Fuel Cost Adjustment
Rent Controlled apartments are subject to separate rent adjustments based on the increase or decrease in the cost of heating fuel. This rent adjustment is based on fuel price changes between the beginning and end of the year prior to the adjustment. (In other words, the 1999 FCA was based on 1998 fuel costs.) Only tenants in Rent Controlled apartments located in NYC are subject to this FUEL COST ADJUSTMENT.
To be eligible for FCA increases, Landlords must certify that they are maintaining essential services. If there is a Rent Reduction Order in effect for the Landlord's failure to provide heat and /or hot water, the Landlord may not collect FCA's until 12 months after the date the rent is restored (which can take a couple of years in some cases). All Landlords with Rent Controlled tenants must file if there is a decrease in fuel costs. Landlords are not required to file when there is an increase in fuel costs, however, failure to do so, aside from losing the rent increases, can make it difficult and confusing to calculate and file FCA's when there are decreases which must be filed. All buildings with Rent Controlled apartments may qualify for FCA's, even buildings that have not qualified for Maximum Base Rent (MBR) increases.
To obtain the rent increase effective January 1st, the owner must complete, certify, and serve upon each eligible tenant the Owner's Report, Certification, and Notice of Fuel Cost Adjustment Eligibility (DHCR Form RA-33.10). In order to complete the form, the Landlord must obtain a statement of fuel consumption (gallons, therms) from their fuel supplier. The forms must be filed within 60 days after DHCR releases the fuel consumption and price change standards (usually between February and April). These should be sent to the tenant by Certificate of Mailing. Landlords must also file a master copy of the Report with DHCR, together with Schedule A or B, where applicable, and a Schedule of Monthly Rent Increases for all the Rent Controlled tenants who were served with copies of the Fuel Cost Adjustment Report. This should be sent Certified Mail - Return Receipt Requested.
FUEL COST ADJUSTMENTS are retroactive to January 1st of each year provided the Landlord files the Report timely. For Reports filed with DHCR after the 60 day period, the increase is prospective only. Where a Landlord obtained one or more fuel cost increases previously and the price of fuel decreases, he/she must file a timely report or the entire fuel cost adjustment will be suspended for that present year. All decreases are retroactive to January 1st. (Remember, it's always in the tenant's favor!)
Many times, tenants are confused by the calculation and amount of FCA's and retroactive FCA's, especially in even years, when MBR increases are usually also retroactive to January 1st. If the tenant believes that FCA is inaccurate or unjustified, the tenant may challenge the increase. The tenant is supposed to contact the Landlord first and attempt to resolve the disagreement, however, many Landlords are unable to explain it to the tenants satisfactorily.
DHCRexpert.com prepares all Fuel Cost Adjustment forms and sends them to the tenants with a cover letter explaining how much they must pay and why. We also provide Certificates of mailing and file the Master forms with DHCR via Certified mail - Return Receipt Requested.
Click here to Order Fuel Cost Adjustments.