Was Building Substantially Rehabilitated?

Landlord asked the DHCR to rule on whether his building was subject to rent regulation. Landlord pointed out that, in a prior proceeding, the DRO had dismissed a tenant rent overcharge complaint because evidence indicated that the building was newly constructed in 1986 and therefore not subject to rent stabilization. But the DRO now ruled that the building was rent stabilized because (a) it no longer had the file for the prior proceeding; and (b) landlord provided no additional proof as to the rent regulatory status of apartments in the building. The DRO found that the building was built prior to Jan. 1, 1974, and contained 12 apartments. Although there were HPD records indicating a 1984 “Repair Agreement for Vacant Buildings,” there was no proof that the building had been substantially rehabilitated.

Landlord appealed and lost. Landlord claimed that the building was vacated by city order in 1981 as unsafe. Landlord bought the building in 1984 and performed a gut rehabilitation and a C of O was issued in 1989 after the work was completed. But the DRO properly disregarded the prior order and landlord’s proof of substantial rehabilitation was insufficient. And any attempt by the DHCR to determine whether at least 75 percent of building-wide and apartment systems had been completely replaced would require deciphering of landlord’s information, which the DHCR would not do. Landlord should file an Exemption Application, following the DHCR’s instructions and guidelines, so that the DHCR could properly determine the building’s regulatory status. 

Ahmad: DHCR Adm. Rev. Docket No. DO210037RO (2/5/16) [4-pg. doc.]