Landlord Can't Prove Building Was Substantially Rehabbed

Landlord applied to the DHCR in November 2018 for a ruling that its building was exempt from rent stabilization based on substantial rehabilitation. The DRA ruled against landlord, who appealed and lost.

Among other things, the DRA found that landlord failed to submit a copy of DOB-approved architectural plans despite DRA's request. Landlord also failed to submit a copy of the "PW3" Cost Affidavit, DOB Letter of Completion, and/or new Certificate of Occupancy (C of O).

In its PAR, landlord admitted that the PW3 cost affidavit was mistakenly omitted from its application and now submitted that form. But the DHCR wouldn't consider that document for the first time on appeal. And even if DHCR considered landlord's PW3, that document estimated that the work cost $181,660. Landlord claimed in its application that the work cost $570,000. The PW3 cost affidavit also described the work as "interior renovations" costing $134,860 and installation of plumbing fixtures costing $46,800. The PW3 didn't outline replacement of 75 percent of building systems as required by the DHCR for consideration that a building had been substantially rehabilitated.

Landlord's DOB work permit application also answered "no" to the question of whether landlord was performing work in 50 percent or more of the building's area or demolishing 50 percent or more of the area of the building.  Landlord's before and after photographs and the 2015 DOB Letter of Completion issued for the work also didn't encompass the extent of work needed for substantial rehabilitation. 

1046 Realty LLC: DHCR Adm. Rev. Docket No. IO210055RO (10/6/20) [10-pg. doc.]