Landlord Didn't Show That 75 Percent of Building Systems Were Replaced

Landlord applied to the DHCR for a ruling that its building was exempt from rent regulation based on substantial rehabilitation. The DRA ruled against landlord, finding that landlord hadn't proved that the building was substandard or seriously deteriorated when the work commenced, and that landlord hadn't submitted sufficient evidence that at least 75 percent of building-wide and individual apartment systems were completely replaced.

Landlord appealed and lost. The DHCR pointed out that, since the work was completed and landlord's application was filed prior to issuance of Operational Bulletin 2023-3, the DHCR's Operational Bulletin 95-2 and the pre-Nov. 8, 2023, version of RSC Section 2520.11(e) applied to landlord's application. 

The building had no elevators, so landlord had to show that at least 12 of the 16 remaining systems were replaced or made as new in order to satisfy the 75 percent requirement. Landlord submitted invoices, proposals, and proof of payment for complete replacement of the intercom system, doors, windows, kitchens, bathrooms, plumbing, ceilings, and wall surfaces in common areas and in apartments. So landlord had shown complete replacement of only seven systems. Documentation for work done on three other building systems was only partial, and still didn't add up to 12 systems.  

1819 Grove LLC: DHCR Adm. Rev. Docket No. MR110021RO (10/9/24)[6-pg. document]