Landlord Repaid Money to Co-op Reserve Fund

(Decision submitted by Jack Kuttner of the Manhattan law firm of Kucker Kraus & Bruh, attorneys for the landlord.) Landlord applied for MCI rent hikes based on building rewiring. The DRA ruled against landlord because landlord paid for the MCI out of the cooperative corporation's reserve fund. Landlord was the sponsor and holder of unsold shares of the co-op. Landlord appealed. Landlord had borrowed $88,000 from the reserve fund, paid $80,000 for the MCI and repaid $80,000 to the reserve fund in October 1993. A bank letter verified this. Landlord also argued that nothing in the rent stabilization regulations barred this practice. The DHCR ruled for landlord. The fact that another $8,000 wasn't repaid to the reserve fund wasn't sufficient reason to completely deny landlord the MCI rent increases. The DHCR approved rent increases based on an $80,000 cost.

Englander: DHCR Adm. Rev. Dckt. No. IJ 230090 RO (6/5/95) [4-page document]