FG 230010-RO; FG 230011-RO

                                  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   S.J.R. NO.: 6058
          IN THE MATTER OF THE ADMINISTRATIVE    ADMINISTRATIVE REVIEW
          APPEALS OF                         :   DOCKET NOS.: FG 230010-RO
                                                              FG 230011-RO
             DGJ REALTY CORP.,               :                                  
                                                 DISTRICT RENT ADMINISTRATOR'S 
                                             :   DOCKET NOS.: EE 230077-OM
                                                              FC 230197-OM
                              PETITIONER     :
          -----------------------------------X


                    ORDER AND OPINION GRANTING IN PART PETITIONS
            FOR ADMINISTRATIVE REVIEW AND REMANDING PROCEEDING ON APPEAL 

          This order and opinion is issued pursuant to a stipulation entered 
          into before Justice Vaccaro of the Supreme  Court,  Kings  County,
          remitting an Article 78 proceeding and directing the  Division  of
          Housing and Community Renewal (DHCR) to issue a  determination  of
          the owner's administrative appeals herein.

          The Commissioner deems it appropriate to consolidate  the  owner's
          administrative appeals for  determination  under  this  order  and
          opinion as they involve common issues of law and fact.

          The owner of the subject premises (two adjacent buildings  located
          at 8758 Bay Parkway and 159 Bay 29th Street, Brooklyn,  New  York,
          various apartments) initiated  the  proceedings  below  by  filing
          applications for major capital improvement  (MCI)  rent  increases
          for the controlled and stabilized apartments in the premises based 
          on the installation of a new boiler/burner at the  premises.   The
          owner initially submitted its applications to  the  District  Rent
          Administrator in August of 1989.  In the applications,  the  owner
          stated, among other things, that (a)  the  new  boiler/burner  was
          installed to serve the two adjacent buildings; (b) the owner acted 
          as its own general contractor; (c) the new  boiler  was  purchased
          from a manufacturer and a new burner was purchased at  an  auction
          sale; (d) the owner used its own labor for some of  the  work  and
          used contractors and an engineer for other work; and (e)  the  new
          boiler was put into operation in the fall of 1988.   Subsequently,
          the  Administrator  requested  the   owner   to   submit   further
          documentation  and   the   owner   replied,   submitting   various
          governmental approvals  and  sign-offs  and  bills,  invoices,  an
          affidavit, and cancelled checks  in  an  attempt  to  substantiate
          total claimed costs of $75,000.00.

          The District Rent Administrator's orders, appealed herein,  denied
          the  owner's  applications,  stating  that  the  owner   submitted
          incomplete information/evidence and failed to comply wi h  follow-
          up  requests  for  proof  of  payment,   contracts,   and   vendor
          supplements.  With respect to the building at 159 Bay 29th  Street
          (Docket No. FC 230197-OM), the Administrator stated that the owner 
          failed  to  file  its  application  within  two  years  from   the






          FG 230010-RO; FG 230011-RO


          completion of installation.   In  addition,  both  Administrator's
          orders noted that the work start and completion dates could not be 
          determined due to contradictions.

          On appeal, the petitioner-owner contends, in substance,  that  (I)
          it submitted all the documentation required and complied with  all
          follow-up requests; and (II) the work start and  completion  dates
          were furnished and the owner is not aware of any contradictions.

          After a careful consideration of the entire evidence of record the 
          Commissioner is of the opinion  that  the  administrative  appeals
          should be granted in part and  this  proceeding  remanded  to  the
          Administrator for further processing in accordance with this order 
          and opinion.

          At the outset, the Commissioner notes that  the  record  discloses
          the filing of both MCI applications herein on May 11, 1990.  Since 
          the earliest possible completion date disclosed by the record  for
          the installation herein is September  of  1988,  such  filing  was
          timely  (well  within  the  two  year  limitation).   Furthermore,
          although the owner failed to submit in the proceeding below or  on
          this appeal any documentation of the alleged  purchase  of  a  new
          burner at an auction,  the  petitioner  did  submit  documentation
          substantiating the purchase of the  new  boiler,  in  addition  to
          certain  other  documentation  (invoices,  bills,  and   cancelled
          checks) showing payments made  to  various  contractors  for  work
          claimed to be done herein.  While the costs substantiated  by  the
          owner  appear  to  be  far  below  the  total  claimed  costs   of
          $75,000.00, the Administrator's denial of the owner's applications 
          in toto was erroneous.  Thus, this proceeding should  be  remanded
          to  the  Administrator  for  further  processing  of  the  owner's
          applications, including consideration of any issues raised by  the
          tenants upon remand.

          THEREFORE, in accordance with the  applicable  provisions  of  the
          Rent Stabilization Code, the Rent and Eviction Regulations for New 
          York City, and Operational Bulletin 84-1, it is

          ORDERED, that the Administrative Appeals be, and the  same  hereby
          are granted to the extent of  remanding  this  proceeding  to  the
          Administrator for further processing in accordance with this order 
          and opinion.  The orders and determinations of  the  Administrator
          remain in full force and effect until new orders are  issued  upon
          remand.

          ISSUED:             
                                          ----------------------
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner
    

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