Health Club Run by Independent Contractor

Landlord was constructing a new building that would be subject to rent stabilization. Landlord intended to install some type of health club or gym in the building. Before opening the health club, landlord would lease the club to an independent operator. The operator would charge tenants a fee to join the club. Landlord asked the DHCR if the health club would be a required service under these circumstances. In an opinion letter, the DHCR said no. The health club would become a required, ancillary service subject to rent stabilization if landlord operated it directly on the base date or at any time thereafter. Since landlord intended to lease the club to an independent operator from the outset, it would not be subject to stabilization as long as it stayed independently operated.

DHCR Opin. Ltr. by Charles Goldstein (4/15/02) [4-pg. doc.]