Landlord v. Tenant: November 2016

MAJOR CAPITAL IMPROVEMENTS

Contractor Mobilization Costs Included in Approved MCI Costs

Landlord applied for MCI rent hikes based on the installation of new cooling towers, oil to gas conversion, and tank abandonment. The DRA ruled for landlord in part, disallowing $100,000 in mobilization costs. Landlord and tenant both appealed. The DHCR ruled against tenant, who argued that the MCIs lowered landlord’s utility costs. The DHCR ruled for landlord since the DHCR generally allows as part of the MCI cost a contractor’s mobilization costs that were necessary and directly related to the completing an MCI.

• Hampton Mgmt. Company, LLC/Sheppard: DHCR Adm. Rev. Docket Nos. BV610050RO, BU610062RT (7/29/16)

RENT OVERCHARGE

DHCR Finds No Indication of Fraud Warranting Review of Old Rents

(Decision submitted by Eileen O’Toole of the Manhattan law firm of Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., who represented the landlord.)

Rent-stabilized tenant complained of rent overcharge. The DRA ruled against tenant, finding no overcharge during the four-year period before tenant filed his complaint.

Tenant appealed and lost. Tenant claimed that landlord committed fraud in setting a rent before the base rent date and the DHCR therefore should look back more than four years to determine a rent overcharge. Tenant argued that the apartment was previously rented to his former domestic partner. When tenant’s name was added to a renewal lease in 2005, landlord fraudulently increased the rent by 12.75 percent. Tenant claimed that this was part of a fraudulent scheme to remove the apartment from rent stabilization. In response, landlord pointed out that the apartment had never been deregulated, and that when landlord added tenant as a co-tenant to the lease, landlord could have given both tenants a vacancy lease and collected a 16.25 percent rent increase.

The DHCR found no indication of fraud that would trigger the DHCR’s obligation to review the legality of the 2005 rent. The apartment hadn’t been deregulated, tenant had been given rent-stabilized leases, and the rent registrations were consistent with the leases. Landlord was permitted to collect a vacancy increase when a roommate was named on a lease. While tenant now argued that he was a family member when he was added to the lease in 2005, the DHCR couldn’t say 11 years later that this showed a fraudulent scheme to deregulate the apartment.

• Davies: DHCR Adm. Rev. Docket No. EO410027RT (8/30/16)

RENT REDUCTION DENIED

Gas Service Restored by Time of DHCR Inspection

Rent-stabilized tenant complained of a reduction in services, claiming that she had no use of the stove and oven in her apartment because there was no gas service. The DRA ruled against tenant, after inspection found that they were working. Tenant appealed and lost. Landlord, who owned tenant’s cooperative apartment, had stated that Con Edison temporarily shut down gas service to the entire building. During that month, landlord gave tenant a 15 percent rent abatement. And, by the time the DHCR inspected the apartment, gas service had been restored.

• Prusiewicz: DHCR Adm. Rev. Docket No. EP410056RT (7/13/16)

RENT REDUCTION DENIED

Decrease in Janitorial Staff Was Minor Condition

Tenant complained of a reduction in building-wide services. The DRA ruled against tenant and dismissed the case. Tenant appealed and lost. Tenant argued that the removal of a full-time porter resulted in a decrease in janitorial services at the building. But, based on inspection, the DRA found that it appeared that janitorial service was provided regularly at the building. A decrease in the number of janitorial staff, provided there is no decrease in janitorial services, is a de minimis condition listed in Rent Stabilization Code Section 2523.4(e) and doesn’t warrant a rent reduction.

• Meltzer/Lindenberg: DHCR Adm. Rev. Docket No. EP430028RT (7/28/16)

REQUIRED SERVICES

Landlord Relocated Laundry Room to Basement Without DHCR Approval

Rent-stabilized tenant complained of a reduction in services based on landlord’s relocation of the building’s laundry room from tenant’s floor to the building basement. The DRA ruled for tenant and reduced her rent. Landlord appealed and lost. Landlord argued that no required service was reduced but that tenant was merely inconvenienced. But the DHCR found that landlord had modified a required building service without obtaining prior DHCR approval to do so. Tenant’s rent was properly reduced. Landlord could file an application for permission to modify services with the DHCR.

• HFZ 88 Lexington Avenue Owner LLC: DHCR Adm. Rev. Docket No. EO410016RO (7/13/16)