Blackstone intends to appeal the court’s decision in our favor on facade work Major Capital Improvement rent increases affecting 26 buildings. The decision annulled the MCI for 14 buildings, and tenants in those buildings who have already been paying the MCI would be entitled to a refund and recalculation of their rent. Until there is a final ruling, those tenants should continue to pay their rent, including the MCI charges. If the annulment for the 14 buildings is upheld, those tenants will then receive a refund, and their rent will be recalculated to remove the MCI from their base rent going back to when it was added.
The two main questions on appeal:
(1) Whether the MCI applications for those 14 buildings were untimely when they were filed, and
(2) Whether the property owner was required to specifically prove, and the state’s Division of Housing and Community Renewal was required to specifically determine, that the project was depreciable under the Internal Revenue Code when the work—waterproofing and pointing, as necessary—was classified as a major capital improvement in the Schedule of Major Capital Improvements in the Rent Stabilization Code.
The second question applies to the additional 12 buildings. The MCI applications for them have been remanded to DHCR.
Anne Greenberg published this page in Latest News 2023-03-03 09:39:48 -0500