New Fence Doesn't Qualify

Landlord applied for MCI rent increases based on a number of improvements, including a new fence. The DRA ruled against landlord, and landlord appealed. Landlord argued that since the village of Larchmont had required installation of the fence for the safety and health of tenants, it was a necessary capital improvement. The DHCR ruled against landlord. The fact that a service is a legal requirement, is new, is for safety reasons, or eliminates a dangerous or hazardous condition doesn't by itself make the improvement an MCI. The new fence, steps, railing, fire-proofed steel in the garage, and garage lights installed by landlord weren't needed for the preservation and maintenance of the building, weren't building-wide structural changes or replacement of major building systems, and weren't depreciable under the Internal Revenue Code as anything more than ordinary repairs.

Park Plaza Realty Co.: DHCR Adm. Rev. Dckt. No. FL 930124 RO (5/26/95) [2-page document]