Engineer Consultant Fee Included in MCI Increase

(Decision submitted by David L. Hamill, of counsel to Judith M. Brener, Esq., who represented the landlord.)

Landlord applied for MCI rent hikes based on the installation of a new boiler-burner and water tank. The DHCR ruled for landlord in part but disallowed any increase for engineer consultant fees, finding that the engineer's work was administrative, supervisory, and duplicated what contractors would have done. Landlord filed an Article 78 court appeal and argued that the DHCR's decision was arbitrary and unreasonable. The court ruled against landlord, but the appeals court reversed. The two-building complex contained 150 rent-stabilized apartments. The engineer was hired to conduct a heating load analysis of the complex, design the new heating system, select the new equipment, solicit and approve contractor bids, obtain all applicable permits, and review and inspect the contractors' work to ensure compliance with drawings and specifications. The DHCR departed from its own precedent without any meaningful explanation. The court approved the addition of the $17,900 engineer consultant's fee to the cost of the MCI.

Sol Goldman Investments, LLC v. DHCR: 2015 NY Slip Op 00216, 2015 WL 59075 (App. Div. 1 Dept.; 1/6/15; Mazzarelli, JP, deGrasse, Manzanet-Daniels, Feinman, Gische, JJ)