Docket No. FK830467RT

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

          APPEAL OF                               DOCKET NO. FK830467RT 

          STREET, 96 CRISFIELD STREET, 98 
          CIRCLE, 95 BEAUMONT CIRCLE, 105 
          YONKERS, NEW YORK,


              The above-named tenants filed a petition for administrative 
          review on November 8, 1991, of an order issued on October 10, 1991 
          by a Rent Administrator concerning various housing accommodations 
          in the premises known as 31 Nassau Road, Yonkers, New York and the 
          above-listed premises.

              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 petition for review.

              The owner commenced this proceeding on December 4, 1989 by 
          filing an application for a rent increase based on a major capital 
          improvement (M.C.I.), for the installation of a roof (at a cost of 
          $401,760.00); installation of gutters and leaders (at a cost of 
          $87,899.00), and the installation of window sills (at a cost of 
          $141,265.00), at a total cost of $630,924.00.

              On October 10, 1991, the Rent Administrator issued the order 
          under review herein, finding that the installations qualified as a 
          M.C.I., and allowing rent increases for the subject apartments in 
          the amount of $5.04 per room, per month.

          Docket No. FK830467RT

              In their petition the tenants assert, among other things, that:

               1. The cost of the installations were excessive;
               2. They had not received new window sills;
               3. The owner's application for the M.C.I. rent increase did   
                  not contain "invoices to back up" the cancelled checks;
               4. The owner's application for the M.C.I. rent increase       
                  contained only twenty-three checks in the total amount of 
               5. Installation of window sills do not qualify as an M.C.I., 
               6. The M.C.I. rent increase should be denied because some of 
                  the items which qualify for an M.C.I. are defective.

              In its answer to the tenants' petition the owner asserts, among 
          other things, that the work on the window sills consisted of 
          "resetting, pointing and where necessary replacement"; that the 
          work on the window sills will extend the useful life of the 
          structure; that prior orders of the rent agency have held that the 
          aforementioned work on the window sills qualified as an M.C.I.; 
          that there is no requirement that every sill be replaced; that the 
          tenants do not assert any legal basis for questioning the costs of 
          the M.C.I.; that the owner complied with all regulatory 
          requirements in proving its costs for the M.C.I.; that the subject 
          owner has submitted copies of all checks "representing the contract 
          price" of the major capital improvements, and that the owner is 
          investigating any defects that are being alleged by the tenants.

              After careful consideration, the commissioner is of the opinion 
          that this petition should be granted in part.

              As to the tenants' assertion that the cost of the installations 
          were excessive, 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 

              The Commissioner notes that in addition to submitting to the 
          rent agency an application for a rent increase based on an M.C.I., 
          the subject owner also submitted a form promulgated by the rent 
          agency entitled "Supplement to Owner's Application for Rent 
          Increase."  The form contained a section entitled "Pointing and 
          Waterproofing," which directed the owner, if applicable, to respond 
          to the following:

               1) How many sides of the building are exposed and to identify 
                 the sides;

          Docket No. FK830467RT

               2) Submit a diagram of the building indicating areas where    
                  waterproofing and pointing was performed, and 

               3) Submit a statement from the contractor advising whether all  
                  exposed sides of the building were examined prior to the   
                  work performed, and that based upon such examination the   
                  sections waterproofed and pointed were all areas where it  
                  was required.

              The record reflects, and the owner asserts, that the work on 
          the window sills consisted of "resetting, pointing, and where 
          necessary replacement."  

              The Commissioner points out that the rent agency's present 
          policy is that in order to qualify for an M.C.I. rent increase for 
          pointing, pointing must be done wherever necessary, and the owner's 
          assertion of where it was necessary must be adequately proven.     
              The Commissioner finds that the subject owner did not respond 
          to the directives of the aforementioned form pertaining to pointing 
          and waterproofing, and that the subject owner did not establish 
          that the pointing of the window sills were necessary.

              Accordingly, the Commissioner finds that the subject owner has 
          not complied with the above-mentioned requirements to qualify for 
          an M.C.I. rent increase for the pointing of the window sills.

              As the owner also asserts that the window sills were replaced 
          where necessary, and that various tenants assert that they did not 
          receive new window sills, the Commissioner finds that the work on 
          the window sills was not a building-wide improvement, and that the 
          work on the window sills constituted ordinary repair and 

              For work to qualify as a major capital improvement, it most 
          satisfy various criteria.  Not only must it be depreciable in 
          nature but the installation must be required for the continued 
          operation, preservation, and maintenance of the structure, other 
          than ordinary repairs and maintenance.  The installation must be 
          one which is essentially structural in nature and materially add to 
          the value of the property and appreciably prolong the life thereof.

