MCI Application Filed Too Late

Landlord applied for MCI rent hikes based on the installation of a new roof. The DRA ruled for landlord. Tenants appealed, questioning how the original project cost was stated on landlord’s application as $173,000 while the MCI order listed the cost as $771,000. They also claimed that the work was done on a piecemeal basis and that landlord didn’t file its MCI application within two years of completing the work. Landlord claimed that 12 change orders to its original contract were related to the roof work and showed that the completion date, after the twelfth change order, was less than two years before landlord filed its MCI application. The DHCR ruled for tenants and revoked the MCI rent hikes. Landlord filed its application on Sept. 7, 2005, so the work must have been completed by Sept. 7, 2003. Of landlord’s 12 change orders to its original contract for the work, only the first three change orders were related to the new roof. Later change orders, starting with the fourth one dated March 16, 2001, covered unrelated exterior building renovation and terrace replacement. Since the last change order for the roof work was in early 2001, landlord should have filed its MCI application by early 2003. So landlord’s 2005 application for the roof work was untimely, and landlord must credit tenants with any excess rent collected for the MCI.

61 Jane Street: DHCR Adm. Rev. Docket No. VG410034RT (11/7/08) [4-pg. doc.]