2015 NY Slip Op 50089

Citation: 2015 NY Slip Op 50089
Jurisdiction: New York (state)
Source: Official source
Original Source: https://www.nycourts.gov/reporter/3dseries/2015/2015_50089.htm ↗

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unsupported by any case authority. The identical claim was made by residential rent
regulated tenants before the Court of Appeals years ago in opposition to the
implementation by the former state DHCR to allow rent increases in the legal regulated
rent based on major capital improvements. This position was unsustainable based on the
realities of the residential real estate market and thus, even more applicable to
commercial real estate.

In the well known case of Bryant Avenue Tenant's Assoc., et al v. Edward I. Koch,
84 NY2d 960, 644 N.E.2d 1381 (1994), the IAS court was reversed that held that the
Rent Stabilization statute itself prohibited the merger of MCI rent increases with the legal
regulated rent. The IAS court concluded that, even though DHCR limits MCI increases
to 6% per year, the fact that such MCI increases become part of the legal regulated rent,
which is then subjected to other annual rent increases, such as annual Rent Guidelines
Board ("RGB") increases, has the effect of compounding the MCI increases
(emphasis added). According to the IAS court, because of the compounding of
the rent increases, the practical [*16]effect of merging an
annual 6% MCI is to increase the MCI in excess of 6%. It was argued that to allow the
MCI to become a permanent part of the base rent would be tantamount to forcing the
tenants to pay for the increase forever. The High Court outright rejected this rationale
and dismissed the Appellant's claims, similarly proffered by the General Plumbing in this
case, that the resulting "compounding" is a windfall to the Petitioners that should be
disallowed. The High Court stated that such an absurd result could not have been —
and surely was not — intended by the Legislature.