MCI Increase Revoked

The DHCR granted landlord's application for MCI rent hikes based on the installation of a new roof, front doors, and an intercom system. Tenants filed an Article 78 court petition, claiming fraud. They said that landlord's application was premature and incomplete, and that landlord misrepresented the installation dates and failed to prove its claimed costs. The court sent the case back to the DHCR for reconsideration. The DHCR then asked landlord to explain its relationship with the building's contractor and to submit all documents relating to the claimed cost for the improvements performed. In its original application, landlord had stated that there was no relationship between landlord and its contractors, but tenants showed that landlord and its roof contractor shared the same principal and address for service. Landlord didn't respond to the DHCR's request for additional information. Under DHCR Policy Statement 90-10, where a landlord doesn't disclose a relationship between the building owner and a contractor, landlord may be required to submit additional information. Since landlord failed to do so, the portion of the MCI granted for the roof work was revoked.

Alyssa Gray Realty, Inc./Various Tenants: DHCR Adm. Rev. Docket No. YF110004RP (3/16/12) [5-pg. doc.]