ST/PCV Tenants Association and CWCapital Negotiate Settlement of MCI Orders, Saving Tenants Money
The Stuyvesant Town–Peter Cooper Village Tenants Association and CWCapital reached an agreement that settles the dispute over the five Major Capital Improvements (“MCIs”) applied for by former owner Tishman Speyer in 2009. Today, DHCR issued an Order confirming the agreement. This settlement will significantly reduce the impact of the recently approved MCIs for tenants. Specifically, it eliminates 100% of retroactive charges for current tenants and reduces each tenant’s payable monthly increase. Specific details of the agreement are summarized below. The settlement marks the second time that the terms of a Stuyvesant Town or Peter Cooper Village MCI have been modified through negotiated settlement.
“The Tenants Association appreciates having been able to negotiate these issues amicably with CWCapital,” said TA Chair Susan Steinberg. “Residents have been saved a great deal of money in retroactive costs, which have been completely eliminated, and some relief in the MCI rent additions. Notably, the negotiations saved months of time and lots of money in legal filings and responses. The best news is that the outcome is at least as favorable to tenants as any we could have won the harder way.”
“We are very pleased to have worked with the Tenants Association to reach a settlement,” said Andrew MacArthur, Managing Director of CWCapital Asset Management. “We have worked closely with the TA to reach an agreement that mitigates the impact of the increases for our residents and brings finality to this dispute.”
The five MCI Orders cover: video intercoms, security system, video command center, water tanks/valves, and repaving of the walkways. Two of the Orders impact residents in Peter Cooper Village and three of them impact Stuyvesant Town residents. This agreement eliminates lengthy and expensive administrative and legal challenges and brings tenants financial relief and finality to the proceedings
As with the recent successful Tenants Association/CWCapital settlement relating to service reductions, DHCR hosted and assisted in the negotiations between the ST/PCV-TA and CW. Both sides are thankful for DHCR’s assistance in achieving a settlement.
While all residents benefit from this agreement, specific benefits are individually calculated. Below is a summary of the agreement that will help individual residents estimate their benefit. These terms represent a general summary of the agreement and are not inclusive of every detail included in the agreement. We have tried to be accurate in providing this summary, however if there are any inconsistencies between this summary and the agreement, the terms of the agreement prevail. Residents should read the agreement in its entirety (which DHCR will mail together with the Reconsideration Orders) to understand its full impact and should consult the TA to address specific questions.
● All current residents are included in this settlement except those who moved in after the Orders were issued (approximately October 2013).
● The Settlement is retroactive to January 1, 2014.
● Credits noted below will begin to appear on the May rent bill.
● In May, a retroactive credit will be added to the rent bill. This credit will include the benefit amount for January, February, March, and April.
● The retroactive and permanent increase amounts noted below are all clearly stated in the MCI Orders that residents received in the mail. This number is different for all residents and depends on many factors including: building, unit size and move-in date.
● If a resident cannot find his/her Order, that resident is advised to call DHCR at 1-800-ASK-DHCR (1-800-275-3427) to request a duplicate copy.
Benefits for Non-Roberts Tenants Paying Full Legal Rent:
● 100% of retroactive charge is waived.
● 5% of the permanent MCI will be credited for the duration of each resident’s tenancy.
● This group includes tenants who are paying full legal rent other than the Electrical Upgrade MCI under the Opt-In/Opt-Out program previously approved by DHCR.
Benefits for Non-Roberts Tenants Paying Less Than Full Legal Rent:
● 100% of retroactive charge is waived.
● 100% of the permanent MCI will be credited for the duration of each resident’s tenancy.
Benefits for SCRIE/DRIE Residents:
● SCRIE/DRIE residents will not be responsible for either the retroactive increase or the permanent increase.
● PCVST management has already filed the appropriate paperwork with the NYC Department of Finance (“DOF”).
● DOF is in process of processing all of the required adjustments.
● The MCI increases may appear on rent bills until DOF completes its work. At that time, PCVST will make all appropriate adjustments to ensure that SCRIE/DRIE residents are not charged.
Benefits for Roberts Residents:
● 100% of retroactive charge is waived.
● 5% of the permanent MCI will be credited for Roberts residents paying the full Legal Rent.
● 50% of the permanent MCI will be credited for Roberts residents paying either the maximum Modified Legal Rent or the maximum Roberts Preferential Rent. These two terms are defined in the Roberts Settlement.
● 100% of the permanent MCI will be credited for Roberts tenants paying less than the Modified Legal Rent or Roberts Preferential Rent noted above.
● All of these credits will continue for the duration of each resident’s tenancy.
● A hotline has been set up for Roberts tenants to find out which category applies. This hotline will continue to operate for 30 days. Roberts residents should call (212) 420-4940.
The agreement requires the Tenants Association to use good faith efforts to prevent the filing of individual Petitions For Administrative Review (PARs), which directly or indirectly challenge the settlement. Such PAR could result in the agreement being nullified in the sole discretion of the owner. Nullification would result in forced repayment of the retroactive charges and any waived portion of the permanent charges by all tenants who benefited from the agreement. The possibility of nullification by the owner due to an ill-advised PAR is a very serious concern to the Tenants Association.
There are two types of "ministerial errors" which may be corrected by filing a PAR that will not jeopardize the agreement:
1. The MCI order you receive has an inaccurate room count. An inflated room count may result in unwarranted additional charges. Such problems are rare, however, and usually concern misunderstandings about what is considered a room. Note that what constitutes a "room" has a specific definition which can be found in DHCR Policy Statement 93-2 located online at www.nyshcr.org/Rent/PolicyStatements/orap932.pdf.
2. Tenants may be exempted permanently or for a limited time from the MCI charges if they:
a) moved in after DHCR served notice of the pending MCI applications (served in 2008 and 2009); and
b) never received notice of the pending MCI application in their initial lease or a lease rider, or do not have a clause in their lease allowing such increases on renewal; and
c) are not covered by the settlement in Roberts etal. v. Tishman Speyer.
Note that even if you are exempt from the charges because of a lack of notice in your initial lease, charges may be added on renewal if your lease contains appropriate language allowing the addition of MCIs to your rent. You may have an MCI Rider or a Rent Increase and Eligibility Rider attached to your lease — or a similar rider — which clarifies this. Your lease may simply state something like "The rent established in this lease may be increased or decreased by an order of the DHCR or the Rent Guidelines Board." According to DHCR policy, that is sufficient to allow the owner to add the MCI increase mid-lease after the first renewal.
Management has set up a hotline to resolve such problems at (212) 614-5805. If you checked the DHCR definition of rooms and believe there is an error in your room count; or, if you meet the criteria described in 2 above and have checked your lease and find no notice of pending MCI increases, you should PROMPTLY call the management hotline to resolve those issues.
If you are unable to obtain a resolution through management, please notify us as soon as possible, either by calling the TA message center at (866) 290-9036 or by emailing the TA using the Contact Form at stpcvta.org. We will provide the information and forms you need to file individual PARs to ensure you are protected against unwarranted MCI increases.
Remember that PARs must be filed within 35 days of the date on the DHCR order.