Piecemeal Facade Work Doesn't Qualify as MCI

Landlord, the owner of unsold shares for 50 rent-stabilized apartments in a 338-unit building, applied for MCI rent hikes based on exterior restoration work. The co-op corporation that owned the building had contracted and paid for the work. Landlord paid assessments to the co-op to fund the MCI. The DHCR ruled against landlord, who filed an Article 78 appeal claiming that the DHCR's decision was unreasonable.

The court ruled against landlord. The work was done between January 2000 and February 2003. Landlord claimed that all needed pointing and waterproofing work was done at that time. But DOB records showed that additional facade renovation work was done in 2007 and 2008. This showed that the work completed in 2003 wasn't all the work necessary to make the building structurally sound and free from exterior seepage for a reasonable period of time. Landlord argued that the later work was simply maintenance work required to comply with the five-year cycle under Local Law 11 to ensure that the exterior masonry was sound, that the cost of the later work was insignificant, and that landlord didn't seek any additional MCI rent increase for the later work. But the DHCR's decision that the MCI work was piecemeal, didn't satisfy the useful life requirement, and didn't qualify as an MCI, was rational.

310 East 46 LLC v. DHCR: Index No. 100163/14, NYLJ No. 120271549361 (Sup. Ct. NY; 1/12/15; Schlesinger, J)