Apartment (IAI) and Building (MCI) Improvements

Under New York's Rent Stabilization laws, owners may increase rents when they make qualified Major Capital Improvements (MCI) to a building or Individual Apartment Improvements (IAI). The law requires owners to follow certain rules and guidelines when increasing rents based on MCIs or IAIs, and it provides an avenue for tenants to dispute rent increases they believe were made unlawfully.

There are several publications below that provide information on a variety of topics, such as an overview of MCIs, the definition of a room for MCI purposes, and more. For an overview of MCIs, the useful life schedule, and more, see the Fact Sheet section. For an application to increase rent based on an MCI and application instructions, see the Forms section. For additional information regarding MCIs, visit the Operational Bulletin, and Policy Statement sections. 

Owners can access highly detailed information including filing procedures on IAIs in DHCR Operational Bulletin 2024-2 and Operational Bulletin 2024-2 FAQs. Tenants can access a summary of IAI information in DHCR Fact Sheet 26 and the Form RA-LR1 New York City Lease Rider or Form RA-LR1 ETPA Standard Lease Addenda for rent stabilized tenants. 

• MCI - Owners must apply for approval from the Division of Housing and Community Renewal (DHCR) in order to collect a temporary rent increase for an MCI. Increases in rent due to MCIs must be removed from the rent 30 years after the date the increase became effective. Some examples of MCI items include boilers, windows, electrical rewiring, plumbing and roofs. For more information on MCIs, see Fact Sheet #24.

• IAI - In order to collect a rent increase for an IAI, owners of rent controlled and rent stabilized apartments must notify DHCR of an IAI by filing a notification form and before and after photographs on the Owner’s Rent Regulation Application (ORRA) system. If the improvement is made in an occupied apartment, owners must also file a Tenant’s Informed Consent form. For more information on IAIs, see DHCR Operational Bulletin 2024-2 and Operational Bulletin 2024-2 FAQs. A summary of IAI information is available also in DHCR Fact Sheet 26 and the Form RA-LR1 New York City Lease Rider or Form RA-LR1 ETPA Standard Lease Addenda for rent stabilized tenants.

To view the translated versions of RN-19C Tenant’s Informed Consent form, visit the page below.

RN-19C Individual Apartment Improvement: Tenant’s Informed Consent (Non-English Versions)

1) What is the difference between an Individual Apartment Improvement (IAI) increase and a Major Capital Improvement (MCI) increase?

An MCI is an improvement or installation that improves the overall condition of a building that is subject to the rent stabilization or rent control laws. The verified costs of an MCI can be passed onto rent regulated tenants through a temporary increase to their monthly rent. However, in order to collect the rent increase the owner must file an application with DHCR. The summary of the application must be served on the tenants and they are given the chance to respond in writing. DHCR must issue an order either denying or granting the increase in whole or in part. For more information, see Fact Sheet #24 and form RA-79.

An IAI is an improvement, equipment installation, or increase in services that is made in an apartment subject to the rent stabilization or rent control laws. To collect a rent increase for an IAI, a DHCR order of approval is not needed. However, owners must file a notification form with DHCR for each IAI installation and it must be accompanied by before and after photos. In addition, if the apartment is occupied, the owner must also get the tenant’s written informed consent, which must be filed with DHCR. For more information, see Operational Bulletin 2024-2.

2) How is the legal rent adjusted when an MCI order is issued after a renewal lease had been executed?

If the effective date of the MCI order is before September 30 (the date used for calculating guideline adjustments), the renewal lease increase may be recalculated based on the higher legal rent, which now includes the entire dollar amount of the MCI rent increase. This will result in a larger renewal lease increase. The affected lease(s) do not have to be reissued, but the owner must give the tenant a statement showing the rental recalculation.

If the effective date of the MCI increase is after September 30, the increase in the legal rent will not be compounded by the guideline adjustment(s) until the next lease renewal.

The actual rent paid by the tenant is subject to an annual MCI rent increase cap of 2%. For more information, see Fact Sheet #24.

3) How should multiple overlapping MCI Rent Increases be applied to the rent?

When there are multiple overlapping MCI rent increases, they should be added to the rent in the order they were awarded, subject to the limitation of the annual 2% cap in collectibility. The first MCI rent increase should be completely added to the rent before an owner begins to apply the second MCI rent increase and so on.

4) If DHCR issues an MCI rent increase order for a building and the owner does not collect it in a timely manner, at what point does the collection of the increase become waived?

Owners must add an MCI rent increase to the rent and charge the tenant, limited by the annual 2% cap amount, within 120 days of the lawful collection date or the next lease renewal, whichever is greater. If an owner does not charge the tenant within the greater of these time frames, the MCI rent increase may be considered permanently waived. There may be no waiver if the delay of collection is due to the issuance of multiple MCI rent increases, as the collection is limited by the annual 2% cap.

5) The owner wants to renovate the entire building and has asked me to temporarily relocate. ­Do I have to relocate?

 No. Tenants do not have to temporarily relocate to allow an owner to renovate an entire building unless ordered by DHCR, another governmental agency, or a court of competent jurisdiction. 

6) Can I upload the before and after photographs before completing the Notification and/or Tenant's Informed Consent form?

No. You must first complete the Notification and when required, the Tenant's Informed Consent form. The acceptable file types for before and after photographs are limited to the following: .gif, .jpg, jpeg, .png, .tif, .tiff, .pdf. In addition, the number of before pictures uploaded must equal the number of after pictures uploaded in order for you to successfully submit your Notification.

7) I previously filed an IAI Notification application for an apartment. I realize that it contained an error. Can I file an Amended Notification application?

Yes. However, you will also need to file an amended annual apartment registration, if one was already filed, which also contained the erroneous information. For improvements made to occupied apartments the Tenant's Informed Consent form will also need to be amended, filed with DHCR, and provided to the tenant. The IAI information entered needs to be consistent in all documents. Amended filings, if done in a timely manner, do not require DHCR approval. If not filed timely, you need to file an Administrative Determination request to obtain DHCR approval. For more information, please see Restrictions and Directions on Filing Amended Registrations.