STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: BF430191RO
APPEAL OF
MICHAEL FALCO,
RENT ADMINISTRATOR'S
DOCKET NO.: QCS000351OM
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On June 5, 1987, the above-named petitioner-owner timely filed a
petition for administrative review (PAR) against an order issued on
May 4, 1987 by a Rent Administrator (Gertz Plaza) concerning the
housing accommodations known as 104-50 102nd Street, Ozone Park,
New York, various apartments, wherein the Rent Administrator
partially denied owner's application for a rent increase based upon
the installation of a major capital improvement (MCI) due to the
owner's failure to substantiate fully the amount paid for the
installations.
The Commissioner has reviewed all of the evidence in the record and
has carefully considered that portion of the record relevant to the
issue raised by this administrative appeal.
The owner commenced this proceeding on December 5, 1984 by
initially filing an application for a rent increase based on the
installation of the following items at a total cost of $11,950.00:
Pointing/Waterproofing and adequate plumbing.
Two tenants objected to the owner's MCI application each alleging
respectively and in substance, that her apartment walls were
damaged by water leaks, and that the plumbing work in his apartment
consisted of the installation of an unnecessary kitchen pipe.
The owner responded to the complaint regarding water damage to
walls by submitting a signed statement from the tenant indicating
that the condition was remedied.
On May 4, 1987, the Rent Administrator issued the order here under
review, finding that the installations qualified as an MCI and
granting, in part, the owner's application. Disallowed by the
Administrator were the claimed costs of $3,850.00 for pointing and
waterproofing, and $4,100.00 for adequate plumbing work upon a
finding that the owner did not substantiate alleged cash payments
made to the contractors.
ADMIN. REVIEW DOCKET NO. BF-430191-RO
In his petition, the owner contends, in substance, that the
Administrator did not consider documentation of proof of payment
submitted by the owner in support of his application; or payments
made by the owner for a hot water heater and associated parts and
wiring.
After a careful consideration of the entire record, the
Commissioner is of the opinion that this petition should be denied.
DHCR Policy Statement 90-10 delineates the methods for confirming
costs on MCI applications. Any claimed MCI cost should be
documented by at least one of the following: a cancelled check
dated contemporaneous with the completion of the work; an invoice
receipt marked "paid in full" dated contemporaneous with completion
of work; a signed contract agreement; or a contractor's affidavit
indicating that the installation was completed and paid in full.
The Policy Statement also states that where an identity of interest
between the contractor and the building owner is found, additional
proof may be necessary to substantiate payment costs.
As for the claimed cash payment of $3,850.00 for the
waterproofing/pointing work, the owner submitted the following
documents: (1) a letter from the contractor to the owner dated
September 10, 1984 that describes the work performed and its cost,
stamped PAID, and with the hand written notations "in full" and the
date- "9/18/84"; (2) a letter from the contractor to the owner
dated August 22, 1985 that describes the work, costs, and certifies
that the contractor received two checks of $1,000.00 each and an
additional balance of $3,850.00 in cash, stamped "PAID" with the
hand written notations "Paid in full 9/18/84" and "The above stated
work was done in September 10, 1984", which was notarized on
September 7, 1985; and (3) an affidavit dated September 27, 1986
from the contractor that describes the work performed and the cost.
The Commissioner finds that the two letters from the contractor do
not serve as "invoice receipts marked paid in full" and therefore,
are not adequate documentation of the claimed cash payment. The
letter dated September 10, 1984 does not indicate who stamped PAID
or wrote "in full" on September 18, 1984. It is further noted that
the "PAID" stamp from the two different contractors are identical.
The letter dated August 22, 1985 was not written contemporaneous
with the completion of the work and is therefore not adequate
documentation of cash payment. Lastly, the 1986 form affidavit
from the contractor did not indicate the method and dates of
payment or that the installation was paid in full.
The Commissioner finds that the owner's documentation of a cash
payment of $3,850.00 for pointing/waterproofing was not properly
substantiated and does not meet the requirements of Policy
Statement 90-10.
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ADMIN. REVIEW DOCKET NO. BF-430191-RO
As for the claimed cash payment of $4,100.00 for adequate plumbing
work, the owner submitted the following: (1) a letter from the
contractor dated October 29, 1984 that describes the work performed
and the cost, stamped "PAID" with a hand written notation "Check
$2,000, Cash $4,100" signed by the president of the corporation,
Michael Falco (who is also the owner of the building), and
notarized August 5, 1985; and (2) an invoice dated September 19,
1984 from the contractor describing the work and the cost.
The Commissioner similarly finds that this documentation does not
substantiate the owner's costs and payment as set forth in Policy
Statement 90-10. The acknowledged relationship between owner and
contracting company, i.e. President, requires more proof of cash
payment than a written notation by the owner that he paid $4,100.00
is in cash to said contracting company.
As for the cost and payments claimed for the installation of a hot
water heater and associated parts and wiring, the Commissioner
notes that the owner did not include this installation in his
original application, and that therefore, the costs of the
installation cannot be considered for the first time on appeal as
this is not a de novo proceeding.
The Commissioner finds that the Rent Administrator correctly
disallowed cash payments that were not properly substantiated
pursuant to Policy Statement 90-10.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code and the Rent and Eviction Regulations
for New York City, it is
ORDERED, that the owner's petition be, and the same hereby is,
denied; that the Administrator's order be, and the same hereby is,
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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