MCI Increase Reduced for Six Years to Offset Loss of Prior MCI

Landlord applied for MCI rent hikes based on resurfacing of exterior walls and installation of apartment windows. The DRA ruled for landlord in part but disallowed any increase for the exterior walls based on a prior MCI increase granted in 1993 for resurfacing. Landlord requested reconsideration, arguing that the prior MCI increase wasn’t for the same work. The DRA reconsidered but found insufficient proof that the earlier MCI increase wasn’t for exterior resurfacing. But the DRA modified the approved the MCI amount so as to include a portion of the eligible exterior resurfacing costs minus the cost of the 1993 MCI.

Tenants and landlord both appealed and lost. Both sides then filed Article 78 appeals, and the DHCR took the case back for reconsideration. The DHCR then found that the new installation was sufficiently different from the prior installation that no useful life waiver was needed, but that, to the extent there may be overlap, there should be no duplicate rent increase. Tenants weren’t receiving the benefit of the first MCI for six years as the brickwork that had been pointed was completely replaced. So, during the first six years of the second MCI, the initial MCI increase would be deducted from rent increases due on the second MCI.  

60 East 12th Street Tenants Association/12 Broadway Realty LLC: DHCR Adm. Rev. Docket No. CX410001RP (12/14/16) [5-pg. doc.]