DHCR Properly Applied HSTPA Provisions to Pending MCI Rent Increase Application

Landlord applied for MCI rent hikes in June 2018 based on several improvements, including elevator upgrading, a new compactor, and a new TV/security system. The DRA ruled for landlord in part in February 2021. The DRA denied any increase for the compactor because the item wasn't listed on the Reasonable Cost Schedule issued by the DHCR in Operational Bulletin 2020-1. The DRA also applied HSTPA provisions, applying an updated amortization rate and new provisions concerning the new compactor.

Landlord appealed and lost. Landlord argued that HSTPA amendments to the Rent Stabilization Law shouldn't be applied to its application filed pre-HSTPA. Landlord claimed this was unconstitutional. But the MCI provisions in question didn't have a "retroactive effect" that impacted landlord's "substantive rights" because applying them to the pending application didn't impair rights landlord had when it acted, increase landlord's liability for past conduct, or impose new duties with respect to transactions already completed. The MCI provisions of HSTPA were different from the rent overcharge provisions revoked by New York's highest court because the rent overcharge provisions greatly increased the amount of overcharge liability a landlord could be responsible for. And rent regulation didn't confer "vested rights." There was no judgment or decision in place before the DRA decided landlord's MCI application. And if the legislature had meant for the new MCI rules to apply only to MCI applications filed on or after the HSTPA's June 14, 2019, effective date, language doing so would have been included. 

Richmond Hill 108 LLC: DHCR Adm. Rev. Docket No. JO130043RO (10/29/21)[4-pg. document]