MCI Rent Hike Granted for New Absorption Chiller in Central A/C

Landlord applied to the DHCR for MCI rent hikes based on an absorption chiller replacement. The DRA ruled for landlord. Tenant appealed and lost. Tenant claimed that the useful life of a prior chiller installation hadn't expired. He said the DHCR granted a prior MCI rent hike for a chiller installed in 1999. But the DHCR's records showed that the chiller replacement began in January 2015, more than 15 years after the prior chiller installation was completed on March 15, 1999. So the 10-year useful life of the prior chiller had expired. The DHCR's position is that the installation of a new absorption chiller is a major component of a building's central air conditioning system and therefore qualifies as an MCI. The expected useful life of a central air conditioning system is 15 years. And additional components of the newly installed chiller system, such as the system's oil storage tank and attached steel chimney weren't included with the prior chiller. Landlord didn't seek MCI rent hikes for these additional components.

Newman: DHCR Adm. Rev. Docket No. GO410001RT (10/21/19) [3-pg. doc.]