Cost of Labor Performed by Landlord's Employees Deducted

June 30, 2003

LVT Number: 16648

Landlord applied for MCI rent hikes based on exterior work and window installation. The DRA ruled for landlord but disallowed the cost of labor performed by landlord's employees. Landlord appealed, claiming that the employees didn't work only for landlord and that while they were doing the MCI work, they weren't doing other building maintenance. The DHCR ruled against landlord. When landlord acts as its own general contractor and work is done by landlord's own employees as part of their regular compensation, this cost can't be recovered through a rent increase.

Landlord applied for MCI rent hikes based on exterior work and window installation. The DRA ruled for landlord but disallowed the cost of labor performed by landlord's employees. Landlord appealed, claiming that the employees didn't work only for landlord and that while they were doing the MCI work, they weren't doing other building maintenance. The DHCR ruled against landlord. When landlord acts as its own general contractor and work is done by landlord's own employees as part of their regular compensation, this cost can't be recovered through a rent increase.

431 Holding LLC: DHCR Adm. Rev. Dckt. Nos. QD410089RO & QD410130RT (5/15/03) [8-pg. doc.]

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