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Major Capital Improvements (MCI) Application Updated

NEW MCI APPLICATION FORM (RA-79) REQUIRED

Affects Applications Submitted to DHCR On and After September 1, 2016

The Department of Housing and Community Renewal's Office of Rent Administration has updated the following documents: 

Please be advised that the beginning September 1, 2016 DHCR will only accept the new version of the application. 

The important changes are summarized below.

The Instructions

The new RA-79 instructions no longer contain line-by-line directions; instead, the instructions have been incorporated into the body of the application form.

The new instructions state that owners may request an extension to file a MCI application more than two years after the completion of the work provided the owner can document “that all governmental permits and approvals were applied for in a timely manner, and that the delay was not the fault of the owner or their contractor.”

The new instructions include information regarding lead paint and other Class C violations.  For lead paint violations, a signed affidavit affirming that lead paint removal has begun is required to allow for the docketing and processing of the application.  However, the actual MCI order will not be issued until those violations are removed from HPD’s database.  For other Class C violations, DHCR will accept a signed affidavit from an architect or engineer attesting that the violations have been remedied.

The new instructions also include references to DHCR Fact Sheet #33 (useful life schedule) and DHCR Policy Statement 93-2 (definition of room for room count purposes), and a list of all the supplemental forms that must be attached to the MCI application. The instructions contain a new section, “Requirements for Certain MCIs,” which lists the specific requirements for 27 types of improvements that qualify for MCIs. The list of permit numbers for certain MCIs is no longer in the instructions.

The Application

The first page of the new application requests information regarding the capital improvement; this was previously on the second page of the form.  The new form also requests information regarding the useful life of the improvement. The calculation portion includes the amortization periods for buildings with 35 or fewer apartments, and buildings with 36 or more apartments.

The owner affirmation that previously was on the first page of the former application is now on the second page. Below the affirmation there is a new “Owner Checklist,” which includes a list of 15 questions relating to items which must be completed before the application may be submitted, including the removal of lead paint violations and registering rents for the prior four years.

The supplemental forms that are part of the application have been renumbered and include two new supplements (numbers 3 and 6 below).  The supplemental forms are:

  • Supplement 1: Owner and Contractor/Vendor Affirmation.  This supplement has been reduced to one page from two and requests specific details regarding the contractor’s/vendor’s name address, costs, and relationship to the owner.
  • Supplement 2: Required Additional Information for Specific MCIs (previously part of Supplement 1.  “Gas Piping” has been added to the list of specific MCIs which the owner must detail in Supplement 2.
  • Supplement 3:  Invoice/Contract Proof of Payment Worksheet (new).  This is a new supplement which lists the items necessary to establish proof of payment.
  • Supplement 4:  MCI Cost Allocation for Commercial Tenants (previously Supplement 3).  This supplement contains a note that laundry rooms should be included in Supplement 4, and that professional apartments should be listed in Supplement 5.
  • Supplement 5:  Schedule of Tenants (previously Supplement 2)
  • Supplement 6:  Coop/Condo Questionnaire (new). 

Members who are currently performing work or considering applying to DHCR for MCI rent increases should review the application and instructions before commencing the work.  Members who have questions should contact RSA or their attorney.

 

 

 

 

 

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