Windows Paid for with ‘Surplus' Insurance Proceeds

Landlord cooperative corporation applied for MCI rent hikes based on the installation of new windows building-wide. The DRA denied landlord's application because the installation wasn't paid for by a special assessment upon all co-op shareholders. Instead it was paid for with the proceeds of a fire insurance settlement and operating fund. Landlord requested reconsideration, pointing out that the fire insurance settlement was for damages to an elevator shaft. Landlord then used the leftover insurance money to pay for the windows. The DRA reversed and granted landlord's application. Tenants then appealed, and the DHCR denied tenants' PAR. Landlord paid for the windows with surplus insurance proceeds, after it completed all repairs resulting from the elevator shaft fire. This money became part of the building's general operating funds. Landlord could have distributed the surplus to all co-op shareholders and later assessed them a charge to pay for the windows. The result would be the same; landlord would still be entitled to MCI rent increases.

[3260 Netherland Avenue: DHCR Adm. Rev. Dckt. Nos. FF 630068-RT, EE 630079-RO (12/23/92)]. 4-page document.