MCI Increase Denied Due to Outstanding 1986 Rent Reduction Order

Landlord applied to the DHCR for MCI rent increases based on installation of a new roof. The DRA ruled against landlord because there was an outstanding building-wide rent reduction order in effect. The DHCR had issued the order in 1986.

Landlord appealed and lost. Landlord argued that the rent reduction order wasn't a final determination and that it had filed a rent restoration request. But the DHCR denied the rent restoration application in April 2022. This was prior to issuance of the order denying the MCI rent increases. The Rent Stabilization Law and Code permit the DHCR to deny a rent increase application if the owner is not maintaining all required services, or if there are current hazardous or immediately hazardous violations outstanding against the premises. The existence of a building-wide rent reduction ordered by the DHCR precludes the granting of an MCI rent increase. While the MCI application was pending, the DRA had notified landlord five times through Requests for Additional Information that this order was outstanding and that no MCI rent increase could be granted until the rent was restored. The DHCR wasn't required to keep the MCI application file open for an indefinite period. The DHCR didn't abuse its discretion when it moved forward and denied landlord's MCI increase application.

3850 Broadway Holding LLC: DHCR Adm. Rev. Docket No. KQ430012RO (1/9/24)[4-pg. document]