MCI Rent Hike Denied for Boiler/Burner

(Decision submitted by David A. Weinraub of the Manhattan law firm of Grad & Weinraub, LLP, attorneys for the tenants.)

Landlord applied for MCI rent hikes based on the installation of air conditioning equipment and a boiler/burner. The boiler/burner replaced a steam heating system. The DRA ruled against landlord, who appealed and lost. The DHCR’s long-standing policy was to disallow an MCI increase for a boiler/burner that replaces steam heat because the public utility providing steam heat has an unlimited useful life and therefore a new boiler/burner wasn’t required for the operation, preservation, or maintenance of the building. While landlord’s PAR was pending, the DHCR modified its policy in another case to find that the useful life of a steam heat system was 50 years. But, in this case, the steam heat system was only 36 years old. Landlord failed to prove that the claimed useful life of the heat exchanger and steam pressure-reducing equipment should be 25 years. Con Edison also disagreed with landlord’s claim that the boiler/burner was more energy efficient than the steam heating system and therefore was an energy conservation improvement. 

BLGD. Management Co., Inc.: DHCR Adm. Rev. Docket No. SA410049RO (3/8/17) [4-pg. doc.]