Improvements Needed Due to Fire

Landlord asked whether major capital improvements required by building fire damage qualified for MCI increases. In an opinion letter, the DHCR stated that in general they should qualify. But, if the MCI was being paid for out of the proceeds of a fire insurance policy, landlord can't recover that amount through rent increases. And, it was possible that rent increases for MCIs paid for by landlord after a fire might also be limited. This might happen if most of the improvements were cosmetic, if landlord's negligence had caused the fire, or if landlord didn't carry adequate insurance.

DHCR Opin. Ltr. by Nathaniel Geller (3/3/92) [2-page document]