Painting of New Garage Disallowed from Approved MCI Costs

The DRA partially granted landlord's MCI rent increase application for installation of a garage roof and related costs for the underground garage roof and surface parking lot. Landlord appealed and claimed, among other things, that the DRA improperly disallowed costs for painting and sidewalk replacement. The DHCR again denied any MCI increase for painting but reinstated mistakenly disallowed costs for DOB filing fees after landlord verified that it didn't seek an MCI increase for those fees. Landlord then filed an Article 78 court appeal, seeking further modification of the MCI order. The court sent the case back to the DHCR for reconsideration. Landlord claimed that the DHCR improperly disallowed the cost of painting the newly constructed garage roof and walls. But, under long-standing DHCR policy, painting was considered ordinary repair and maintenance, and the cost was properly disallowed. And the painting wasn't necessary work directly related to the qualifying garage roof MCI.  

Kyoto Leasing LP, Singapore Leasing LP, Bali Leasing LP & Mandalay Leasing LP: DHCR Adm. Rev. Docket No. HM110014RP (5/24/19) [7-pg. doc.]