Building Less Than 80% Vacant Wasn't Substantially Rehabbed

Landlord asked the DHCR for a ruling that its building was exempt from rent stabilization due to a substantial rehabilitation performed after Jan. 1, 1974. The DRA ruled against landlord, who appealed and lost. The DHCR found that landlord failed to show that the building was in substandard or seriously deteriorated condition before the sub rehab work was performed. This was required by DHCR Operational Bulletin 95-2 (OB 95-2), which states that the serious deterioration of a building is presumed when the building is at least 80 percent vacant of residential tenants. Here, landlord admitted that two of the six-unit building's tenants remained in occupancy during the sub rehab. So the building was only 66 percent vacant before the work started and while it was being done. In addition, landlord failed to establish that the work performed actually comprised a substantial rehabilitation. Landlord was required to show that at least 75 percent of the building-wide and apartment systems must have been completely replaced. Because the two occupied apartments weren't fully renovated, the 17 systems requiring complete replacement under OB 95-2 were completely replaced. 

217 India Realty LLC: DHCR Adm. Rev. Docket No. LV210026RO (2/6/24)[3-pg. document]