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

      APPEALS OF                             DOCKET NOS.: 
                                          :  HG410156RT/HG410160RT/
      VARIOUS TENANTS OF 305/315 EAST        HH410002RT/HH410091RT/
      86TH STREET, NEW YORK, NY              HH410102RT/HH410111RT/
                            PETITIONERS   :  HH410112RT/HH410114RT
                                             RENT ADMINISTRATOR'S
                                             DOCKET NO.: FD410089OM


      Various tenants and the Yorkshire Towers Tenants Association timely filed 
      petitions for Administrative Review (PARs) against an order issued on July 
      12, 1993 by the Rent Administrator (Gertz Plaza) concerning the housing 
      accommodations known as 305/315 East 86th Street, New York, New York, 
      various apartments, wherein the Rent Administrator determined that the 
      owner was entitled to a rent increase based on a major capital improvement 

      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.

      The owner commenced this proceeding on April 22, 1991 by filing an 
      application for  an MCI rent increase predicated on the building-wide 
      installation of new apartment windows at the subject premises.  In response 
      to the owner's application, several tenants and the Tenants Association 
      filed answers, contending in substance, that there are defects in their 
      newly installed windows.  Based on these allegations, a physical inspection 
      was conducted by the Division on March 22, 1993 and said inspection 
      revealed that tenants in 27 out of a total of 693 apartments in the subject 
      building had valid complaints regarding their windows.

      Thereafter, the Administrator issued the order appealed herein, granting 
      the owner's application and authorizing a rent increase for the rent 
      stabilized apartments in the subject premises.  However, the owner was 
      barred from collecting the increase from tenants in the 27 apartments until 
      repairs have been completed.  Said order contains the notation that the 
      owner amended the room count from 2205 rooms to 2141 rooms and that this 
      figure was further reduced by 16 rooms to adjust the 
      professional/commercial number of rooms.

      In their petitions for administrative review, the tenants request reversal 
      or modification of the Administrator's order and contend, in substance, 
      that it still difficult to close the windows in his apartment (Apt. 4GE); 
      that the new windows are drafty (Apts. 4GW & 5GW); that the new windows are 
      difficult to open and that his apartment should have been included with 
      those which are not subject to the rent increase until the defective 
      condition has been corrected (Apt.5PW); that although some repairs have 


          ADMIN. REVIEW DOCKET NO.: HG410156RT, et al.
      been done, the windows are still drafty (Apt.  9GE); that the owner 
      installed ill-fitting windows (Apt. 14TW); that his apartment should have 
      been inspected and included with those listed in the Administrator's order 
      as having valid window complaints and that the Division found his  
      complaint regarding the new windows to be valid as evidenced by a rent 
      reduction order (Docket No. GA410380S) issued on May 18, 1993 (Apt. 19LW); 
      that the Administrator's order must be reversed since the new windows do 
      not inure to the benefit of all tenants; that the Administrator's order 
      acknowledges that there are 27 tenants who have not benefitted from the new 
      windows; that 64 tenants complained about the windows but only 27 tenants 
      were temporarily exempt from the increase; that the Administrator's order 
      does not state whether all 64 apartments were inspected nor does the order 
      explain what constituted a valid complaint; that an engineering survey and 
      physical inspection conducted in February 1992 by a professional engineer 
      retained by the Yorkshire Tower Tenants' Association found deficiencies in 
      the new windows; that there are approximately 560 windows in the terrace 
      doors that were not replaced representing 12% of the 4,252 windows which 
      were replaced in the building; that the improvement is not in conformance 
      with RSC 2522.4(a)(2)(i)(c) since the owner did not replace all similar 
      components in the building nor did the owner demonstrate that these similar 
      components did not require improvement; that RSC 2522.4(a(2)(i)(a) requires 
      that in order for an improvement to qualify for an increase in rent, such 
      improvement must be deemed depreciable under the Internal Revenue Code, 
      other than for ordinary repairs and that the file which was made available 
      by the owner does not include any proof that the new windows are 
      depreciable under the IRC; that the Administrator computed the rent 
      increase based upon a 60 month amortization period but this should be 
      amended to an 84 month amortization; that in the instant case, the 
      Administrator completely ignores the tenants' allegations that the owner is 
      not maintaining services and that there exist immediately hazardous 
      conditions in the building; that the owner provides no justification for 
      reducing the room count of the subject building from 2205 rooms to 2125 
      rooms; that upon information and belief the original room count was 
      correct; that the reduction of 16 rooms for adjustment of professional and 
      commercial number of rooms is incorrect; that this reduction in the number 
      of professional/commercial rooms was not accompanied by the proper 
      determination of monthly rentals; and that the combination of these factors 
      resulted in a higher per room per month rent increase (Tenants 

      After a careful consideration of the entire evidence of record, the 
      Commissioner is of the opinion that these administrative appeals should be 

      The Commissioner notes that none of the tenants who filed individual 
      petitions herein with the exception of the tenant in Apt. 5PW raised 
      objections to the quality or adequacy of the installation while this 
      proceeding was before the Rent Administrator although afforded the 
      opportunity to do so.  Accordingly, pursuant to Section 2529.6 of the Rent 
      Stabilization Code, the tenants' allegations may not be considered now when 
      offered for the first time on administrative appeal.  However the owner is 
      hereby directed to correct any defective conditions with the windows 
      brought to its attention in writing, if it has not already done so and the 


          ADMIN. REVIEW DOCKET NO.: HG410156RT, et al.
      determination herein is without prejudice to the rights of the tenants 
      filing appropriate applications with the Division for a rent reduction 
      based upon a decrease in services, if the facts so warrant.

