Tenants Can't Prove MCI Was Paid for by Co-op Reserve Fund

Landlord applied for MCI rent hikes based on elevator upgrading. The DRA ruled for landlord. Tenants appealed and lost. Tenants claimed that the upgrade was unnecessary, that it was performed without tenant permission, that it may have been paid for out of the cooperative building’s reserve fund, and that the cost was in excess of industry standards. The DHCR pointed out that the work qualified as an MCI, that tenant permission was unnecessary, that MCI increases were based on the actual proven cost, and that only three of the six tenants who appealed had answered the DRA’s notice of the MCI application. So, only these appeals would be considered. Before the DRA, landlord provided information showing that the elevator upgrade was paid for by funds from mortgage refinancing and by a special assessment of shareholders. So landlord didn’t use reserve funds to pay for the MCI. Tenants presented no proof to the contrary.

Baez: DHCR Adm. Rev. Docket No. CQ430048RT (5/11/16) [2-pg. doc.]