Landlord Proved Substandard Building Was Substantially Rehabbed

Landlord asked the DHCR to determine whether its building had been substantially rehabilitated. The DRA ruled for landlord, finding that at least 75 percent of the building-wide and apartment systems were replaced in accordance with DHCR Operational Bulletin 95-2. The building therefore was exempt from rent stabilization under Rent Stabilization Code Section 2520.11(e).

Tenant appealed and lost. It was uncontested that the six-unit building was at least 80 percent vacant at the time of the work. The building therefore was presumed to have been substandard or seriously deteriorated at that time. The owner submitted sufficient proof—including a contractor’s letter, invoices, an architect’s certification, and permits—that the following systems were replaced: plumbing, heating, gas supply, electric wiring, windows, roof, interior stairways, kitchens, bathrooms, floors, ceilings and walls, pointing or exterior surface repair as needed, doors and frames, and intercoms. DOB also had issued a vacate order on June 4, 2009, stating that a total gut renovation of the building was in progress and that there were unsafe conditions at the building. DOB stated, in letters of completion dated Jan. 3, 2013, that a new Certificate of Occupancy wasn’t required for the work. Any question tenant had about DOB’s ruling must be addressed to DOB. Landlord replaced 14 of the 15 building-wide and apartment systems, or 93.3 percent. Landlord also submitted before and after photographs showing the building’s condition.

Fisher: DHCR Adm. Rev. Docket No. DT210040RT (5/18/16) [17-pg. doc.]