New York State
Division of Housing and Community Renewal
Office of Rent Administration
Gertz Plaza, 92-31 Union Hall St.
Jamaica, New York 11433
Public Information: (718)739-6400
POLICY STATEMENT 89-7
COLLECTION OF ADMINISTRATIVE FEES: HOUSING ACCOMMODATIONS
PERMANENTLY NOT SUBJECT TO THE RSL OR ETPA AND APPLICATION FORM
Section 26-517.1 of the Rent Stabilization Law and Section 8 of
the Emergency Tenant Protection Act provide for the imposition of
a fee on owners of housing accommodations "subject" to the RSL or
ETPA to assist DHCR in defraying the cost of administering such
laws.
It is this Task Force's interpretation of the relevant statutes
that only those housing accommodations which are permanently not
subject to the RSL or ETPA are excused from such assessment. What
follows is applicable only to the issue of whether an owner is
responsible for payment of the fee authorized by
Section 26-517.1 RSL.
The purpose of this memo is to list, those legal situations which
cause the permanent decontrol of housing accommodations.
THE RENT STABILIZATION LAW & CODE IN N.Y.C.
Section 26-504 of the RSL and Section 2520.11 of the Rent
Stabilization Code specify the grounds for both permanent
decontrol and temporary exemption from the RSL & Code. While
this memo will deal solely with the grounds for permanent
decontrol, it is not always easy to separate the decontrol from
the temporary exemption.
"Permanent" may not always mean "eternal." The following
constitute grounds for permanent decontrol from Rent
Stabilization coverage in New York City and, therefore, exempt
the owner from the payment of the administrative fee:
1. A rent controlled apartment while it is still subject to
Rent Control (Sec. 2520.11(a)).
2. Housing accommodations owned by the United States, the State
of New York, any political subdivision, agency or
instrumentality thereof, any municipality or any public
housing authority (Sec. 2520.11(b)).
Example: An "In Rem" building or a building owned by HUD because
it foreclosed on the FHA insured mortgage. But, not a "pre-
empted" building because this constitutes a temporary exemption.
3. Housing accommodations for which rentals are fixed by DHCR,
HPD or UDC pursuant to laws other than the RSL and/or ETPA
and which do not become subject to the RSL and Code after
the establishment of initial rents pursuant to such other
laws. (Sec. 2520.11(a)).
Example: A Mitchell-Lama building while subject to PHFL.
4. Buildings containing fewer than six housing accommodations
on the date the building first became subject to the RSL.
(Sec. 2520.11(d)).
Example: A building containing five housing accommodations on
July 1, 1974, the effective date of ETPA. According to court
rulings, if a 6th unit is subsequently added, the building will
become subject to RSL. A building will remain subject to the RSL
if after the "base date" the number of housing accommodations is
reduced to less than 6 units. A "garden apartment" development
is subject to the RSL even though the individual certificates of
occupancy are for one or two family houses. Depending on such
factors as common ownership and common facilities (common heating
plant, water sewer, utility lines, roof, etc.) two, three family
houses may become subject to the RSL as a six family house.
5. Housing accommodations in buildings completed or buildings
substantially rehabilitated as family units on or after
January 1, 1974, except such buildings which are made
subject to this Code by provisions of the RSL or any other
statute (Sec. 2520.11(e)).
Example: A newly constructed building effectuated entirely by
private financing or a "gut rehabilitation" similarly performed.
Where such construction is financed by the 421-a or "J-51"
program, the newly constructed building is subject to the RSL for
a specified period. See Items "12" and "13".
6. Housing accommodations owned by a hospital, convent,
monastery, asylum, public institution, or college or school
dormitory or any institution operated exclusively for
charitable or educational purposes on a non-profit basis,
and occupied by a tenant whose initial occupancy is
contingent upon an affiliation with such institution (Sec.
2520.11(f)).
Example: Hospital owns a building containing ten housing
accommodations, five are occupied by Nurses working at the
hospital since the hospital acquired the building; five
apartments are occupied by non-affiliated tenants. If DHCR's
registration records show ten apartments registered, DHCR should
continue to bill for the ten units until such time as the entire
building is occupied by affiliated personnel of the hospital. As
occupancy is the basis for a "temporary exemption" only and DHCR
cannot investigate each change of tenancy to determine
"affiliation," until the entire building is not subject to the
RSL, for the purpose of collecting the fee, the entire building
will remain subject to the RSL.
