by 
          a prior owner, but collected by a new or current owner.  

          A review of Division records fails to disclose any heat and hot 
          water complaints made by the tenants of the subject premises.

          The determination herein is made without prejudice to the rights of 
          the tenants to file service complaints if the facts so warrant.

          Based upon the entire record, the Commissioner finds 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 and the Rent and Eviction Regulations 
          for New York City, it is

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


                                               JOSEPH A. D'AGOSTA
                                               Deputy Commissioner

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