Landlord Didn't Cure Rent Reduction Orders and "C" Violations

Landlord applied for MCI rent hikes based on elevator upgrading. The DRA ruled against landlord in 2014, finding that there was an outstanding DHCR rent reduction order in effect for failure to maintain building-wide services as well as a number of hazardous violations on record for the building.

Landlord appealed and lost. Under applicable law and the Rent Stabilization Code in effect when the DRA order was issued, an MCI rent hike won't be granted when, as of the date the application was filed, landlord wasn't maintaining all required services or there were immediately hazardous violations on record for the building. In this case, there were two DHCR rent reduction orders in effect for failure to maintain building-wide services when landlord filed its MCI application. And there were numerous HPD "C" violations on record. The DRA had offered landlord a chance to correct the violations and get the rents restored within 60 days in order to maintain the initial MCI filing date.

Eight months later, the HPD violations were still on record and the DRA told landlord that failure to cure the violations could result in dismissal of the MCI application. At that point, landlord claimed it had filed for bankruptcy and that this delayed any requirement to remove the violations and complete the MCI application.

The DRA then denied landlord's application in February 2019, since there was still one outstanding rent reduction order and the C violations remained on HPD's records. The DHCR noted that, despite landlord's claims that substantial progress was being made toward removing the C violations, there was little if any progress toward that. HPD's database still showed 45 "C" violations in February 2018. Landlord's claim that the U.S. Bankruptcy Code tolled the statutory time frames for curing the violations was unsupported.

Unger: DHCR Adm. Rev. Docket No. HO630002RO (1/28/22)[3-pg. document]