MCI Rent Hike Delayed to Date that "C" Violation Was Cleared

(Decision submitted by David Hershey-Webb, Esq. of the Manhattan law firm of Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP, attorneys for the tenants).

Landlord applied for MCI rent hikes based on exterior restoration, including a new roof, with related consulting services. The DRA ruled for landlord but set the effective date of the rent increase for rent-stabilized apartments as Sept. 1, 2014, which was the first rent payment date after all lead-paint Class C violations were shown to have been removed from HPD's database.

Landlord and tenants both appealed and lost. Landlord argued that the DHCR's policy of postponing the effective date of the MCI increases was a "new rule" that was in conflict with the law and which shouldn't have been put into effect without State Administrative Procedure Act (SAPA) review. The DHCR found that it had been long-standing DHCR policy for many years and that at the time this case was pending, when there were hazardous Class C violations based on lead paint on record, the effective date of any MCI rent increase couldn't precede the date that such violations were shown to have been removed from HPD's database. Any 2014 amendments to the Rent Stabilization Code concerning the effect of C violations on MCI applications didn't change this policy.

Tenants claimed on appeal that: (1) there was an open DOB complaint while the work was ongoing; (2) the project cost was underestimated in DOB filings; (3) landlord's cost of the work was inflated; (4) there had been leakage through the roof into top-floor apartments; (5) the cost of the sidewalk bridge should have been disallowed; and (6) the building's permit application contained a false statement. The DHCR found that a number of tenants' claims at the PAR level were new and therefore couldn't be considered and that the claim of inflated cost was unsubstantiated. One tenant claimed roof leaks but didn't permit DHCR inspection to confirm. 

725 West 184th Street LLC/Various Tenants: DHCR Adm. Rev. Docket Nos. CV430041RO, CV430049RT (7/20/18) [2-pg. doc.]