DHCR FACT SHEET #22
Division of Housing and Community Renewal

MAXIMUM BASE RENT PROGRAM (MBR)
QUESTIONS AND ANSWERS FOR OWNERS;

The Maximum Base Rent Program affects housing conditions in NYC
rent controlled apartments. The program ensures that apartments
under rent control provide enough income for their maintenance
and for building improvements.

NYC Local Law 30 (1970) stipulates that Maximum Base Rents be
established for rent controlled apartments according to a formula
calculated to reflect real estate taxes, water and sewer charges,
operating and maintenance expenses, return on capital value and
vacancy and collection loss allowance. The Maximum Base Rent is
updated every two years by a factor that incorporates these
changes in operating costs.

Q. WHO IS ELIGIBLE FOR THE MBR PROGRAM? HOW DO YOU FILE?

Owners with rent controlled apartments may qualify for MBR rent
increases by filing the following forms with DHCR.

1.  Violation Certification [DHCR form VC] certifying that all
    rent-impairing violations, and 80% of all non rent-impairing
    violations on record as of January 1 of the preceding odd
    year (e.g. 1989, 1991) or six months before filing are
    cleared, corrected or abated. The NYC Dept. of Housing
    Preservation and Development, Division of Code Enforcement
    (NYC HPD/DCE), determines the nature and number of violations
    on the buildings.

2.  Operation and Maintenance of Essential Services Certification
    [DHCR form OMESC] certifies that an owner made payments
    and/or incurred obligations to pay at least 90% of their
    expense allowance for the operation and maintenance of the
    building and that they are and will continue to maintain all
    essential services.

3.  When the above certifications are filed, an owner will be
    billed by DHCR for the MBR fee for each rent controlled
    apartment.

After the owner removes the violations, certifies their O&M
expenditures. and pays the fee, DHCR issues an MBR Order of
Eligibility to the owner and each rent controlled tenant. The
Order authorizes the owner to calculate, on official forms, the
MCR's and MBR's for each rent controlled apartment.

The effective date of the MBR increase is either January 1 of the
applicable year if forms were timely filed, or 6 months after the
filing of such forms.

Q. HOW MUCH WILL A TENANT HAVE TO PAY?

The rent that rent controlled tenants actually pay is called the
Maximum Collectible Rent (MCR). The MCR generally is less than
the MBR. By law, the MCR cannot be increased by more than 7.5%
per year for each year of the two year cycle unless there are MCI
or individual apartment rent increases. For example, if a
tenant's rent (MCR) on 12/31/87 was $200, and their MBR was $233,
then on 1/1/88 (effective date of MBR) their rent (MCR) would
rise 7.5% to $215 and the MBR ceiling would rise by 16.4%
(1988/89 MBR factor) to $271.22. On 1/1/89, the MBR would remain
the same (since MBR's cover a two year period), but their MCR
would rise by another 7.5% to $231.12.

Where issuance of an order results in a retroactive rent
increase, the tenant can choose between making a lump sum payment
or paying in installments equal to the number of months of the
back rent increase.

Q. HOW DOES AN OWNER BEGIN COLLECTION OF THE INCREASE?

Collectibility of the MBR increase depends upon:

1.  DHCR issuance of an MBR Order of Eligibility to the owner and
    to each rent controlled tenant.

2.  owner serving the tenant with a Notice of increase in MBR and
    MCR Computation [DHCR form RN 26S or RN 26]. This notice
    accompanies the owner's Order of Eligibility.

3.  owner filing with the DHCR a completed Master Building Rent
    Schedule listing the MBRs and MCRs for all rent controlled
    apartments.

Q. HOW DOES A TENANT OR OWNER CHALLENGE AN MBR ORDER?

Owners or tenants may challenge Maximum Base Rent Orders by
tiling Challenge Re: Maximum Base Rent Order [DHCR form RA-94
MBR]. Tenants may also challenge waivers granted by NYC HPD/DCE
inspectors on the same form.

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DHCR Fact Sheets (series of thirty) are issued by the New York
State Division of Housing and Community Renewal (DHCR) as plain-
english informational publications.  For official agency
policies, see DHCR Policy Statements, Advisory Opinions and
Operational Bulletins. Also refer to the Rent Stabilization Code,
the Rent Stabilization Law and various Rent Control Statutes.

Electronic versions of these documents on TenantNet are for
informational purposes only and there is no guarantee they will
be accepted by any court (or even DHCR) as true copies of DHCR
policy. The reader may obtain true copies of these documents from
DHCR.

Every attempt has been made to conform to the original Fact
Sheets as issued by DHCR; TenantNet makes no
representation the enclosed material is current or will be
applied as written.  The reader is advised that DHCR often fails
to properly apply, interpret or enforce housing laws.  Since
housing laws are complex and often contradictory, it is
recommended the reader obtain competent legal advice from a
tenant attorney or counseling from a tenant association or
community group. (rev. 3/13/96) DHCR documents
are public documents; the electronic version of such documents
have been developed by TenantNet and any added value, enhancements
and/or proprietary features are copyright 1994, 1995 and 1996 by
TenantNet. These documents may be freely distributed provided they
remain intact as herein presented, including this and the top
informational banner referencing TenantNet as the original provider.
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For more information or assistance, call the DHCR Rent Infoline
at (718) 739-6400, or visit your Borough Rent Office.

Queens Central Office
92-31 Union Hall St. 4th Fl.
Jamaica, NY 11433
(718) 739-6400

Bronx
One Fordham Plaza
Bronx, NY 10458
(718) 563-5678

Brooklyn
250 Schermerhorn St.
3rd Floor
Brooklyn, NY 11201
(718) 780-9246

Lower Manhattan
156 William Street
9th Floor
NY, NY 10038
(212) 240-6011, 6012
South side of 110th St. and below

Upper Manhattan
163 W. 125th St.
5th Floor
NY, NY 10027
(212) 961-8930
North side of 110th St. and above

Staten Island
350 St. Mark's Place
Room 105
Staten island, NY 10301
(718) 816-0277

Nassau County District Rent Office
50 Clinton Street, 6th Floor
Hempstead, NY 11550
(516) 481-9494

Westchester County District Rent Office
55 Church Street, 3rd Floor
White Plains, NY 10601
(914) 948-4434

Rockland County District Rent Office
94-96 North Main St.
Spring Valley, NY 10977
(914) 425-6575

Albany Regional Office
119 Washington Avenue
Albany, NY 12210
(518) 432-0596

Buffalo Regional Office
Ellicot Square Building
295 Main St., Room 438
Buffalo, NY 14203
(716) 856-1382

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