MCI Rent Hike Delayed Until Hazardous Violations Corrected

The DRA granted landlord's MCI rent increase application, based on installation of a new roof and exterior restoration. The DRA set the effective date of the increase as April 1, 2014, which was the first rent payment date after landlord submitted proof that conditions underlying all hazardous Class "C" violations had been corrected.

Landlord and tenants both appealed. Landlord disputed the effective date of the rent increase. Tenants claimed, among other things, that there should be no MCI rent increase based on the C violations.

The DHCR ruled against tenants, finding that tenants didn't raise the C violation objection before the DRA and couldn't do so for the first time on appeal. 

The DHCR also ruled against landlord. Both before and after 2014 amendments to the Rent Stabilization Code, the RSC barred the granting of an MCI rent increase when hazardous violations were on record. It was long-standing DHCR policy and practice while landlord's MCI application was pending that, when C violations were in effect while the MCI application was pending, the effective date of any subsequently granted MCI increase could not predate the date on which evidence was received showing that the C violations had either been removed from the HPD database (if lead paint violations) or remediated (non-lead paint violations). Landlord was on notice of this policy before filing the MCI application. Also, landlord's claim that the C violations in question had "no effect" on tenants was irrelevant. The specific nature of the violations didn't matter.

Various Tenants/Realty Enterprise LLC: DHCR Adm. Rev. Docket Nos. CR110036RT, CT110038RO (2/21/19) [2-pg. doc.]