The Division of Housing and Community Renewal (DHCR) issued the first amendments to the Rent Stabilization Code in 14 years. The amendments, 27 in all, are a mixed bag of regulatory changes ranging from the mere codification of judicial decisions, to technical fixes affecting few cases, to attempts to make the code more tenant friendly. These amendments combined with the new laws governing implementing rent increases for major capital improvements have created an anti-property owner skewed battlefield that has caused Adam Leitman Bailey, P.C. to be involved in some of the largest and most important DHCR cases in New York City.
Many of these cases have been battles to collect the Major Capital Improvements added to the tenants’ rent bills. Major Capital Improvements are one of the most effective means to raise rents on rent-regulated units and a landlord may only obtain an MCI upon application to the New York State Division of Housing and Community Renewal (DHCR). While the Rent Stabilization Code (RSC) lists the most common of the systems eligible for MCI treatment, any building system can qualify, provided that it is:(a) deemed depreciable under the Internal Revenue Code, other than for ordinary repairs; and (b) is for the operation, preservation and maintenance of the structure; and (c) is an improvement to the building or to the building complex which inures directly or indirectly to the benefit of all tenants, and which includes the same work performed in all similar components of the building or building complex, unless the owner can satisfactorily demonstrate to the DHCR that certain of such similar components did not require improvement. To obtain the 1/84th increase of the actual cost of all major capital improvements, the landlord must be intimately understand the traps and landmines that must be overcome to raise the tenants’ rent.
Another important battlefield for property owners concerns the Tenant Protection Unit. The job of the “Tenant Protection Unit” (TPU) is to launch its own investigations. It has been attacking small and large landlords alike, prosecuting and challenging documents submitted to DHCR, as well as demanding proof and documentation on whether the improvements have been completed prior to collecting any rent increases. Adam Leitman Bailey, P.C. has been advising property owners in litigation with the Tenant Protection Unit and taking steps so the property owner to avoid a claim by the TPU.
In addition, the firm’s DHCR practice encompasses all forms of complaints and cases whether it concerns rent overcharges, a decrease in services provided to tenants, the demolition of a building or taking back rent-regulated apartments to be used by the property owner for office space. Adam Leitman Bailey, P.C. also has been successful handling luxury deregulation cases, harassment proceedings, rent restoration applications, modification of services applications, as well as removing apartment from rent regulation by non-profit organizations.