No Proof Co-op Reserve Fund Was Used to Pay for MCI

Landlord, a cooperative corporation, applied for MCI rent hikes based on plumbing replacement. The DRA ruled for landlord. Tenants appealed. They claimed that landlord paid for the work out of the building's reserve fund, so no MCI increase was permitted. The DHCR ruled against tenants. Landlord and its accountant stated that the building's reserve fund was used up by 1985 to pay for prior improvements. All improvements since then were paid for by refinancing the mortgage or by operating surpluses. Tenants submitted no proof that landlord used a reserve fund to pay for the MCI. The building financial statements that tenants relied on were for periods predating the period when the plumbing replacement was performed.

274 West 95th Street: DHCR Adm. Rev. Docket No. RJ430063RT (8/5/10) [4-pg. doc.]