OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA

                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          ------------------------------------X   ADMINISTRATIVE REVIEW
          APPEALS OF                                           HK230115RT
          Various Tenants of                                   HK230136RT
          706 Eastern Parkway                                  HK230137RT
          Brooklyn, New York                                   HK230138RT

                                                  RENT ADMINISTRATOR'S
                               PETITIONERS        DOCKET NO: GE230113OM


          On November 19, 1993 the above-named petitioner-tenants filed 
          administrative appeals against an order issued on October 15, 1993 
          by the Rent Administrator ( 92-31 Union Hall Street, Jamaica, New 
          York) concerning the housing accommodations known as 706 Eastern 
          Parkway, Brooklyn, New York, various apartments, wherein the 
          Administrator granted major capital improvement (MCI) rent 
          increases for the controlled and stabilized apartments in the 
          subject premises based on the installation of a new intercom, a new 
          roof, new apartment windows and new vestibule doors at the 

          At the outset the Commissioner notes, as confirmed by the record, 
          that the tenants of apartments 2B, 2C, 3D, 4C, 4I, 5A, 5B, 5C, 5G, 
          6B, 6C, 6D, 6G and 6I were served by the Administrator with notice 
          of the instant application and that they failed to respond thereto. 
          Fundamental principals of the administrative appeal process and 
          Section 2529.6 of the Rent Stabilization Code prohibit a party from 
          raising issues on appeal which were not raised below. 

          ADMIN REV. DOCKET NO. HK230103RT

          The tenants of said apartments could have raised the very issues 
          before the Rent Administrator which they now seek to raise for the 
          first time on appeal. Accordingly, the Commissioner is constrained 
          to foreclose consideration of these issues in this appeal 

          The owner commenced this proceeding on May 19, 1992 by  filing an 
          MCI rent increase application predicted on the installation of a 
          new roof, new vestibule doors, new apartment windows and a new 

          Five of the 52 affected tenants responded to the owner's 
          application. Of these five, only three ( apartments 3B, 5I and 6E) 
          raised complaints regarding the items installed by the owner. The 
          Administrator served copies of these complaints upon the owner who 
          submitted an answer advising, in substance, that minor repair work 
          had been performed and that installations were in "good working 
          condition." Copies of the owner's answer were served on these three 
          tenants on July 23, 1993, but they failed to respond.

          On October 15, 1993 the Administrator issued the order here under 
          review, finding that the installations qualified as  major capital 
          improvements and authorizing rent increases for the subject 

          Two of the tenants who raised complaints below (residing in 
          apartments 3B and 6E) filed petitions for administrative review in 
          which they repeated said complaints.

          In response the owner advised, in substance, that all of the 
          installations were working properly.

          After careful consideration, the Commissioner is of the opinion 
          that these petitions 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.


          ADMIN REV. DOCKET NO. HK230103RT

          The evidence of record in the instant case indicates that the owner 
          correctly complied with the application procedures for an MCI. The 
          owner substantiated its application in the proceeding below by 
          submitting to the Administrator the contractors' certifications, 
          contracts, proposals, invoices and cancelled checks for the work in 
          question. On the other hand, the tenants have not submitted any 
          evidence, either in the proceeding before the Administrator or on 
          appeal, to support any of their allegations and have not 
          established that the rent increase should be revoked.

          The Commissioner notes that various tenants asserts, in substance, 
          that their leases do not contain clauses authorizing the rent 
          increase. Pursuant to Section 2522.4 of the Code and as specified 
          in the Administrator's order, MCI rent increases are not 
          collectible during the term of the lease then in effect unless a 
          specific provision in the lease authorizes an increase during its 
          term. The tenants are advised to refer to their leases which were 
          not attached to the petitions and are not part of the record. This 
          order is being issued without prejudice to the tenants' right to 
          file individual complaints of rent overcharge, if the facts so 

          The Commissioner further notes that two of the petitoner-tenants, 
          according to the record, were not in occupancy at the time the 
          owner's application was filed. For the increase granted by this 
          Order to be collectible during the term of the current lease, a) 
          the lease must contain a provision authorizing the collection of an 
          increase pursuant to a DHCR Order; and b) where the application for 
          this increase was pending prior to the commencement date of a 
          vacancy lease, the increase granted in this order is collectible 
          only if such lease contains a specific provision regarding the 
          application pending before the Division of Housing and Community 
          Renewal, citing the Docket Number assigned, the basis for the 
          application, and that any increase granted pursuant to a DHCR order 
          would be effective during the term of the lease. In the absence of 
          same, the increase is not collectible until the expiration of the 
          lease term in effect at the time the order is issued.

          As to any apartment which was subject to Rent Control at the time 
          instant application was filed and which subsequently became subject 
          to Rent Stabilization jurisdiction, the Commissioner notes that 
          since the free market rent charged the first stabilized tenant 
          included any and all services then  being provided, and in the 
          absence of a fair market rent appeal, the rent increase provided 
          for in this order is not collectible from the first stabilized 
          tenant or any subsequent tenant of such apartment. 


          ADMIN  REV. DOCKET NO. HK230103RT

          Any tenant who took occupancy after the effective dates of the 
          increase is not obligated to pay any arrears for a period to the 
          date of occupancy.

          This order and opinion is issued without prejudice to the tenants' 
          right to file an appropriate complaint for a decrease in rent based 
          on a decrease in either building-wide or individual apartment 
          services, if the facts now so warrant.

          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 these petition be, and the same hereby are, 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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