MCI Increase for Pointing/Waterproofing Reduced

Landlord applied to the DHCR for MCI rent hikes based on facade restoration that included pointing and waterproofing. The DRA ruled for landlord in part but disallowed the amount of the otherwise approved cost by a percentage of a previously approved MCI cost based on the remaining useful life of the exterior work for which the DHCR had granted a prior MCI increase. The DRA found that that the work previously approved hadn't outlived its 25-year useful life.

Landlord appealed and lost. Landlord argued that the full cost of the pointing and waterproofing more recently performed should be approved because the 15-year useful life requirement for the previously performed work had expired when the new work began. But, under established DHCR policy, the prior MCI rent increase granted in June 2001 wouldn't have been granted unless that installation had been a comprehensive exterior restoration project. The useful life of such project was 25 years, not 15 years. So, absent a valid useful life waiver, no MCI rent increase would be granted for subsequent pointing and waterproofing done within the 25-year useful life of the prior work. 

BSF Inwood Holding LLC: DHCR Adm. Rev. Docket No. KQ410019RO (9/26/23)[2-pg. document]