      Regarding the contention of the tenant in Apt. 5PW, the record discloses 
      that although the tenant complained while the proceeding was before the 
      Administrator, said complaint stated that the new windows are harder to 
      open than the old ones and that they are aesthetically inferior.  The 
      Commissioner finds that such complaint was not specific enough to warrant 
      an inspection nor does it warrant modification of the Administrator's 
      order.  However, the tenant is advised to notify the owner in writing of 
      any problems with the windows.

      A review of the Division's records discloses that there are individual rent 
      reduction orders still in effect for various apartments.  The Commissioner 
      notes that as provided for in the Administrator's order (effective date 
      July 1, 1991) the increase granted therein is not collectible from such 
      apartments for the period during which the rent reduction order is in 
      effect.  However the portion of the MCI order starting before the effective 
      dates of the rent reduction orders is collectible by the owner.  When a 
      rent restoration order has been issued, then the MCI rent increase will be 
      collectible only from the effective date of the rent restoration.

      Concerning the tenants' contention that 64 tenants complained about the 
      windows but only 27 tenants were exempt from the increase, the Commissioner 
      notes that of those tenants some failed to raise specific complaints 
      regarding the functioning of the windows while others failed to provide 
      access to the Division's inspectorial personnel.

      With respect to the tenants' contention that the Administrator's order must 
      be reversed since the new windows do not inure to the benefit of all 
      tenants and that said order acknowledges that there are 27 tenants who have 
      not benefitted from the new windows, the Commissioner notes that the 
      tenants do not dispute that there was a building-wide installation of new 
      apartment windows; that said installation met the Division's criteria to 
      qualify for a rent increase; that the fact that a limited number of over 
      4,000 windows in a small percentage of apartments (27 out of close to 700 
      units) need adjustment/repairs does not warrant the reversal of the 
      Administrator's order; and that under the circumstances the Administrator 
      did not abuse his discretion in temporarily suspending the increase as to 
      the units specified until appropriate repairs were accomplished

      As to the tenants' contentions that the owner did not replace all similar 
      components in the building since there are approximately 560 windows in the 
      terrace doors which were not replaced and that the owner did not provide 
      proof that the new windows are depreciable under the Internal Revenue Code, 
      it is the established position of the Division that the building-wide 
      installation of apartment windows to replace windows which are 25 or more 
      years old (as is the case herein) constitutes a major capital improvement 
      for which a rent increase may be warranted.  An owner is not required to 
      replace window panes in terrace doors (due to the separate and distinct 
      nature thereof) in order to qualify for a rent increase for the building- 
      wide installation of new apartment windows.  The division has ruled, 
      however, that if such terrace doors are replaced with the inclusion of 
      thermal glass, an additional rent increase therefore would be warranted 
      only from those apartments so equipped.  


          ADMIN. REVIEW DOCKET NO.: HG410156RT, et al.
      Turning to the tenants' contention that the Administrator incorrectly 
      computed the rent increase based upon a 60 month amortization instead of an 
      84 month amortization, the Commissioner finds that the Administrator did in 
      fact correctly compute the rent increase since the window installation 
      commenced on October 30, 1989 and the 84 month amortization applies where 
      the physical work commenced or legally binding signed contracts were 
      entered into on or after June 29, 1990.

      Regarding the tenants' contention that the owner is not maintaining 
      services and that there are immediately hazardous conditions in the 
      building, a review of Division's records discloses that said violations 
      (42) do not reflect the existence of any immediately hazardous conditions.  
      In addition, there are no rent reduction orders based on the owner's 
      failure to maintain services of a building-wide nature outstanding against 
      the subject premises.

      Concerning the tenants' contention regarding the room count, the 
      Commissioner notes that pursuant to a request via the Freedom of 
      Information Act, the tenants counsel reviewed the entire file prior to the 
      Administrator's order being issued and did not submit any objections 
      relating to the amended room count; that the per room increase was computed 
      on an approved cost for the windows which was $12,484.93 less than the 
      amount claimed by the owner in its application to reflect the commercial 
      tenants share of such cost; and that without the reduction in room count to 
      reflect commercial units the increase for stabilized apartments would have 
      been computed on a higher cost.  The owner may not charge the tenants based 
      on a greater number of legal rooms for MCI purposes and any adverse 
      determination stemming from a miscount in rooms which arises after an MCI 
      order is issued becomes the responsibility of the owner.  This 
      determination is without prejudice to tenants' right to file individual 
      complaints of rent overcharge, if the facts so warrant.

      THEREFORE, in accordance with the Rent Stabilization Law and Code, it is 

      ORDERED, that these petitions be, and the same hereby are denied; and that 
      the Rent Administrator's order be, and the same hereby is affirmed.


                                           JOSEPH A. D'AGOSTA
                                           Deputy Commissioner


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