Landlord Fails to Prove Building Was Substantially Rehabbed

Landlord asked the DHCR for a ruling on a building's rent regulatory status. Landlord claimed that the building was exempt from rent stabilization due to substantial rehabilitation. The DRA ruled against landlord, who appealed and lost. First, landlord failed to prove that the building was at least 80 percent vacant of residential tenants when the work commenced in 2016. Landlord submitted one buyout agreement and claimed that other tenants simply had moved out. Landlord's managing agent submitted a sworn statement that an additional floor was added to the building. Landlord now claimed that statement was "inadvertent" and incorrect. No DOB electrical applications, permits, or inspections were issued despite the scope of work landlord claimed, which would require these approvals. Landlord therefore failed to comply with all applicable building codes and requirements. Landlord's construction invoices and cancelled checks also were insufficient to prove substantial rehab. These records didn't prove that at least 75 percent of the building-wide and apartment systems were replaced. Landlord also failed to submit all DOB-approved architectural plans. Landlord also admitted in its application that neither work nor demolition was done in 50 percent or more of the building area.

852 Hart LLC: DHCR Adm. Rev. Docket No. IU210004RO (12/7/20) [8-pg. doc.]