MCI Application Denied Due to Outstanding "C" Violations

Landlord applied to the DHCR for MCI rent hikes based on installation of a hot water heater supplier and hot water heater installer. The DRA ruled against landlord, finding that it failed to file the application within two years from completion of the installation, and failed to comply with multiple DRA notices requiring that landlord resolve 17 outstanding HPD Class "C" immediately hazardous violations, including 15 lead-based paint violations.

Landlord appealed and lost. Under DHCR policy in effect when landlord filed its MCI application on May 9, 2018, landlord included with its MCI application a statement that three non-lead-related C violations were pending at the building and also submitted an architect's affidavit that the three violations had been inspected and were found to have been corrected. The DRA then docketed and began processing the MCI application. On June 14, 2019, while the MCI application was pending, HSTPA took effect and amended rent law provisions to expand the class of violations a landlord was required to correct before an MCI increase could be granted. Hazardous, "B" violations also were now included. HSTPA also required that all such violations must be corrected before the final issuance of an MCI order, including violations issued after the MCI application filing date. The DRA duly notified landlord of these requirements before issuing a decision. There were outstanding lead-paint violations when the DRA denied landlord's application. That fact that landlord's submissions to HPD to attempt clearance of those violations were "without success" didn't alter the DRA's finding. Landlord's claim that its MCI application was timely didn't matter at this point, since multiple HPD Class "C" lead paint violations issued during the proceeding still remained on the HPD database when the DRA issued its ruling.

1475 Palace Too LLC: DHCR Adm. Rev. Docket No. JW630023RO (10/3/23)[4-pg. document]