Fuel Storage Tank Using #6 Fuel Oil Qualifies as MCI

Landlord applied for MCI rent hikes based on the installation of a fuel storage tank. The DRA ruled against landlord, who appealed and won. Generally, installations of boilers or burners using #6 fuel oil won't be approved by the DHCR as an MCI because DEP regulations limit the type of fuel boilers and/or burners can use. But, here, the DOB issued a Certificate of Approval for Oil Burning Installation for the landlord’s fuel tank to use #6 fuel oil after DEP regulations went into effect. Landlord also submitted a Certificate of Operation, issued after DEP’s regulations went into effect, showing that #6 fuel oil was being used at the building. Landlord also stated that the fuel tank didn’t need to be modified if conversion to another fuel type was necessary. DEP and DOB adopted a program in May 2011 to implement regulations to discontinue the use of #6 fuel oil in boilers. The program allowed existing boilers to use #6 fuel oil until 2015. In this case, landlord installed a new fuel oil tank, not a boiler, and DOB issued the Certificate of Approval to operate the fuel oil tank in December 2011. Since a fuel oil tank is considered an MCI and because the fuel oil tank installation was allowed by DOB for its use at the time of the MCI application, the DHCR ruled that the MCI increase should be granted.

Portland Leasing LLC: DHCR Adm. Rev. Docket No. BM210020RO (6/3/16) [3-pg. doc.]