New York Times Real Estate Question & Answer

March 7, 2004
By Jay Romano

Q Our 23-unit prewar rental building has rent-controlled, rent-stabilized and market rate apartments. We have heard that the landlord is proposing to replace the old steel casement windows. This, I believe, will be considered a major capital improvement, or M.C.I., that will result in rent increases. Many of us like the old windows and don't want them replaced. Do we have any recourse? . . . Jon Lawson, Manhattan.

A "The tenants' aesthetic preferences will not trump the landlord's right to do such work," said Lucas A. Ferrara, a Manhattan real estate lawyer and editor of Landlord Tenant Monthly, a newsletter for lawyers. "A landlord need only comply with the regulations promulgated by the state's Division of Housing and Community Renewal for M.C.I. work in order to collect the attendant rent increases."

But Mr. Ferrara noted that after the owner files a rent increase application, the state agency will give the tenants an opportunity to be heard. "Typical objections can be that all or part of the work did not qualify as an M.C.I., that the M.C.I. did not benefit all tenants, that it was improperly performed, or that the owner has not substantiated the costs," he said.

It is also possible that the existing windows are not old enough for the landlord to get a full major capital improvement increase for replacing them. Mr. Ferrara explained that under state regulations, steel casement windows have a useful life of 25 years. If the existing windows have been installed for less than that time, the landlord would have to apply to the agency for a waiver and may recoup up to 50 percent of the replacement costs if the change is made for energy conservation.

"On the other hand, once the useful life has elapsed, the owner may seek to recoup the full cost of the replacement windows," he said.

With a major capital improvement, Mr. Ferrara said, a landlord is entitled to a building-wide monthly rent increase of 1/84th of the allowed cost of the improvement. The increase is permanent and added to the base rent, and is prorated among the apartments on a per-room basis.