Preferential Rent and MCI increases

[CatchaFire]

Hi All,

I'm an RS tenant in NYC, paying a PR. This seems like a pretty basic question, but I haven't been able to find anything definite about it online. I recently received an MCI rent increase order, and I was wondering if the LL could apply that increase to my rent. My lease contains the requisite clause for MCI increases, but there's nothing about raising a PR if an MCI increase is approved, in either the vacancy lease or the PR rider. And for what it's worth, I've never received a copy of my annual rent registration from the LL. I have yet to get a copy of my rent history, but I intend to.

PRs are almost entirely unregulated by the state: they're generally market rate, offered where the apt's legal maximum rent is higher than the area's going rate, and LLs may raise them by a percentage greater than that set by the RGB. In such a situation, it doesn't make much sense that the DHCR could order a rent increase, but who says what the DHCR does has to make sense?

[TenantNet]

A MCI rent increase will increase the Legal Regulated Rent (LRR). It does not necessarily impact the PR, although we've seen instances where LLs add the MCI to the PR in addition to adding it to the LRR. That might be legal but we've seen no cases on that specifically.

If one were to challenge a MCI being added to a PR, I suppose the argument might be that the MCI can increase the LRR and there's no regulation that allows it to also increase the PR. Have you checked with DHCR? What do they say?

You should get the rent history ASAP as if there have been no yearly registrations, that might impact the LLs ability to get increases (including MCIs). That's in theory, but in practice DHCR allows LLs to correct that retroactively.

[CatchaFire]

Thanks for your help. Sorry for the late reply. I was waiting to see if the LL would attempt to collect the MCI increase, which he is. If there's any question of whether the LL can add it to a PR, I don't have the time or money, nor is the increase large enough, for me to contest it, but I'll still get a copy of the rent history.

The LL is also attempting to add an extra increment to the retroactive increase (i.e, as if the effective date of the MCI increase order were a month earlier than it actually was), and I was wondering how to respond. It's such a small amount, and the overcharge is so clear-cut, that I can't imagine him taking me to housing court, except perhaps as a form of harassment, but stranger things have happened.

Thanks again for the help.

[TenantNet]

You write him a letter and don't pay the illegal part. If he continues to charge it - or fold the illegal part into the next legal rent increase on a renewal, then file with DHCR.

[Landlords Boy]

If one were to challenge a MCI being added to a PR, I suppose the argument might be that the MCI can increase the LRR and there's no regulation that allows it to also increase the PR.

Check your original lease under the section, "Rent Adjustments". The standard REBNY lease states, "...where the authorized agency has granted an increase in rent, You shall pay such increase in the manner set forth by the authorized agency..." That means the tenant (regardless of whether he/she pays a preferential rent or not) pays the authorized increase. What's more, DHCR normally specifies it applies retroactively, to the date the landlord applied for the MCI increase.

[TenantNet]

That's a simplistic view, and of course, leases provided by landlords are never wrong are they? First, tenants usually have the right to appeal, either with DHCR or in the courts, so tenants should not be under the impression that everything is settled just because the LL thinks it is.

The question in this thread, however, is not whether a MCI is applicable, but if it applies to the legal rent, the preferential rent, or both. That is not so easy to answer.

As to retroactivity, one should see the DHCR Fact Sheet on how that is handled, and how it is limited by the 6% cap. Moreover, if the tenant has filed a PAR appeal, the retroactivity - for RS tenants - is stayed until the PAR is determined.