Gas Conversion Didn’t Qualify as MCI

Landlord applied for MCI rent hikes based on gas conversion, from existing #4 fuel oil to #2 fuel oil and natural gas. The DRA ruled against landlord, who appealed and lost. The DHCR’s position is that the cost of converting #6 or #4 fuel oil to natural gas and/or #2 fuel oil is only an MCI eligible expense when performed in conjunction with the installation or replacement of a qualifying burner/boiler. Since landlord’s gas conversion wasn’t conducted as part of the installation of a new burner, it didn’t qualify as other necessary work that would result in an MCI rent increase.

Barry Martin 599 Corp.: DHCR Adm. Rev. Docket No. BN430031RO (2/19/16) [2-pg. doc.]