Cellar Vault Restoration Doesn't Qualify as MCI

November 22, 2020

LVT Number: #31081

Landlord applied for MCI rent hikes based on cellar vault restoration. The DRA ruled against landlord, finding that this work didn't qualify as an MCI. Landlord appealed and lost. It's the DHCR's well-established position that vault restoration constitutes repair and maintenance and is ineligible for MCI rent hikes unless performed in connection with a qualifying, related MCI such as complete replacement of all beams and foundations or the installation of a new entryway. There was no such related work done in this case.

Landlord applied for MCI rent hikes based on cellar vault restoration. The DRA ruled against landlord, finding that this work didn't qualify as an MCI. Landlord appealed and lost. It's the DHCR's well-established position that vault restoration constitutes repair and maintenance and is ineligible for MCI rent hikes unless performed in connection with a qualifying, related MCI such as complete replacement of all beams and foundations or the installation of a new entryway. There was no such related work done in this case. The fact that the cellar vault restoration may be classified as a capital improvement for NY State tax purposes and/or was done to prevent significant damage to the building didn't make it an MCI under the requirements of Rent Stabilization Code Section 2522.4(a)(2).

137 Duane Holdings, LLC: DHCR Adm. Rev. Docket No. FU410014RO (10/7/20) [2-pg. doc.]

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