DOC. NO.: BI 430175-RO
                                 STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

         APPEAL OF                               DOCKET NO. BI 430175-RO
                         MST ASSOCIATES,        :   DISTRICT RENT ORDER 
                               PETITIONER    :   DOCKET NO. LS 000482-OM


         On September 17, 1987 the above-named petitioner-owner filed a 
         Petition for Administrative Review against an order issued on August 
         17, 1987 by the Rent Administrator, 92-31 Union Hall Street, Jamaica, 
         New York concerning housing accommodations known as 262 West 24th 
         Street, New York, New York, various apartments, wherein the 
         Administrator granted in part the application and authorized a major 
         capital improvement rent increase for both the controlled and 
         stabilized apartments (25) in the subject premises.

         The instant matter arises from an application filed on March 14, 1985 
         by a former owner of the subject premises, Kindred Associates, (by 
         Jerry Nigdol) predicated upon, among other items, the installation of 
         a new gas fired boiler/burner at a claimed cost of $25,000.00 and 
         adequate replumbing at a claimed cost of $37,500.00.  Submitted 
         therewith were copies of a contractor's certification wherein the 
         owner stated that the principals of the plumbing and heating 
         contractor, Alert Gas Service, Inc., and the owner of the subject 
         premises were one and the same.  The contract and contractor's 
         certification are signed by Max Nigdol on behalf of Alert Gas Service 
         as is a check issued by Kindred Associates made payable to Alert Gas 
         Service for $50,276.78, which check is signed by Max Nigdol and 
         endorsed by the same individual.

         On January 23, 1986 the current owner of the subject premises (the 
         petitioner herein) certified to the service of the application on the 
         tenants.  Various tenants responded to the application urging the 
         denial thereof contending, among other things, that the claimed costs 
         are excessive.

         DOC. NO.: BI 430175-RO

         By notice dated March 24, 1987 the owner herein was advised that the 
         check payable to Alert Gas Service was inadequate to substantiate the 
         cost of the plumbing and heating installations due to the relationship 
         between the former owner and the contractor who performed the work.  
         The petitioner herein was requested to submit, among other things, a 
         copy of the J-51 certification for the work in question.

         By letters dated April 28, and May 18, 1987 the current owner (who 
         purchased the property a month after the application was filed) 
         requested an extension until June 24, 1987 to submit the requested 
         documentation.  By letter dated June 24, 1987 the owner, via its 
         attorney, responded to various inquiries but failed to submit the 
         requested J-51 certificate of eligibility.  No further response having 
         been received from the owner and since a mandamus proceeding was 
         pending, the Administrator, on August 17, 1987, issued the order 
         appealed herein granting in part the application but denying such 
         portion thereof as pertained to the plumbing and heating installations 
         on grounds that the claimed cost ($62,500.00) was not adequately 

         In this petition for administrative review the owner contends, in 
         substance, that as a new owner it should have been afforded sufficient 
         time to obtain the requested documentation from the former owner.  
         Thereafter, the owner, via its attorney, stated that it had obtained 
         written confirmation from the contractor (Albert Gas Service) to the 
         effect that it had been paid in full for the work in question.  Said 
         letter was not submitted by the owner.

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

         Where, as in the instant case, the contractor who did the work has a 
         substantial ownership interest in the subject property, the courts 
         have recognized the obligation of the Administrator to most carefully 
         scrutinize the alleged costs.  (That is not to say that careful review 
         is not required in a normal case).  The petitioner herein, having 
         adopted the application of its predecessor in interest, stands in the 
         shoes of the prior owner with respect to the degree of proof required 
         of it.  In view of the identity of interest between the former owner 
         and the contractor who performed the work and the failure of the owner 
         herein to produce adequate further substantiation of the cost of the 
         plumbing and heating installation in the proceeding below (nor has it 
         done so on appeal), although afforded full opportunity to do so, the 
         Commissioner is of the opinion and finds that such portion of the 
         application as pertains thereto was properly denied by the 

         DOC. NO.: BI 430175-RO

         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 this petition be, and the same hereby is denied; and 
         that the order of the Rent Administrator be, and the same hereby is 


                                            ELLIOT SANDER
                                            Deputy Commissioner


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