Waiving MCI Rent Hike

The DHCR granted landlord an MCI rent hike. The amount of the rent hike was greater than the 6 percent annual cap allowed under the Rent Stabilization Code. So landlord was required to limit the rent increase for the first year and add the balance of the rent increase after that. Landlord charged tenants the portion of the MCI rent hike that was up to 6 percent, but forgot to charge tenants the rest of the MCI rent hike the following year. More than four years later, landlord asked the DHCR if it could now charge the uncollected portion of the MCI rent hike. In an opinion letter, the DHCR said no. Rent Stabilization Code Section 2522.4(a)(8) limits the collection of any MCI rent hikes to 6 percent in any year from the effective date of the order granting the rent hike over the amounts of rent listed in the MCI application. Landlord must collect any hikes above the 6 percent in similar increments in future years. In the DHCR's opinion, if the amount of the MCI rent hike in excess of the 6 percent cap wasn't charged on the first anniversary date of the MCI order or in the first renewal lease issued after the MCI was granted, whichever date is later, then landlord permanently waived collection of the rent hike.

DHCR Opin. Ltr. by Michael B. Rosenblatt (6/19/06) [2-pg. doc.]