What Are Major Capital Improvements?

When landlords make major capital improvements, also called MCIs, to their buildings, they expect to recoup the investment they made somehow. They are often allowed to raise rents, but there are limitations to this, especially with rent-stabilized tenants. If you think that your landlord is trying to take advantage of you after an MCI, contact our attorneys. We know how to help with rent control & rent stabilization rent overcharges.

What Kind of Work Can Be Considered Major Capital Improvements?

Major capital improvements are improvements that are meant to improve the entire building. These are also not just renovations to existing parts of the building. To qualify as an MCI, the work usually has to be completely new. Some good examples include a new roof, brand-new plumbing, or the installation of a new boiler.

These major capital improvements also must be functional and work should benefit all tenants. Rewiring a building or making it more energy-efficient would qualify since every tenant would presumably benefit from lower electricity bills and a safer environment.

Can Major Capital Improvements Be Done to Just One Apartment?

No, a landlord cannot just claim that work done on one apartment is an MCI. This would be an Individual Apartment Improvement, also referred to as an IAI. A landlord cannot make upgrades to one apartment and then raise rent for everyone in a bid to make back the money that they spent. That’s just not how it works. Major capital improvements have to affect the entire building and common areas, not just one tenant’s space.

How Can These Improvements Affect a Rent-Stabilized Tenant?

In a building with rent-stabilized tenants, a landlord can try to use major capital improvements as an excuse to raise rent. There are rules that they must follow though. They cannot ask for rent increases due to major capital improvements if:

• 35% or fewer of the units in the building are rent-stabilized
• They have hazardous violations on file
• They have not kept accurate records concerning the cost of the MCI

If your landlord is allowed to raise rent, they must continue to play by the rules. This means that:

• They can increase rent up to 2% per year
• They must get written permission from the Division of Housing and Community Renewal, or DHCR
• They can only be reimbursed for “reasonable costs”

So a landlord must be able to show that they paid a reasonable amount for the major capital improvements and they are limited in how much they can raise rates for rent-stabilized tenants. This can prevent scams and keep rent increases reasonable for tenants while allowing a landlord to make back their money in the long term.

Contact Our Law Firm Today

If your landlord has made upgrades to your building recently, make sure that you are not taken advantage of. Contact Robert Rosenblatt & Associates if you have any questions about your lease and your rights. Our experienced attorneys are ready to stand up for a tenant’s best interests.