Landlord Fails to Prove Building Was Substantially Rehabbed

Landlord applied to the DHCR in 2019 for a ruling that its building was exempt from rent regulation due to substantial rehabilitation. The DRA ruled against landlord, who appealed and lost. Landlord bought the building in 2014 and claimed that the prior landlord had performed the work involved between October 2004 and January 2007 after the building became vacant. The DRA found that landlord didn't prove that 75 percent of building-wide and individual apartments systems had been replaced. Landlord didn't submit a full-scale copy of architectural plans approved by DOB, proof of payments, or a DOB cost affidavit (Form PW3) detailing the work approved by DOB. The DHCR wouldn't consider an architect's affidavit submitted for the first time with landlord's PAR. And, even if considered, the opinion of an architect, engineer, or contractor stating that the work was completed was insufficient, standing alone, to prove a substantial rehab. Landlord failed to adequately define the scope of the claimed work. Landlord submitted a statement by prior landlord that the work cost about $1 million. But combined DOB records indicated that the estimated job cost was only $729,000. So it was reasonable for the DRA to request invoices and cancelled checks as additional proof, which were not submitted. Photographs submitted also lacked evidentiary value since there was no accompanying statement as to who took the photos, when they were taken, or to otherwise authenticate them. And the photos didn't substitute for actual construction records, contractor invoices, and proof of payment. 

Zhu Young Corporation: DHCR Adm. Rev. Dckt. No. JS210019RO (10/27/21)[7-pg. document]