Useful Life Waiver Request Was Untimely

Landlord applied for MCI rent hikes based on exterior restoration, including pointing and waterproofing. The DRA ruled for landlord in part but reduced the amount of the approved cost by a percentage of a prior MCI cost because the prior work hadn't outlived its 25-year useful life. Landlord and tenants both appealed.

Landlord claimed that the approved MCI increase should include the full cost of the pointing and waterproofing done under its current application. The DHCR ruled against landlord. A prior MCI increase for exterior work had been approved by DHCR in 2001. Under DHCR policy, that prior work was approved as a comprehensive exterior restoration project consisting of pointing and waterproofing along with all other necessary work at the time for a complete building exterior restoration. The useful life of that project was 25 years. So, absent a useful life waiver, an MCI rent increase can't be granted for subsequent pointing and waterproofing done within the 25-year useful life of the prior work. 

Tenant argued that the useful life waiver request submitted by landlord shouldn't have been approved by the DHCR. The DHCR agreed. Landlord didn't submit this request before filing its MCI application and demonstrated no emergency condition that warranted acceptance of such request with the MCI application filing. So, the DHCR revoked the MCI rent increases granted by the DRA.

BSF Inwood Holding LLC/Perez: DHCR Adm. Rev. Docket Nos. KR410004RO/KR410010RT (7/25/23)[3-pg. document]