MCI Application Proceeding Reopened for Landlord to Submit Reasonable Cost Waiver Request

Landlord applied to the DHCR for MCI rent hikes based on installation of a Reduced Pressure Zone (RPZ) backflow prevention device. The DRA ruled against landlord based on landlord's failure to submit a waiver request of the DHCR's Reasonable Cost Schedule. Landlord appealed, and the case was reopened. Landlord's claim that the DHCR didn't afford notice or time to cure its omission was without merit because, since 2020, DHCR Operational Bulletins all provided sufficient notice to owners that the Reasonable Cost Schedule and its related procedures would apply to MCI applications and that failure to comply would result in denial of an application. It didn't matter that the MCI here was "not so complex." This had no bearing on the requirement to submit the waiver request as the DRA had requested.

However, the DHCR's first full annual update to the 2021 Reasonable Cost Schedule was published shortly after landlord's application was denied in October 2021. In January 2022, the DHCR issued a Reasonable Cost Schedule update that established a cost limit for backflow prevention devices for the first time. If landlord's application had still been pending at that time, no reasonable cost waiver request would've been needed since there was now a reasonable cost listed for this item. RSC Section 2522.7 permits the DHCR to consider all factors bearing upon the equities involved. So, the DHCR sent the case back for further consideration by the DRA.

1056 Kinahara LLC: DHCR Adm. Rev. Docket No. JN10021OM (5/7/24)[4-pg. document]