7. Rooms or other housing accommodations in hotels where such
housing accommodations were rented on May 31, 1968 for more
than $350.00 per month or $88.00 per week or are contained
in a hotel which was constructed after July 1, 1969 (Sec.
2520.11(g)).
Note: Hotel registration records showing exempt units in the
various hotels in New York City are in the possession of DHCR.
8. Housing accommodations in any motor court, or any part
thereof, any trailer, or trailer space used exclusively
for transient occupancy or any part thereof; or any tourist
home serving transient guests exclusively, or any part
thereof. The term tourist home shall mean a rooming house
which caters primarily to transient guests and is
known in the community as a tourist home (Sec. 2520.11(n)).
Example: What is known in common parlance as a "Motel". Also,
see Item 8 on page 7 for the definition of a "motor court" as
stated in the Tenant Protection Regulations for the counties of
Nassau, Rockland and Westchester.
9. Housing accommodations in buildings operated exclusively for
charitable purposes on non profit basis (Sec. 2520.11(j)).
Example: Housing accommodations in YMCA/YMHA building; or housing
accommodations in the hospital building itself as opposed an
apartment house owned by the hospital.
10. Housing accommodations contained in buildings owned as co-
operatives or condominiums as provided in Section 352eeee of
the General Business Law in accordance with Section
2522.5(h) of the Code and housing accommodations occupied by
the Proprietary lessee/condo owner (Sec. 2520.11(1)).
Example: Where a building has been converted to co-op ownership
pursuant to a non-eviction plan, apartments occupied by a non-
purchasing rent stabilized tenant are subject to the Rent
Stabilization Law for as long as the tenant continues to reside
therein. However, if that tenant vacated from the apartment after
the co-op has been declared effective and title passed to the
coop corporation or if the rent paying tenant buys the apartment
and continues to reside therein, the apartment is not subject to
the RSL. In a co-op eviction plan, the co-op may evict the non-
purchasing tenant three years after the plan has been declared
effective and once that period has expired, the apartment is no
longer subject to the RSL.
11. Housing accommodations used exclusively for professional,
commercial or other non-residential purposes in accordance
with the certificate of occupancy (Sec. 2520.11(n)).
Example: As this ground is an exemption based on usage, which for
the purpose of fee collection is not operative to excuse the
owner from payment of the fee because of its temporary nature,
this ground will excuse an owner from payment of the fee only
where the apartment has been converted to professional or
commercial usage and the change has been noted on the certificate
of occupancy. Also, for the owner to qualify for the decontrol on
this basis, the tenant cannot reside in the apartment.
12. Housing accommodations in buildings completed or
substantially rehabilitated as family units on or after
January 1, 1974 or located in a building containing less
than six housing accommodations, and made subject to the RSL
and Code solely as a condition of receiving "J-51" Tax
benefits or Art. XVIII PHFL funding; and thereafter receipt
of such tax benefits and supervisory period has concluded
and such housing accommodations became vacant; or, each
lease and each renewal thereof of the tenant in occupancy
when the benefit or supervisory period concluded includes a
notice informing such tenant that the housing accommodations
shall become deregulated upon the expiration of the last
lease entered into during the tax benefit or supervisory
period and states the approximate date on which such
benefits and supervisory period are scheduled to expire
(Sec. 2520.11(0)).
Example: A housing accommodation would normally not be subject to
the RSL because it was constructed on or after January 1, 1974 or
because it contains less than six housing accommodations.
However, because the owner was granted "J-51" benefits or
effectuated rehabilitations pursuant to Article XVIII PHFL, the
housing accommodations are made subject to the RSL pursuant to
the terms of such statutes. When the respective benefits or
supervisory period under each of the two statutes cited has (1)
ended and (2) the tenant has moved out of the apartment or (3)
the initial and renewal leases of the tenant in occupancy at the
end of such periods notified the tenant of the forthcoming
deregulation of the apartment and the approximate date thereof,
the housing accommodations will no longer be subject to the RSL
and the owner will not have to pay the fee.
13. Same as item "11" except that the benefit in question is
granted pursuant to Section 421-a of the Real Property Tax
Law and the housing accommodations became vacant after the
expiration of the benefit period; or, for housing
accommodations which first became subject to rent
stabilization pursuant to 421-a after July 3,1984 each lease
and each renewal thereof of the tenant in occupancy at the
time the period of tax exemption pursuant to 421-a expires,
contain the same notice as that discussed in item "11",
above. (Sec. 2520.11(p)).
