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
         IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
         APPEAL OF                              DOCKET NOS. CH 910141-RT
                                                            CH 910143-RT
              MATTHEW SPERBER, TERRI SPERBER :  DISTRICT RENT
              AND SEVERAL TENANTS RESIDING AT   ADMINISTRATOR'S
            3 NASSAU ROAD, 4 NASSAU ROAD, 30    DOCKET NO. YAL 8-1-0002-OM
              NASSAU ROAD, 33 NASSAU ROAD, 50
              SHOREVIEW DRIVE, 70 SHOREVIEW
              DRIVE, 73 SHOREVIEW DRIVE,
              82 SHOREVIEW DRIVE, 91
              SHOREVIEW DRIVE, 93 SHOREVIEW
              DRIVE, 94 SHOREVIEW DRIVE, 90
              CRISFIELD STREET, 92 CRISFIELD
              STREET, 96 CRISFIELD STREET,
              98 CRISFIELD STREET, AND 91
              BEAUMONT CIRCLE, YONKERS,
              NEW YORK,
                               PETITIONERS   :
         ------------------------------------X

                         ORDER AND OPINION DENYING PETITIONS
                              FOR ADMINISTRATIVE REVIEW

         The above-named tenants filed petitions for administrative review on 
         August 29, 1988 and August 24, 1988 respectively, of an order issued 
         on August 2, 1988 by a Rent Administrator concerning various housing 
         accommodation in the premises known as 20 Nassau Road, Yonkers, New 
         York and the above-listed premises.

         The Commissioner notes that there are two separate petitions filed in 
         this action and that they were given two different administrative 
         review docket numbers, CH910141RT and CH910143RT.  Since the petitions 
         contain common questions of law and fact, the Commissioner is of the 
         opinion that they should be consolidated for disposition.

         The Commissioner has reviewed all of the evidence in the record and 
         has carefully considered that portion of the record relevant to the 
         issues raised by the administrative appeals.

         The owner commenced this proceeding on October 31, 1986 by filing an 
         application for a rent increase based on a major capital improvement 
         (M.C.I.), for the installation of six new oil burners/boilers and fuel 
         tank, at a total cost of $615,500.00.














         DOC. NOS.: CH 910141-RT and CH 910143-RT



         On August 2, 1988, the Rent Administrator issued the order here under 
         review, finding that the installations qualified as a M.C.I., and 
         allowing appropriate rent increases for rent-stabilized apartments.

         In the petition for administrative review filed under Docket No. CH 
         910141-RT, the tenants assert that the installation of new burners is 
         regular maintenance and not a M.C.I.

         The Commissioner is of the opinion that this petition should be 
         denied.

         As the tenant has not established that the issue concerning whether 
         the installation of the new burners is a M.C.I., which is raised for 
         the first time upon administrative review, could not reasonably have 
         been raised in the proceeding before the District Rent Administrator, 
         it is outside the scope of the Commissioner's review in this 
         proceeding.  The Commissioner notes that the installation of new 
         burners does qualify as a M.C.I., as the installation was required for 
         the operation, preservation, and maintenance of the structure.  
         Therefore, even if the tenant had raised the issue concerning the 
         installation of the new burners before the District Rent 
         Administrator, the Commissioner would affirm the Administrator's 
         determination regarding the installation.

         In the petition for administrative review, filed under Docket No. CH- 
         910143-RT, the tenants assert that:

              1.   The cost of the boilers and burners was 
                   excessive;

              2.   Another company would have done the work at a 
                   lower cost;

              3.   The owner's application for the M.C.I. rent 
                   increase did not contain "invoices to back up the 
                   cancelled checks", New York State Certificate of 
                   Capital Improvement, and Contractor Exempt 
                   Purchase Certificate;

              4.   The Supreme Court in a case entitled Ansonia 
                   Residents Association v. D.H.C.R., held that 
                   M.C.I. rent increases are not of a permanent 
                   nature, but are only to be in effect until the 
                   cost of the M.C.I. has been recovered and then 
                   the rent increase should be terminated;










         DOC. NOS.: CH 910141-RT and CH 910143-RT

              5.   The tenants were never advised where they could 
                   see the owner's application for a M.C.I. rent 
                   increase;

              6.   The Division of Housing and Community Renewal 
                   (D.H.C.R.) did not thoroughly investigate the 
                   owner's application to ascertain if the costs 
                   were excessive, and 

              7.   The M.C.I. rent increase should be denied because 
                   the old boilers were never maintained, and that 
                   the new boilers are defective.

