Dear Sam: I just received a notice in the mail that my building has undergone Major Capital Improvements (elevator repair) and I believe that means that the landlord can legally raise my rent every month, and that the increase is on each room my apartment has. What are my rights? (My apartment is technically stabilized, though we pay over $2,500 and have a “preferential rent.” A number of the other apartments in the building are stabilized.) Our building is thinking about hiring a lawyer and I'd love to know a) what we should look for in a lawyer and b) what they can do for us?
A: If all the tenants in your building are wondering about these new MCI charges, then yes, you and your neighbors should at least consult with a lawyer, says Sam Himmelstein, a lawyer who represents residential and commercial tenants and tenant associations.
Ultimately, it may not make sense to take on legal representation, depending on the size of the MCI and how many other tenants you'll be splitting the bill with. However, Himmlestein's colleague David Hershey-Webb—who frequently handles MCI cases—points out that many firms (including theirs) will sit down with tenant associations for a free consultation. "At the very least, no matter what the MCI is, it would make sense to sit down with an attorney for an initial consultation," he says. "Based on that, you can determine whether you have the means and whether it's worthwhile to fight the MCI."
If you do decide to push back, it's worth your while to have a lawyer on hand. "You're going to want an attorney that has a lot of experience with Major Capital Improvements, because it's a very specialized area of the law," says Hershey-Webb.
"Tenants frequently make the wrong argument [without a lawyer]," says Himmelstein. "They'll say 'this isn't fair because this thing really needed to be repaired anyway,' but the whole point of MCIs is to encourage landlords to fix or replace systems that are in disrepair." Instead, an attorney can help you look into whether the landlord filed their paperwork correctly, and if the work truly qualifies as an MCI.
"The code is very specific about capital improvements," Himmelstein notes. "I remember one [elevator repair] where they replaced the cab, lights, and buttons, but not the motor, and it got denied completely because it didn’t qualify." One thing to keep in mind: to check into the quality of the work, you and your fellow tenants will likely need to hire an engineer to inspect the elevators in question.
As we've written previously, if the MCI claim is legit—and your apartment is stabilized—the landlord can raise your rent by hundreds of dollars a month dating back to the time the improvement was made. (While there is a 6% cap per year on how much the landlord can collect of the entire MCI, the entire MCI increase is immediately “built into” the rent for the purpose of high rent/high income deregulation. If this level of raise means any of your neighbors' apartments potentially going above the $2,500/month mark and exiting stabilization, that's all the more reason to have a lawyer look into it, as landlords frequently use shady MCIs as a tool to up the rent of their stabilized tenants so that they can file high rent/high income deregulation petitions against them.)
But keep in mind that the notice you received is one of the very early stages of what's always a long, drawn-out process. "The notice just means the landlord has applied," says Hershey-Webb. "You building's owner can't collect anything until the DHCR reaches a decision, and in a lot of cases, the agency will reduce the amount the owner is seeking. Sometimes they do it on their own, and sometimes they do it if you respond and a lawyer points it out."