Regardless of your feelings about rent controls, both landlords and tenants should understand as much as possible about the different situations when rent can be raised despite rent stabilization.
One of the most common situations that comes up is when a landlord wants to make improvements to their property – and raise the rent accordingly. This is when it’s critical to know the difference between individual apartment improvements (IAIs) and major capital improvements (MCIs)
IAIs benefit specific tenants
IAIs refer to upgrades or renovations made to individual rental units within a building. These improvements aim to enhance the livability of a specific apartment. IAIs can range from minor cosmetic changes like painting the walls, upgrading the carpets or installing new fixtures to more substantial alterations such as kitchen or bathroom renovations.
IAIs can improve a tenant’s living conditions and comfort, but they’re also costly – so landlords generally want to pass those costs on to the tenant who benefits from them. So long as the unit is occupied, however, landlords need the tenant’s informed consent about the associated rent increase. They must also notify the Division of Housing and Community Renewal (DHCR) in advance of the upgrades.
MCIs are building-wide upgrades
Major capital improvements (MCIs) involve significant renovations or upgrades to a whole building’s common areas or structural elements. These improvements benefit all of the tenants in some way and boost the overall value of the property. Examples of MCIs include elevator modernization, roof replacement, boiler upgrades or repairs to the building’s facade.
Unlike IAIs, MCIs don’t require a tenant’s consent for a rent increase, which is why they tend to provoke a lot of legal battles. Tenants do not always feel that the improvements are really to their benefit or fair, so they may not willingly pay for them.
If you’re in a dispute over improvements to a rental unit or building, don’t guess about your rights. Informed legal guidance can help you understand the options.
