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

       ------------------------------------X  S.J.R. NO. 6417
       APPEAL OF                              DOCKET NO.FL 430143-RO
                                              RENT ADMINISTRATOR'S
         SULZBERGER-ROLFE                     DOCKET NO. CF 430032-OM
                             PETITIONER    : 


       On December 6, 1991 the above named petitioner-owner filed a Petition for 
       Administrative Review against an order issued on November 1, 1991 by the 
       Rent Administrator, 92-31 Union Hall Street, Jamaica, New York concerning 
       housing accommodations known as 229 and 230 West 79th Street, New York, New 
       York, various accommodations, wherein the Administrator authorized a major 
       capital improvement rent increase based on the installation of new water 
       tanks.  Said order was issued after a review of the supporting documentation 
       submitted by the owner and the tenant responses received in response to the 
       MCI application.

       The Rent Administrator disallowed expenditures made for 
       pointing/waterproofing and the installation of a new parapet wall and a new 
       roof based upon a determination that the costs were not properly 
       substantiated and the owner had failed to submit executed contracts for said 

       Subsequent thereto, the petitioner-owner filed a petition in the Supreme 
       Court pursuant to Article 78 of the Civil Practice Law and Rules requesting 
       that the "deemed denial" of the petitioner's administrative appeal be 
       annulled.  The proceeding was then remitted, by Court order, to the Division 
       for consideration of the petitioner's administrative appeal.

       In this petition the owner contends, in substance, that it had submitted 
       executed contracts for the disallowed improvements and that it had 
       substantiated the costs for said improvements.

       The Commissioner is of the opinion that this petition should be granted in 
       part and remanded to the Administrator for further consideration.

       Rent increases for major capital improvements are authorized by Section 
       2202.4 of the Rent and Eviction Regulations for rent controlled apartments 
       and Section 2522.4 of the Rent Stabilization Code for rent stabilized 
       apartments.  Under rent control, an increase is warranted where there has 
       been since July 1, 1970 a major capital improvement required for the 
       operation, preservation, or maintenance of the structure.  Under rent 


          DOCKET NUMBER: FL 430143-RO
       stabilization, the improvement must generally be building-wide; depreciable 
       under the Internal Revenue Code, other than for ordinary repairs; required 
       for the operation, preservation, and maintenance of the structure; and 
       replace an item whose useful life has expired.

       The record in this case reveals that the owner submitted copies of one 
       proposal for the claimed parapet work, and one for the new roof and the 
       claimed pointing/waterproofing, both of which were accepted by the owner as 
       evidenced by his signature on same.  The Commissioner is of the opinion that 
       this documentation is sufficient evidence that agreements existed between 
       the contractor and the owner for the work to be performed.  However, the 
       Commissioner notes that the owner did not submit a copy of an executed 
       contract for the erection and maintenance of the scaffolding which was 
       listed separately in the MCI application and which the owner indicated on 
       appeal was contracted for separately with a different contractor.  Based 
       thereon, the Commissioner finds that the Rent Administrator properly 
       disallowed scaffolding related expenses.

       With regard to the parapet, the roof and the pointing/waterproofing, the 
       record is unclear as to the extent of the work performed.  In view of the 
       owner's submission of various other documentation which included but was not 
       limited to copies of invoices, contractor's certifications and cancelled 
       checks, the Commissioner deems it appropriate to remand this proceeding for 
       such further processing as may be deemed necessary, including  a physical 
       inspection to ascertain, among other things, the extent and 
       comprehensiveness of the work claimed to have been performed and to consider 
       such allegations as may have been raised in the proceeding below with 
       respect to the quality of the claimed improvements.  While the Administrator 
       properly disallowed such portions of the application as relates to the 
       claimed scaffolding expense, in view of the fact that this proceeding is 
       being remanded for further processing, the Commissioner is of the further 
       opinion that the owner should be afforded a final opportunity to establish 
       the validity of this claimed expenditure.

       THEREFORE, in accordance with the Rent and Eviction Regulations of New York 
       City and the Rent Stabilization Law and Code, it is

       ORDERED, that this petition be, and the same hereby is, granted in part and 
       the proceeding is hereby remanded to the Rent Administrator for further 
       consideration in accordance with this order and opinion.


                                            JOSEPH A. D'AGOSTA
                                        Acting Deputy Commissioner


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