Labor Costs for New Sidewalks Disallowed

Landlord applied for MCI rent hikes based on the installation of new sidewalks. The DRA ruled for landlord in part, but disallowed any rent increase for labor costs because the contractor was an officer and shareholder of the landlord corporation that owned the building. Landlord appealed, arguing that the DRA should have asked landlord for additional information and allowed the labor costs. The DHCR ruled against landlord. The DRA did send landlord a request for additional proof, including the dates on which the work was done, an itemized breakdown listing the employees used for the job on those dates, the number of hours worked, wage rates, and wages actually paid to the contractor's employees. Landlord did respond to the DRA's request, but the DHCR found that it didn't adequately prove the labor costs for the work done. Landlord didn't submit a sworn statement from the contractor, just a letter. Landlord stated that 112 days were spent on the job from April 10 to Nov. 30, 2006, and that two employees worked at a daily rate of $100 on an "intermittent basis" under a supervisor who was paid $300 per day. Landlord didn't indicate whether the employees were working under their regular compensation, or provide proof as to the number of hours, wages, and the time that the work was done. There were no employee time sheets, copies of canceled paychecks, or receipts for cash disbursements.

61 Main Street Corp.: DHCR Adm. Rev. Docket No. WC910019RO (8/27/08) [4-pg. doc.]