Landlord Can Submit More Information on Elevator Upgrade

Landlord applied for MCI rent hikes based on an elevator upgrade costing over $832,000. The DHCR ruled for landlord in part but disallowed $127,000 of landlord’s claimed costs. Landlord appealed. The court ruled against landlord, who appealed further. Landlord had upgraded three elevators and submitted with its application copies of the elevator modernization contract and cancelled checks. The DRA later asked for a cost breakdown for the three elevator installations and related expenses, as well as a scope of work, without any further instructions as to what information it was seeking. The appeals court ruled that the DRA’s request to landlord for a cost breakdown was reasonable, but that the DRA acted arbitrarily and capriciously in excluding certain costs claimed by landlord. The DHCR acknowledged that some of the items included for DOB filings, inspection, and miscellaneous work may have qualified and should have given landlord a further opportunity to submit information. The case was sent back to the DHCR for further fact-finding.

London Leasing Limited Partnership v. DHCR: 98 A.D.3d 668, 2012 NY Slip Op 06025 (App. Div. 2 Dept.; 8/22/12; Balkin, JP, Chambers, Hall, Austin, JJ)