Example: Same as item "12," except that the tax benefit statute
is Section 421-a Real Property Tax Law. Also, the lease
notification provision applies only to housing accommodations
becoming subject to RSL because of 421-a, only, on or after July
3, 1984.
14. Housing accommodations which would be subject to the RSL &
Code solely by reason of the Loft Law but are exempted from
the Loft Law pursuant to Sections 286(6) and 286(12) of the
MDL.
Example: Loft space which has been authorized for residential
usage by the Loft Board pursuant to the Loft Law becomes subject
to the RSL at the initial legal regulated rent set by the Loft
Board. However, when the owner buys the improvement made by the
tenant to the Loft space in accordance with Section 286(6) of the
Loft Law or where the owner and tenant, pursuant to Section
286(12) of such law agree on terms for the tenant to vacate the
housing accommodation, such unit is no longer subject to the Loft
Law and, therefore, will be not subject to the RSL. The owner is
exempt from payment of the fee for such units.
THE ETPA AND TENANT PROTECTION REGULATIONS
IN NASSAU, ROCKLAND, WESTCHESTER COUNTIES
Section 5 of ETPA and Section 2500.9 of the Tenant Protection
Regulations specify the grounds for both permanent decontrol and
temporary exemption from the ETPA and Regulations. For the most
part they are very similar to those contained in Sections 26-504
of the RSL and Section 2520.11 of the Rent Stabilization Code
and, except where clarification is needed, no new examples will
be cited. While this memo will deal solely with the grounds for
permanent decontrol it is not always easy to separate the
decontrol from the temporary exemption. "Permanent" does not
always mean "eternal". The following constitute grounds for
permanent decontrol from ETPA coverage in the ETPA counties and,
therefore, exempt the owner from the payment of the
administrative fee.
1. Housing accommodations subject to the emergency housing rent
control law (Sec. 2500.9(a) TPR).
Example: An apartment which is subject to the State Rent Control
Law.
2. Housing accommodations owned by the United States, the State
of New York, any political subdivision, agency or
instrumentality thereof, any municipality or any public
housing authority (Sec. 2600.9(b) TPR).
3. Housing accommodations in buildings in which rentals are
fixed by or subject to the supervision of the State Division
of Housing and Community Renewal under other provisions of
law, or the New York State Urban Development Corporation.
(Sec. 2500.9(c) TPR).
4. Housing accommodations in a building containing fewer than
six dwelling units (Sec. 2500.9(d)(1)TPR).
5. Housing accommodations in buildings completed or buildings
substantially rehabilitated as family units on or after
January 1, 1974 (Sec. 2500.99 (e) TPR).
6. Housing accommodations owned by a hospital, convent,
monastery, asylum, public institution, or college or school
dormitory or any institution operated exclusively for
charitable or educational purposes on a nonprofit basis
other than accommodations occupied by a tenant on the date
such housing accommodation in acquired by such institution,
or which are occupied subsequently by a tenant who is not
affiliated with such institution at the time of his initial
occupancy. (Sec. 2500.9(f) TPR.
7. Rooms or other housing accommodations in hotels. (Sec
2500.9(g) TPR).
Example: A hotel room in Long Beach, Nassau County. Unlike New
York City, hotel rooms in the three ETPA counties are not subject
to ETPA.
8. Any motor court, or any part thereof, any trailer, or
trailer space used exclusive for transient occupancy or any
part thereof; or any tourist home serving transient guests
exclusively, or any part thereof.
(1) The term motor court shall mean an establishment
renting rooms, cottages or cabins, supplying parking or
storage facilities for motor vehicles in connection
with such renting and other services and facilities
customarily supplied by such establishments, and
commonly known as motor auto or tourist court in the
community.
(2) The term tourist home shall mean a rooming house which
caters primarily to transient guests and is known as a
tourist home in the community. (Sec. 2500.9 (h) TPR).
9. Housing accommodations in buildings operated exclusively
for charitable purposes on a non-profit basis (Sec.
2500.9(j)TPR).
10. Housing accommodations contained in buildings owned as co-
operatives or condominiums for as long as the housing
accommodation is occupied by the proprietary lessee/condo
owner. However, an owner occupied-apartment or a
superintendent-occupied apartment in a non-co-op/condo
apartment building is not excused from the payment of the
administrative fee.
Dated: June 21, 1989
Elliot G. Sander
Deputy Commissioner
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DHCR Policy Statements are **promulgated** (i.e., officially
issued) by the New York State Division of Housing and Community
Renewal (DHCR) and represent **official** policy of the agency.
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Stabilization Law and various Rent Control Statutes.
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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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