Background:

The Division of Housing and Community Renewal (DHCR) Rent Administrator is the first arbiter in the Major Capital Improvement (MCI) Application for a Rent Increase process.   The Rent Administrator may approve or disapprove a MCI application in whole or in part.  When the decision is unfavorable to the Tenant, the news is delivered in the form of an Order Granting MCI Rent Increase.  Tenants can appeal the Rent Administrator's decision to the DHCR Commissioner by petitioning for administrative review.  This is known as filing a PAR.

[Editor's Note:  Almost every MCI application affecting ST/PCV has been approved in whole, with few approved in part, by the DHCR Rent Administrator.  The current Administrator has served since and during the Pataki administration.  To date, DHCR has never rejected in entirety a ST/PCV owner-submitted MCI application.  However, that doesn't mean we give up.  Relief is more likely in the PAR stage.]

How Rent Increases are Calculated and Collected

The increase is added to your Base Rent with the following formula:  

The total cost of the improvement is divided by 1/84th and then divided by the total number of rooms in the building and allocated to each apartment based on room count.  A one bedroom has three rooms, a two has four, three, has five, etc.  Your rent is increased by the number of rooms in your apartment.  After the owner has collected the total cost of the increase, the charge remains in your base rent in perpetuity.

Prospective and Retroactive Charges  

The collectibility of an MCI Rent Increase Order begins from the date the MCI Application was accepted by DHCR.   Because the Rent Administrator's Order can be made sometime later, in the case of an increase, a retroactive balance can have accumulated since the application's acceptance date.   The prospective amount is collected first, put in the base rent upon the Order date.  However those tenants that file a PAR are shielded from collection of the Retroactive portion of the increase until DHCR PAR has been adjudicated. 

During this time the Owner might carry the amount of the retroactive portion as a Balance Forward line on your rent statement.   However, the owner may not enforce collection of this amount.   This practice may actually help the tenant's accounting  once the PAR is ruled upon.

What to do:

1) Do not discard the Order

Every communication from DHCR is a legal step in the Administrative Review process.  Copies of these forms are required to exercise your right to challenge the MCI application and Order.

You have the right to file a Petition for Administrative Review (PAR) to challenge the Order within 35 days of the Order Date.  Your tenants association will give guidance to tenants on how to file their own PARs in the form of instructions and a List of Objections to attach.  A PAR filed by the tenant carries the most standing before the agency.   A tenant may also delegate a representative (such as a tenants association Building Leader or an attorney) to file a PAR on their behalf.  (For more on filing a PAR, see the related links at the foot of the KB article below.)

2) Inform the Tenants Association

Make three copies of the Order and send one to the Tenants Association at ST/PCV-TA, PAR Copy, P.O. Box 1202, New York, NY 10009-1202. Alternatively,  you may also fax the TA copy to (866) 290-9036 or you may drop a copy off at the ST/PCV TA’s mailbox at the Oval Concierge in an envelope labeled: Attention of John Marsh, ST/PCV-TA, 276 First Ave, New York, NY 10009.

3) Check the website or with your TA Building Leader or Floor Volunteer for updates. 

The Tenants Association will gather the dockets and respond to tenants with guidance.