File 2019 Fuel Cost Adjustment Forms Online by April 1

On Jan. 22, the DHCR issued new fuel cost adjustment factors for rent-controlled apartments for the 2018 calendar year. The prices are based on a study of home heating oil prices provided by the NYC Rent Guidelines Board oil survey, a NYS Energy Research and Development Authority report, rate schedules for utility companies providing heating fuel, and a survey of retail coal vendors. During the calendar year for 2018, the findings show that fuel prices generally increased or had no change, with one exception for electricity.

Owners who use electricity, which has decreased in price, and who have obtained a rent increase for fuel cost adjustment since Dec. 31, 1979, are required to notify any affected tenants of, and file a report with the DHCR for, a rent reduction for fuel costs by April 1, 2019. If an owner fails to do so, all rent adjustments for fuel costs previously obtained will be forfeited for a period of 12 months and the rent reduction will be retroactive to Jan. 1, 2019. Similarly, for those categories of fuel that increased in cost, the owner must file by April 1, 2019.

The DHCR requires online filing of the 2019 Owner’s Report, Certification and Notice of Fuel Cost Adjustment Eligibility. Paper applications won’t be accepted. To file forms online, go to https://apps.hcr.ny.gov/FuelCost/.

Send Forms to Tenants

With the online filing system, you’ll be able to print out the copies of forms you need to give to tenants:

Owner’s Report, Certification and Notice of Fuel Cost Adjustment Eligibility—2018 [RA-33.10 (01/19)]. Give each rent-controlled tenant copies of Part I (Building Data), Part II (Fuel Data), Part III (Computation of Fuel Cost Adjustment), Part V (Notice to Tenant of Fuel Cost Adjustment), and the “Questions and Answers” part of the Owner’s Report form.

Schedule A—Conversion Table [RA-33.10 Sched. A (01/19)]. Give each rent-controlled tenant a copy of this form only if you used two types of fuel in your building last year (for example, both oil and gas). Get proof that you either handed the forms to a tenant or mailed them, especially if you suspect the tenant is likely to challenge the cost adjustment. Tenants often challenge the legality of a fuel cost adjustment by claiming that they never got copies of the forms.

If you hand-deliver the forms, have each tenant sign an acknowledgment of receipt. Or you can have each tenant sign and date your copies of the forms. If you mail the forms, your best bet is to get a certificate of mailing from the Post Office. In 2006, an owner appealed a District Rent Administrator denial of fuel cost adjustments for 2004 because the owner had previously obtained a fuel cost rent increase and didn’t file a timely 2004 report of a fuel price decrease. The owner won by submitting copies of certificates of mailing of the fuel report to the DHCR dated within the deadline for filing [Theodosopoulos: DHCR Adm. Rev. Docket No. UD120036RO, July 2006].

Cost Adjustments Are Cumulative

Fuel cost adjustments for a tenant are cumulative each year. If you qualify for an increase in 2019, add that increase amount to the cost adjustment you charged the tenant in 2018. The total is your 2019 cost adjustment amount.

Computing the Cost Adjustment

The rent adjustment is calculated by multiplying the Price Change by the Actual Annual Consumption Per Room, not to exceed the Annual Maximum Consumption Standard Per Room for the type of fuel used in the building. You can find the price change and cap in the chart, 2019 Fuel Cost Adjustment Data. That amount is then multiplied by 75 percent (.75) and divided by 12 to arrive at the Monthly Rent Adjustment Per Room for the building.

Then to get the monthly rent adjustment for any particular rent-controlled apartment, multiply the result of the Monthly Rent Adjustment Per Room by the number of rooms in that apartment. Add the adjustment to the total cost adjustment amount you were allowed in 2018. The result is your 2019 total fuel cost adjustment.

If MCR Plus Cost Adjustment Exceeds MBR

When you add the 2019 fuel cost adjustment for an apartment to the current maximum collectible rent (MCR), the result could exceed the sum of the apartment’s MBR and the total allowable fuel cost adjustment amount indicated in Part IV of the Owner’s Report form.

If that happens, you can still collect the entire fuel cost adjustment, according to the DHCR, but only if you can certify that your annual earnings won’t exceed 8.5 percent (what the DHCR calls the “statutory return”) of your property’s value (that is, its current “equalized assessed value”).

To make this certification, check off the box near the end of Part IV and the box near the end of Part V (Certification A) of the Owner’s Report form. And date and sign the statements that appear next to those boxes. You don’t have to submit proof with the form. But you may have to submit proof later on if a tenant challenges the fuel cost adjustment.