              As it has been determined that the work on the window sills 
          constituted ordinary repair and maintenance, the Commissioner finds 
          that such work does not qualify as an M.C.I. 
              Accordingly, the Commissioner finds that the Administrator's 
          order is to be modified to reflect the fact that the work on the 
          window sills do not qualify as an M.C.I.

              The Commissioner finds that the prior rent agency's orders 
          cited by the subject owner in support of its contention that work 

          Docket No. FK830467RT

          on the window sills qualify for an M.C.I. are not applicable to  
          this proceeding, as those orders mostly pertain to either window 
          replacement or the installation of a new roof.  The Commissioner 
          notes that in the one order cited by the owner that actually was 
          related to work on window sills, the Commissioner in that 
          proceeding determined that the work on the window sills qualified 
          as an M.C.I. in conjunction with window replacements.  The 
          Commissioner further notes that in this proceeding the subject 
          owner did not apply for an M.C.I. rent increase for window 

              As to the work done on the building's roof, gutters and 
          leaders, the Commissioner finds that the Administrator's 
          determination that these items qualified as an M.C.I. was proper 
          and should not be disturbed.

              The record reflects that the subject owner submitted thirty-two 
          cancelled checks to the Administrator to substantiate the cost of 
          the work that was done as alleged in the application for the M.C.I. 
          rent increase.  The record further reflects that the total amount 
          of these cancelled checks equal to $630,924.00, which is the amount 
          the subject owner cited in its application as the total cost of the 
          work done.

              The Commissioner finds that the dates of the above-mentioned 
          cancelled checks which were submitted to the Administrator were 
          contemporaneous with the commencement and completion dates of the 
          work on the subject building.

              The Commissioner notes that Policy Statement 90-10 states as 

               Any claimed MCI or individual apartment improvement cost 
               must be supported by adequate documentation which should 
               include at least one of the following:

               1) Cancelled check(s) contemporaneous with the completion of  
                  the work;

               2) Invoice receipt marked paid in full contemporaneous with   
                  the completion of the work;

               3) Signed contract agreement, and 

               4) Contractor's affidavit indicating that the installation was  
                 completed and paid in full.

              Pursuant to Policy Statement 90-10, the Commissioner finds that 
          the owner's submission of the aforementioned cancelled checks to 
          the Administrator was adequate documentation to substantiate the 
          cost of the work cited in the owner's application.

          Docket No. FK830467RT

              As to the tenants' assertion that the owner's application did 
          not include invoices, the Commissioner finds that invoices are not 
          necessary as evidence that an item was paid for where, as in this 
          proceeding, cancelled checks showing the cost of the items were 
          submitted.  Accordingly, the Commissioner finds that the items in 
          the owner's application pertaining to the work on the roof, gutters 
          and leaders, were sufficient to warrant a M.C.I. rent increase.

              As the cost of the work on the building's window sills are 
          being disallowed in the computation of the M.C.I. rent increase, 
          the Commissioner finds that the Administrator's order is further 
          modified to reflect the change in the M.C.I. rent increase, and is 
          computed as follows:  $489,659.00(allowable cost-cost of window 
          sills) divided by 60, divided by 2,087(number of rooms) =$3.91 per 
          room, per month.

              Accordingly, the Commissioner finds that the subject owner is 
          entitled to an M.C.I. rent increase in the amount of $3.91 per 
          room, per month, effective upon the expiration of the lease that 
          was in effect on October 9, 1991 (the issuance date of the 
          Administrator's order), unless there was an authorized provision in 
          the lease, in effect on October 9, 1991, to permit an M.C.I rent 
          increase during its term, and providing that the work constituting 
          major capital improvements were commenced prior to the commencement 
          of the above-mentioned lease, in which case the M.C.I. rent 
          increase becomes effective on the first rent payment date following 
          the issuance of the Administrator's order.

              The Commissioner further finds that the remainder of the terms 
          and conditions of the M.C.I. rent increase as cited in the 
          Administrator's order shall remain in effect.

              The Commissioner notes that this order is without prejudice to 
          the tenants' right to file a complaint of a diminution in services 
          due to alleged defects in any of the aforementioned items which 
          qualified as an M.C.I. in this proceeding.

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

              ORDERED, that this petition be, and the same hereby is, granted 
          in part, and that the order of the Rent Administrator be, and the 
          same hereby is, modified, in accordance with this order and 
          opinion, and it is

              FURTHER ORDERED, that the owner shall repay to the tenants any 
          excess rent arising as a result of this order within thirty days 
          from the date of issuance hereof.


          Docket No. FK830467RT

                                             Joseph A. D'Agosta
                                             Deputy Commissioner

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