DHCR Upholds Application of HSTPA Modifications to MCI Application Pending on June 14, 2019

Landlord applied to the DHCR for MCI rent hikes based on plumbing repiping, rewiring, and roof door installation. The application was filed before June 14, 2019, when the HSTPA substantially amended MCI provisions of the Rent Stabilization Law. The DRA ruled for landlord and applied HSTPA provisions to the amount of rent increases approved.

Landlord appealed and lost. Landlord argued that its MCI application should've been decided in accordance with RSL provisions in effect when the application was filed and that instead it was improperly applied retroactively. The DHCR found that the DRA had correctly decided landlord's application. The DHCR found that the amended law affected only "prospective relief" and didn't have retroactive effect. Landlord didn't possess a right to an MCI rent increase while its application was pending, and didn't bear any increase in liability for past conduct as a result of the MCI amendments under the HSTPA, or have any new duties imposed with respect to a completed transaction. The DHCR also pointed out that since the passage of the HSTPA, courts have repeatedly upheld the DHCR's application of HSTPA Part K to pending MCI proceedings. This included a decision by the First Department appeals court in 2023. That court found that, "when the HSTPA was enacted, petitioner had no vested right in a future MCI rent increase or in the more beneficial pre-HSTPA law or regulations" and that application of the HSTPA "had no potentially problematic retroactive effect."

Unger: DHCR Adm. Rev. Docket No. KM230003RO (8/9/24)[4-pg. document]