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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BD 710527-RO
:
RENT ADMINISTRATOR'S
ROCKAWAY ONE CO., DOCKET NO.: QS 000564-OM
PETITIONER :
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ORDER AND OPINION REMANDING PETITION FOR ADMINISTRATIVE REVIEW
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
substantiated.
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.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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