New Burner Was Required by Law Before Useful Life of Old Burner Expired

Landlord applied to the DHCR for MCI rent hikes based on installation of a new boiler and burner. The installation involved a conversion of the building's heating system from #6 fuel oil to #2 fuel oil and gas. The DRA ruled for landlord.

Tenants appealed and won, in part. Among other things, tenants claimed that the old burner hadn't exhausted its useful life and that landlord's useful life waiver request wasn't filed before landlord filed its MCI application.

A prior MCI rent increase was approved for a new oil tank and burner in 2000, based on work completed in 1999. So, when installation work for the new burner began in 2014, 15 years of the prior burner's 20-year useful life had expired. Since the new installation involved a conversion from #6 fuel oil to gas/#2 fuel oil in order to comply with NYC's new fuel regulation, and since more than 50 percent of the prior burner installation's useful life had expired, the DRA was correct to grant an MCI increase for the new burner installation. However, the DHCR found that the DRA erred by not reducing the approved amount of the MCI burner cost to reflect a proration of the 1999 burner installation previously granted by the DHCR in 1999. The resulting MCI rent increase was reduced from $10.83 to $10.56 per room per month.

Various Tenants of 173 W. 78th St.: DHCR Adm. Rev. Docket No. GN430003RT (2/7/23)[4-pg. document]