1265. Maintenance and Operating Expenses
(A) Maintenance and operating expenses shall include all repair and reasonable maintenance and operating expenses for a unit of property, including self labor, except as provided in subsection (B) below. Repair and reasonable maintenance includes but is not limited to interior and exterior painting; plastering and replacing broken windows; replacement of drapes and carpets; cleaning; fumigation; routine landscaping; repair of all standard services, including electrical repairs, plumbing repairs and carpentry; and repair and replacement of furnished appliances.
(B) Maintenance and operating expenses shall not include the following expenses:
(1) avoidable expense increases since the base year;
(2) mortgage principal and interest payments;
(3) any penalties, fees or interest assessed or awarded for violation of the Ordinance or these regulations;
(4) organization or association dues or fees;
(5) legal and other costs for any evictions brought under Section 13(a) and (9) or (10) of the Ordinance;
(6) depreciation of the property;
(7) expenses for which the landlord has been reimbursed by any security deposit, insurance settlement, judgment for damages, agreed upon payments, or any other method including but not limited to a prior petition.
(C) Reasonable costs of capital improvements to rental property that cannot be recouped under Regulation 1267 because of failure to meet the minimum cost requirement shall be considered reasonable maintenance expenses under this section.
(D) Amortizable Maintenance, Repair and Operating Expenses.
(1) Any maintenance, repair or operating expense incurred in the comparison year or the fifteen calendar years preceding the comparison year, which results in a benefit which can reasonably be expected to extend over a period of more than twelve months, shall be treated as an amortizable operating expense. The amount of the expense shall be spread over the expected useful life ("amortization period") of the benefit. Amortization periods shall be set forth in a schedule approved by the Board. In any particular case, the amortization period on the schedule shall apply unless a different period is specifically found to be more appropriate. The amortization period shall begin at the time the useful life of the repair began or begins.
(2) The cost of an amortized maintenance, repair or operating expense shall include either: (a) the actual and reasonable amount of interest and other charges paid to the lender in connection with a loan taken to finance the operating expense, or (b), if a landlord has financed the operating expense with his own funds, an "imputed financing cost" equal to the costs the landlord would have incurred had the landlord financed the operating expense with a loan for the amortization period of the operating expense at an interest rate of ten percent (10%) per annum. In determining the cost of an amortized maintenance, repair or operating expense, no consideration shall be given to any additional cost incurred for increased property damage and/or deterioration resulting from an unreasonable delay in the undertaking or completion of any repair.
(3) At the end of the amortization period of such operating expense, the rent ceiling shall automatically be adjusted downward by the amount of the upward rent ceiling adjustment attributable to that expense.
(E) Reasonable expenses, fees, and other costs for professional services approved pursuant to Regulation 1248 shall be considered reasonable operating expenses under this section unless such expenses, fees or costs have already been the basis for temporary rent adjustments under Regulation 1248(A).
(F) Retroactivity of this Regulation. This regulation shall not be applicable to petitions properly filed with the Rent Board, pursuant to Regulation 1207, before August 12, 1995.
[Amended regulation published December 8, 1995]