Landlord Must Submit Copies of Subcontracts

Landlord applied for MCI rent hikes after renovating its building. Landlord submitted various documents to support its application, including a copy of the contract with the general contractor and proof of payment to him. The DRA asked landlord to submit copies of subcontracts. When landlord didn't, the DRA denied its application. Landlord appealed, arguing that it shouldn't be required to submit copies of subcontracts because the general contract had proved the cost of the work performed. The appeals court ruled that landlord should have submitted the sub- contracts, and sent the case back to the DHCR to give landlord a chance to do so. The contract of the general contractor didn't give a detailed breakdown of the cost of the MCIs as opposed to the cost of repairs. The subcontracts could show the reasonableness of the contractor's expenses, and insure that these expenses weren't shifted from repairs, which aren't eligible for MCI rent hikes, to improvements, which do qualify.

Matter of Maxwell-Kates: NYLJ, p. 22, col. 3 (8/23/93) (App. Div. 1 Dept.; Sullivan, JP; Rosenberger, Asch, Rubin, JJ).