New York State
Division of Housing and Community Renewal
Office of Rent Administration
Gertz Plaza, 92-31 Union Hall St.
Jamaica, New York 11433
Public Information: (718)739-6400


POLICY STATEMENT 89-9

SPONSOR REPRESENTATIONS, IN COOPERATIVE OR CONDOMINIUM OFFERINGS,
TO BEAR COST OF MCIs: EFFECT ON ENTITLEMENT TO MCI INCREASES

The Rent Stabilization Code Section 2522.4(a)(9) states that DHCR
shall not grant a Major Capital Improvement (MCI) application, to
the extent that, after a plan for the conversion of a building to
a cooperative or condominium ownership is declared effective,
such improvement is paid for out of the cash reserve fund of the
cooperative conversion or condominium association. Nothing in
this paragraph (9) shall prevent an owner from applying for, and
the DHCR from granting an increase for such improvement to the
extent that the cost thereof is otherwise paid for by an owner.

The DHCR has several MCI applications from sponsors of converted
buildings in which the offering plan states that an improvement
or improvements will be made at the sponsor's sole expense" or
cost and expense". The agency has received correspondence from
the State of New York Department of Law stating, This
representation can only be interpreted to mean that no
non-purchasing tenant would bear any responsibility" for the
improvement.  The Department of Law regards the owner who makes a
statement such as this in an offering plan as ineligible to
recover the cost of the subject improvement in an MCI increase

After reviewing the applications along with the offering plans,
the Division of Housing and Community Renewal concurs with the
Department of Law's interpretation of the phrase sole cost and
expense . Any MCI application for a cooperative or condominium
converted building, where the offering plan includes this (or
similar) language without additional exclusionary language
relating to an MCI application, will be denied to the extent that
the costs for the improvements mentioned are included in the
application.


August 28, 1989

Elliot G. Sander
Deputy Commissioner

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DHCR Policy Statements are **promulgated** (i.e., officially
issued) by the New York State Division of Housing and Community
Renewal (DHCR) and represent **official** policy of the agency.

The agency is generally obligated to follow the policy contained
in these and other documents or provide a rational for deviation;
failure to follow the law, policy or practice may form the basis
for an appeal. Electronic versions of the documents on TenantNet
are for informational purposes only and there is no guarantee
they will be accepted by any court (or even DHCR) as true copies
of DHCR policy. The reader is advised to obtain true copies of
these documents from DHCR. Also see DHCR Advisory Opinions,
DHCR Operational Bulletins, the Rent Stabilization Code, the Rent
Stabilization Law and various Rent Control Statutes.

Every attempt has been made to conform to the original Policy
Statements as issued by DHCR; TenantNet makes no
representation the enclosed material is current or will be
applied as written.  The reader is advised that DHCR often fails
to properly apply, interpret or enforce housing laws.  Since
housing laws are complex and often contradictory, it is
recommended the reader obtain competent legal advice from a
tenant attorney or counseling from a tenant association or
community group. (rev. 3/13/96) DHCR documents
are public documents; the electronic version of such documents
have been developed by TenantNet and any added value, enhancements
and/or proprietary features are copyright 1994, 1995 and 1996 by
TenantNet. These documents may be freely distributed provided they
remain intact as herein presented, including this and the top
informational banner referencing TenantNet as the original provider.
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For more information or assistance. call the DHCR Rent Infoline
at (718) 739-6400, or visit your Borough Rent Office.

Queens Central Office
92-31 Union Hall St. 4th Fl.
Jamaica, NY 11433
(718) 739-6400

Bronx
One Fordham Plaza
Bronx, NY 10458
(718) 563-5678

Brooklyn
250 Schermerhorn St.
3rd Floor
Brooklyn, NY 11201
(718) 780-9246

Lower Manhattan
156 William Street
9th Floor
NY, NY 10038
(212) 240-6011, 6012
South side of 110th St. and below

Upper Manhattan
163 W. 125th St.
5th Floor
NY, NY 10027
(212) 961-8930
North side of 110th St. and above

Staten Island
350 St. Mark's Place
Room 105
Staten island, NY 10301
(718) 816-0277

Nassau County District Rent Office
50 Clinton Street, 6th Floor
Hempstead, NY 11550
(516) 481-9494

Westchester County District Rent Office
55 Church Street, 3rd Floor
White Plains, NY 10601
(914) 948-4434

Rockland County District Rent Office
94-96 North Main St.
Spring Valley, NY 10977
(914) 425-6575

Albany Regional Office
119 Washington Avenue
Albany, NY 12210
(518) 432-0596

Buffalo Regional Office
Ellicot Square Building
295 Main St., Room 438
Buffalo, NY 14203
(716) 856-1382
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