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

     APPEAL OF                              DOCKET NO.: BD 710527-RO
                                            RENT ADMINISTRATOR'S
       ROCKAWAY ONE CO.,                    DOCKET NO.: QS 000564-OM
                           PETITIONER    : 


     On April 22, 1987 the above-named petitioner-owner filed  a  petition  for
     Administrative Review against an order issued on March  20,  1987  by  the
     Rent Administrator, 92-31 Union Hall Street, Jamaica, New York  concerning
     housing accommodations known  as  20-02,20-04,20-06,20-08,20-10,  &  20-12
     Seagirt Boulevard, Seagirt, New  York,  Various  Apartments,  wherein  the
     Administrator authorized a major capital improvement rent increase for the 
     installation of a new boiler/burner and hot water tank which services  the
     subject six buildings.  Disallowed by the Rent Administrator were  claimed
     expenditures for "Attorney and contractor's" fee  ($7,816.66)  and  boiler
     burner installation supplies ($14,170.26)  as  not  having  been  properly

     In  this  petition  for  administrative  review  the  owner  contends,  in
     substance, that the fee paid to an architectural firm to furnish expertise 
     in the selection of a heating  contractor  and  oversee  the  installation
     should have been recognized as  an  expense  in  computing  the  increases
     allowed for the major capital improvement of a new  heating  system.   The
     owner  points  to  a  provision  of  the  Internal  Revenue  Code   as   a
     justification for such consideration.   The  owner  further  contends,  in
     substance, that cancelled checks are not  necessary  to  substantiate  the
     cost of a major capital improvement; and that, in fact, it did submit  the
     balance of cancelled checks totalling $12,336.66 prior to the issuance  of
     the order appealed herein. Submitted with the petition are photocopies  of
     cancelled checks referred to in the petition.

     This appeal is being  considered  in  conformity  with  the  provision  of
     Chapter 403 of the Laws of 1983 (the Omnibus  Housing  Act  of  1983),  as
     amended, but in the opinion of the Commissioner the record is not adequate 
     to form a proper determination of the  issues  in  this  proceeding.   The
     proceeding must, therefore, be remanded  to  the  Rent  Administrator  for
     further consideration.

     With respect to the  owner's  contention  that  the  fee  paid  to  R.A.S.
     Associates,  heating   consultants,   was   improperly   disallowed,   the
     Commissioner notes that a major capital improvement of the  type  involved
     herein (boiler/burner) is relatively commonplace and an owner is  presumed
     to have sufficient knowledge to select a heating contractor and 


          DOCKET NUMBER: BD 710527-RO
     equipment of sufficient capability  to  ensure  that  it  will  receive  a
     quality installation adequate to meet the needs  of  the  premises  to  be
     supplied.  Costs for plans and applications and consulting engineer's  fee
     may possibly be allowed only in the rare instance that the heating  system
     had to be of such unusual design because of unique or particular  features
     of the premises to be heated that the advice of a consulting engineer  and
     extraordinary plans were a necessity.  

     However, since  it  does  not  appear  that  the  owner  was  afforded  an
     opportunity to establish the necessity  for  incurring  the  architectural
     fees  claimed  herein,  in  what  otherwise  appears  to  be  an  ordinary
     installation,  the  Commissioner  deems  it  appropriate  to  remand  this
     proceeding for such further processing as may be  necessary  in  order  to
     ascertain the validity of the landlord's claimed expenditure and whether a 
     further rent adjustment is warranted therefor.

     As to the other claimed expenditure disallowed by the Administrator, while 
     certain checks are not contained in the Administrator's  file,  the  owner
     has submitted such documents with its petition.  While  it  is  not  clear
     whether this expenditure was incurred in  connection  with  other  heating
     systems installed within the  complex,  since  this  proceeding  is  being
     remanded for further consideration for the reasons above noted, it is  the
     opinion of the  Commissioner  that  the  owner  be  afforded  the  further
     opportunity to substantiate whether a further adjustment is warranted  for
     the boiler/burner supplies.

     THEREFORE, in accordance with the provisions  of  the  Rent  Stabilization
     Code, it is

     ORDERED, that this petition be, and the same  hereby  is  granted  to  the
     extent of remanding this proceeding to the Rent Administrator for  further
     processing in accordance with this  order  and  opinion.   The  order  and
     determination of the Rent Administrator remains in full force  and  effect
     until a new order is issued on remand.


                                          JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


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