Effective Date of MCI Rent Hikes Delayed

Landlord applied for MCI rent hikes in 2007 based on a number of improvements. The DRA disallowed any increase for elevator upgrading but granted MCI rent increases for new doors, a new TV/security system, new remote phone system, boiler/burner replacement, and burner-related asbestos removal. Landlord appealed to dispute the effective date of the MCI rent increases, which the DRA set as April 1, 2012. When landlord filed its MCI application, it claimed that no commercial space benefitted from the MCIs. Landlord initially listed a 630 square foot space occupied by a dry cleaning business in the commercial deduction portion of the MCI application but later amended the filing to state that the commercial space had been vacated and demolished. Landlord also later stated that none of the new commercial space added to the building since the MCI filing date benefitted from the MCI installations in any way.

But DHCR inspection revealed that the building contained a laundry that benefitted from the MCIs. In response to further questioning, landlord advised the DRA that the laundry room contained 522 square feet. So there was no error by the DRA in setting the effective date of the MCI rent hike as April 1, 2012, the first rent payment date after landlord completed the application by submitting required information concerning the square footage of the commercial laundry room. Under longstanding DHCR policy, landlord's application was fundamentally flawed until completed. 

SP 10 Downing LLC: DHCR Adm. Rev. Docket No. AU430017RO (8/3/18) [2-pg. doc.]