Landlord Acted as Own Contractor

July 31, 2004

LVT Number: 17486

Landlord applied for MCI rent hikes based on the installation of a new roof. The DRA ruled for landlord in part. The total cost of the improvement was $12,000. The DRA allowed a rent hike for the $4,200 cost of materials but disallowed any other rent hike because landlord acted as his own contractor. Landlord appealed and lost. Under DHCR policy, when landlord acts as his own contractor, there is no arms-length transaction, so the DHCR must carefully scrutinize the situation. Here, there was no outside proof of landlord's labor costs.

Landlord applied for MCI rent hikes based on the installation of a new roof. The DRA ruled for landlord in part. The total cost of the improvement was $12,000. The DRA allowed a rent hike for the $4,200 cost of materials but disallowed any other rent hike because landlord acted as his own contractor. Landlord appealed and lost. Under DHCR policy, when landlord acts as his own contractor, there is no arms-length transaction, so the DHCR must carefully scrutinize the situation. Here, there was no outside proof of landlord's labor costs. Landlord submitted only affidavits from himself and his employees.

O'Neill: DHCR Adm. Rev. Dckt. No. PK110061RO (6/1/04) [3-pg. doc.]

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