Building Exempt Based on Substantial Rehabilitation

Landlord applied to the DHCR for a ruling that its building was exempt from rent regulation. Landlord claimed that the building was substantially rehabilitated after Jan. 1, 1974. The DRA ruled for landlord. Tenant appealed and lost. Landlord proved that it replaced enough building systems in 1999–2000 to qualify for substantial rehabilitation exemption. The building was more than 80 percent vacant when landlord bought it. So presumably it was seriously deteriorated. Landlord also showed that it replaced all plumbing and heating systems, gas supply, electric meters and wiring, and that it replaced a bell/buzzer system with an intercom, replaced the roof, brought fire escapes and interior stairways up to code, totally renovated all kitchens and bathrooms, and refinished all floors. Landlord also performed exterior surface repair as needed.

Akpan: DHCR Adm. Rev. Dckt. No. TD210009RK (5/19/05) [8-pg. doc.]