Landlord Wants to Build Exercise Room

Landlord wanted to create a community room and roof deck from existing rooftop space, plus an exercise room in a basement area that had been an old coal room. Landlord asked the DHCR if the proposed facilities would become required services, whether fees charged initially for the use of these facilities would become subject to rent regulation, and whether landlord could limit use of these facilities to tenants who paid the extra fees. Presumably, no existing required services were eliminated or modified by adding these rooms. In an opinion letter, the DHCR pointed out that under the Rent Stabilization Code, added recreational facilities would become required ancillary services. Initial charges for using the facilities wouldn't be regulated if they were billed separately. If the facilities were primarily for the use of tenants and not provided by an independent contractor, the initial fees would become subject to rent regulation. Landlord could limit use of the facilities to tenants who paid for them, but couldn't require existing tenants or new tenants to pay for the ancillary service as a condition for renting an apartment, and couldn't make tenants renew ancillary service agreements if provided by a separate lease or agreement. If fees for the use of the community and exercise rooms were included in tenant's lease, and tenant didn't want to continue the service upon lease renewal, landlord couldn't unreasonably withhold consent to tenant to sublet the use of the facility. The DHCR noted also that under Real Property Law Section 230(2), tenant organizations were entitled to use a building's community room for tenant meetings without paying a fee.

DHCR Opin. Ltr. by Charles Goldstein (8/24/99) [3-pg. doc.]