How to Get Rent Hike for Pointing/Waterproofing Work
You can easily spend thousands of dollars for pointing and waterproofing work. If you make this substantial expenditure with an eye toward getting a major capital improvement (MCI) rent hike, you don’t want the Division of Housing and Community Renewal (DHCR) to deny your application based on a technicality.
Unfortunately, many owners lose out on pointing and waterproofing MCI rent hikes for exactly that reason. They run into trouble with the rules that apply to MCI rent hike applications for pointing and waterproofing work. Here’s what you need to know to get your application granted.
Pointing and waterproofing are two different processes, although most owners have them done at the same time.
Pointing. This is the technique of repairing mortar joints between bricks or other masonry elements. When aging mortar joints crack and disintegrate, the defective mortar is removed by hand or power tool and replaced with fresh mortar. Often an entire wall, or even a whole structure, is pointed because defective points cannot easily be detected, and adjacent joints may also be in need of repair.
Waterproofing. Waterproofing is applying a sealing or covering material (such as silicone or waterproof cement) by brush or spray to the building’s exposed surfaces.
When Pointing/Waterproofing Qualifies for Increase
Here’s what’s required for pointing and waterproofing work to qualify for a rent hike:
Inspection first. Your contractor must first inspect the entire exposed surface of the building. Building-wide exterior repairs qualify as MCIs if performed on all areas found by a contractor to be needed after examination of all exposed sides of the building. In one case, an owner was disallowed an increase for facade work because the engineer’s report indicated that only some, but not all, of the exposed building walls were examined. So the DHCR disallowed the costs to repair the facade [398 E. 52nd Street: DHCR Adm. Rev. Docket No. VD430056RO (12/14/11)].
Work done where needed. The contractor must then point and waterproof those areas where needed. In one case, the tenants pointed out that work was done on only two floors on only two sides of the building. But it’s DHCR policy that the work qualifies as a major capital improvement where done as necessary on exposed sides of the building. The DHCR ruled that the work covered more than mere spot patching to repair current leaks or trouble spots. The owner also submitted a diagram and architect’s statement that all exposed sides of the building were examined before the pointing and waterproofing were performed [155 Wooster Street: DHCR Adm. Rev. Docket No. VH410054RO (10/4/12)].
“Comprehensive” work. Doing work where the contractor says it’s needed is only part of the equation. The work also must be what the DHCR calls “comprehensive.” You don’t have to point and waterproof 100 percent of the exposed surfaces. But you must do more than mere spot patching to repair leaks or trouble spots.
For example, when an owner applied for MCI rent hikes based on pointing and exterior renovation work, the District Rent Administrator (DRA) ruled for the owner in part, exempting some apartments due to continuing leaks. The owner and tenants both appealed. The tenants claimed that the work was unprofessional and incomplete. The owner claimed that the leaks had been corrected. The DHCR ruled for tenants and revoked the MCI rent hikes. The DHCR concluded that the waterproofing work wasn’t comprehensive because Department of Building (DOB) records showed that additional masonry repairs were needed just a few years after the work was done. To qualify as an MCI, pointing and exterior renovation work must be done in a workmanlike manner so that when completed the building remains free from water seepage for a reasonable period of time. Except for normal maintenance and repairs, the building facade should remain watertight for a 25-year useful life after the MCI is completed. As a result, the work wasn’t comprehensive [110 W. 86th Street: DHCR Adm. Rev. Docket Nos. VI430071RO, VJ430070RT (2/17/11)].
Useful life expired for previous work. If you get an MCI rent hike for pointing and waterproofing work, you must wait 15 years before you can get another MCI rent hike for this type of work. Fifteen years is the useful life of pointing work, according to the DHCR’s useful life schedule.
For example, suppose you got an MCI rent hike for pointing and waterproofing your building 10 years ago. Now, you point and waterproof again. You can’t get an MCI rent hike for the work. The useful-life rule applies, even if you do subsequent work on a different part of the building.
In one case, the DHCR denied an owner’s application for MCI rent hikes based on pointing and waterproofing. On appeal, the owner lost again. The 15-year useful life of the prior pointing and waterproofing work for which the owner received an MCI rent increase in 1999 hadn’t yet expired when the owner applied again in 2006. The owner claimed that the new work was done on a different part of the building. But the prior pointing and waterproofing was done to “all necessary areas” after landlord’s contractor examined all exposed facades of the building. This meant that there would be no need for pointing on any part of the building for the next 15 years [SP 141 E 33 LLC v. DHCR, 2/2/12].
In some instances you may obtain a waiver of the useful-life requirement. The owner must apply to the DHCR for such a waiver before starting the work for which he or she will be seeking an MCI rent increase. Where the waiver requested is for an item being replaced because of an emergency, which causes the building or any part of the building to be dangerous to human life and safety or detrimental to health, an owner may apply to the DHCR for such waiver at the time he or she submits the MCI rent increase application.
One reason why the DHCR may grant a waiver is that the item or equipment cannot be repaired and must be replaced during its useful life because of a fire, vandalism, or other emergency, or an “act of God” resulting in an emergency. If the waiver request is denied, the owner won’t be eligible for an MCI rent increase. If it is granted, the useful-life requirement won’t be a factor in the determination of eligibility for the MCI rent increase.
For example, one owner applied for MCI rent hikes based on pointing and waterproofing after 14.5 years from the last pointing and waterproofing job. The DRA ruled against the owner because this was less than the 15-year useful-life requirement for prior work. However, the owner won the appeal. The owner had requested a waiver of the useful-life requirement and pointed out that serious leak conditions made it impractical to wait another six months to perform the MCI [50 Yonkers Terrace: DHCR Adm. Rev. Docket No. YD910016RO (1/6/11)].
Submit Required Proof
To prove the cost of any MCI, you must submit a copy of the contract for the work as well as copies of cancelled checks to show you paid for the work. For pointing and waterproofing work, there are additional documents you must submit to the DHCR to get your application granted. Here’s what’s required:
1. Contractor’s affidavit. This is a sworn statement that the contractor must sign. In the affidavit, the contractor must state that he inspected all exposed sides of the building before starting the work and that he performed all necessary work. See our Model Affidavit: Submit Contractor Affidavit for Pointing and Waterproofing Work.
2. Diagram. You must also submit a diagram prepared by the contractor or another professional who’s familiar with the work that was done (such as an architect or engineer). The diagram must show the areas of the building where the contractor performed the work. It should be specific about the work’s location and the number of square feet covered.
If you don’t submit this extra proof, the DHCR will deny your application for an MCI rent hike.
Do Related Work to Increase Rent Hike
If you do related work in connection with the pointing and waterproofing, you may be able to include the cost of the related work in your MCI rent hike, even if it wouldn’t qualify by itself.
For example, when an owner applied for rent hikes based on pointing, the DHCR also granted a rent hike for the replacement of lintels and parapets. The tenants appealed, claiming that the lintel and parapet replacements didn’t qualify as MCIs. But the DHCR ruled against tenants. Since the pointing qualified as an MCI, and since the lintel and parapet replacements were done in connection with the pointing, these items also qualified for MCI rent hikes [220 W. 24th St.: DHCR Adm. Rev. Docket No. NG430073RT (1/24/06)].
See The Model Tools For This Article
|Submit Contractor Affidavit for Pointing and Waterproofing Work|