Rent stabilization laws can sometimes create a lot of confusion for both landlords and tenants alike – because even a rent-controlled apartment can have the rent raised when the landlord needs to make some improvements.
Landlords (and tenants) should understand the difference between individual apartment improvements (IAIs) and major capital improvements (MCIs) so that they know what’s legal – and what’s not. After all, a wrong move could open you up to a lawsuit, fines and damage to your overall reputation. Here’s what you should know:
What are IAIs and when can you use them?
As their name implies, individual apartment improvements affect specific rental units, not an entire building. They’re often used to do things like upgrade individual appliances, add skylights, renovate the kitchen or bathrooms and make similar changes that, ultimately, benefit the tenant as much as you.
However, IAIs cannot be completed without the tenant’s voluntary (and written) consent. In addition, you still cannot increase the tenant’s rent unless they also agree to that in writing, and you also provide notice to the Division of Housing and Community Renewal (DHCR). Once you’ve filed the correct forms (including the Tenant’s Informed Consent for the IAIs and increase), you need not wait to collect the increased rent.
What are MCIs and when can you use them?
When you need to make improvements to the entire building, that’s called a major capital improvement. For example, an MCI might include an overhaul of the building’s electrical system to make it more electronic-friendly, replacing the entire roof or upgrading an antiquated plumbing system.
In these situations, you need to file an Owner’s Application for Rent Increase Based on MCIs with the DHCR and get their consent before you act. Generally speaking, you want your application to clearly show that the renovations are designed for the benefit of all your tenants and are necessary expenses that justify the rent increase you’re asking to receive.
Don’t let frustrations with the rental system in New York cause you to act rashly. Find out more about how experienced legal guidance can help you manage your rental units with ease.
