No Substantial Rehab Exemption Without DOB Letter of Completion

Landlord applied to the DHCR for a ruling that its building was exempt from rent stabilization due to substantial rehabilitation after Jan. 1, 1974. Landlord claimed it spent over $1 million to gut-renovate the building between 2015 and 2016. The DRA ruled against landlord, who appealed and lost. The DRA had granted landlord's nine requests for additional time to submit requested documentation. Landlord never submitted a DOB Letter of Completion or other necessary proof. The DOB Letter of Completion signifies that the work and new building systems comply with applicable building codes, an essential element of substantial rehabilitation. The written opinion of an architect, engineer, or contractor stating that the work was completed is insufficient to satisfy this requirement. Landlord claimed that DOB was conducting an audit and therefore it hadn't yet obtained the Letter of Completion. But this could result in revocation of DOB permits and was further proof that landlord's application to the DHCR should not have been granted. Landlord could reapply for a DHCR ruling in the future. But, until and unless DHCR determines that the building is exempt, the building remains rent stabilized.

1509 Pacific Residences, LLC: DHCR Adm. Rev. Docket IO210016RO (8/12/20) [8-pg. doc.]