No MCI Increase for Elevator Upgrade

Landlord applied to the DHCR for MCI rent hikes based on elevator upgrading. The DRA ruled against landlord, who appealed and lost. The elevator upgrade was performed before the 25-year useful life of the prior elevator upgrading had expired. The DHCR had in fact approved a prior MCI rent increase for an elevator upgrade 18 years earlier, in 1999.

Landlord argued that the prior MCI rent increase was for a much more limited upgrade of the elevator system, and that the DRA should have informed landlord of the 1999 upgrading and requested an explanation for the necessity of the 2017-2018 work. Landlord claimed that the DRA could have deducted the cost of the prior upgrade from the total cost of the new work rather than disallow any increase. Landlord also submitted with its PAR an elevator consulting firm's opinion that the two passenger elevators in question were built 50 years ago and that the cost of replacement parts would now be prohibitive.

But landlord didn't request a waiver of the useful life requirement, either before filing its MCI application or on an emergency basis at the time it filed its application. It wasn't the DRA's responsibility to ask landlord if it sought a waiver. And the DHCR wouldn't consider landlord's claim, made for the first time on appeal, that the work was done to prevent hazardous conditions and to comply with Local Law 141. 

The Surrey LLC: DHCR Adm. Rev. Docket No. HS110007RO (8/19/22)[2-pg. document]