DHCR Denies Landlord's Reasonable Cost Waiver Request for Electrical Rewiring

Landlord applied to the DHCR for MCI rent hikes based on electrical rewiring. The DRA ruled for landlord in part.

Landlord appealed and lost. Landlord argued that, because the MCI was completed in March 2019, prior to enactment of the HSTPA on June 14, 2019, the DRA had improperly applied the HSTPA retroactively to landlord's application. The DHCR pointed out that, although the MCI work was completed prior to HSTPA's enactment, landlord didn't file its MCI application until July 8, 2019. In any event, when landlord completed the MCI in March 2019 it didn't: (a) possess a legal right to an MCI rent increase not yet applied for; (b) didn't bear any increase in liability for past conduct as a result of the MCI amendments enacted by HSTPA; or (c) didn't have any new duties imposed on it with respect to transactions already completed. Appellate courts also had upheld the DHCR's application of HSTPA amendments to MCI applications like the one here. 

The DHCR also found that the DRA's denial of the HSTPA's Reasonable Cost Schedule waiver to landlord was reasonable. The affidavit of landlord's architect didn't provide credible supported proof that the claimed costs for the electrical rewiring were appropriately, reasonably, and accurately priced under the circumstances. The architect also didn't explain in the affidavit why the claimed costs were necessary or provide examples of similar projects/costs to establish that the costs were reasonable. Merely stating that the claimed costs were appropriate, reasonable, and accurate under the circumstances was insufficient for the waiver request.

325/93 Associates LLC: DHCR Adm. Rev. Docket No. KP410017RO (1/16/25)[4-pg. document]