Building Exempt from Rent Stabilization

Landlord claimed that its building was exempt from rent stabilization due to a substantial rehabilitation in 1987. Landlord asked the DHCR to make a ruling confirming this. The DRA ruled for landlord. Tenants appealed, claiming that landlord didn't comply with the DHCR's standards for substantial rehabilitation, because the building's fire prevention system didn't comply with applicable building codes and requirements. Tenants pointed to a 2008 alteration application with DOB where landlord sought to laminate the public hallways in the building to obtain a required fire rating. Tenants showed that DHCR Operational Bulletin 95-2 states that a building won't be found to qualify unless "all building systems comply with all applicable building codes and requirements."
The DHCR ruled against tenants. Landlord submitted documents showing that DOB issued a new Certificate of Occupancy (C of O) in 1987 and that landlord had replaced 75 percent of the building's systems at that time. The building was vacant before the renovation work, so there was a presumption that the building was substandard or in seriously deteriorated condition. Since DOB issued a new C of O in 1987, there was also a presumption that the work was done in compliance with applicable building codes.

Various Tenants: DHCR Adm. Rev. Docket No. WG410066RT (9/3/08) [3-pg. doc.]