         After careful consideration the Commissioner is of the opinion that 
         this petition should be denied.

         There is no requirement in the applicable regulations that the owner 
         hire a lower priced contractor or engage in competitive bidding in 
         awarding a contract to install the boilers or burners.  The 
         Commissioner notes that the prices quoted by the other boiler company 
         to do the work on the subject premises did not include the cost of 
         removing the old boiler and obtaining the proper permits, and was 
         subject to change based upon field inspections.  Accordingly, the 
         Commissioner finds that the fact that the owner might have been able 
         to have the work done more cheaply, does not bar the owner from 
         receiving a M.C.I. rent increase in this proceeding.

         As to the items that the tenants allege are missing from the owner's 
         application, the Commissioner finds that those items are not necessary 
         for the granting of a M.C.I.  The Commissioner further finds that 
         invoices are not necessary as evidence that an item was paid for 
         where, as in this proceeding, a contract showing the items and their 
         costs was submitted.  Accordingly, the Commissioner finds that the 
         items in the owner's application were sufficient to warrant a M.C.I. 
         rent increase.

         The Commissioner notes that the New York State Court of Appeals has 
         decided the issue of whether a M.C.I. rent increase is permanent or 
         not.  In the case of In the Matter of Ansonia Residents Association v. 
         New York State Division of Housing and Community Renewal, 75 N.Y.2d 
         206 (1989), the court held that a M.C.I. rent increase is permanent 
         and not a temporary increase until the costs are paid for.  The Court 
         further held that D.H.C.R.'s interpretation of the statute, allowing 
         permanent M.C.I. rent increases, is consistent with the legislative 
         history and intent of the statute.






         The Commissioner finds that the tenants' assertion that D.H.C.R. did 












         DOC. NOS.: CH 910141-RT and CH 910143-RT

         not thoroughly investigate the owner's petition is unsubstantiated.  
         The Commissioner further finds that the fact that the new boilers 
         occasionally require maintenance does not deprive the owner of the 
         right to a M.C.I. rent increase.  However, the Commissioner notes that 
         this order is without prejudice to the tenants' right to file a 
         complaint if the boilers are currently defective.  The Commissioner 
         further notes that the allegation that the old boilers were not 
         maintained is not supported by any evidence.

         The tenants' assertion that they were not advised as to where they can 
         review the owner's file, is not supported by the record.  The owner 
         has certified that on December 31, 1986 a copy of the application form 
         was mailed to the tenants, and a complete copy of the application was 
         placed in the superintendent's office located at 90 Beaumont Circle, 
         Yonkers, New York.  The tenants' above-mentioned assertion is belied 
         by the fact that the tenants' answer to the owner's application for a 
         M.C.I. rent increase mentions certain items that are missing from the 
         owner's application.  Accordingly, the Commissioner finds that the 
         tenants had an opportunity to review the owner's application prior to 
         the issuance of the Rent Administrator's order.

         Accordingly, the Commissioner finds that the Administrator's order 
         should be affirmed. 
                            
                    

         THEREFORE, in accordance with the provisions of the Emergency Tenant 
         Protection Act of 1974 and the Tenant Protection Regulations, it is

         ORDERED, that these petitions be, and the same hereby are, denied, and 
         that the order of the Rent Administrator be, and the same hereby is, 
         affirmed.

         ISSUED:

                                                                          
                                            ELLIOT SANDER
                                            Deputy Commissioner
          
    

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