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What are the differences between IAIs and MCIs?

On Behalf of | Jun 15, 2021 | Landlord-tenant Law |

If you are rent-regulated, there are a limited number of reasons your landlord may legally raise your rent, other than as part of a rent renewal. And one reason that comes up fairly frequently is to pay for improvements to the building. While improvements may sound like a good thing, you may not appreciate the increase in your rent.

You may encounter two types of improvements: individual apartment improvements (IAIs) and major capital improvements (MCIs).

What are IAIs used for?

IAIs are generally for new appliances, furnishings and painting, and increased services such as heat and hot water. In addition, an IAI can be for a substantial increase in living space. These things can increase your rent; however, the building’s owner cannot simply make the improvements without your consent. They must get your written—and voluntary—consent before they can raise your rent. In rent-controlled units, the owner must also provide written notice of the increase to the Division of Housing and Community Renewal (DHCR). Under the HSTPA of 2019, the amount of such increases is very limited, approximately $90/month every 5-years.

An updated DHCR Fact Sheet on IAIs can be found here.

MCIs cover the whole building

MCIs are for when a building owner needs to make improvements that affect the entire building. This may include replacing the boiler, repairing the roof or replacing electrical wiring or plumbing throughout the building. The owner does not need your consent to raise your rent to pay for MCIs. They must, however, file an application—the Owner’s Application For Rent Increase Based on MCIs—with the DHCR.

There are ways for tenants to oppose MCIs. For example, if you believe your building’s owner has not followed the MCI process correctly or that the improvements are not for the benefit of all tenants or that the costs are not substantiated or 35% or fewer of the apartments in the building are rent-regulated, you may be able to defeat the MCI application.

You can find an updated DHCR here.

It is better to contact a tenant attorney to defeat or reduce an MCI  than to fight the MCI without legal counsel.

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