No MCI Increase for Architect Fees That Duplicated Engineering Fees

Landlord applied for MCI rent hikes based on installation of a parapet, as well as brick and structural steel work for an exterior restoration project. The DRA ruled for landlord in part, including the cost of engineering services but disallowing the cost of architectural fees.

Landlord and tenants both appealed and lost. Landlord argued that the DRA incorrectly found that the architectural services were duplicative of engineering services. Landlord also claimed that the effective date of the rent increase should've been the first rent payment after notice of the application had been sent to the tenants. But review of the executed contracts for both the architectural and engineering services showed that the scope of services for each was virtually identical. As to the effective date of the rent increase, DHCR policy in effect at the time the DRA's order was issued was that the effective date of an MCI rent increase couldn't precede the date that all documentation had been submitted. The DRA had to send landlord a number of requests for additional information to get essential information outlined in the application instructions. So the effective date of the rent increase was properly delayed.

Tenants claimed that the parapet work shouldn't qualify as an MCI because only a partial replacement of parapets was done, that the approved cost was excessive, and that the structural steel work wasn't properly documented. But the work done was a comprehensive exterior restoration project that was performed in order to comply with Local Law 11 of 1998. It was long-established DHCR policy that a building-wide comprehensive exterior restoration project, which may include pointing, masonry work, parapet work, copings, lintels, sills, etc., qualifies as an MCI for which a rent increase may be granted. And parapet work done as part of such project may be included as part of the MCI even if not all parapets had been completely replaced. The DHCR also found that the claimed cost wasn't excessive. And the structural work was properly documented. 

Garfield Property 9E LLC/Ratner: DHCR Adm. Rev. Docket Nos. GP410037RO, GP410051RT (10/14/22)[3-pg. document]