Information for New Rental Property Owners

Prospective buyers of residential rental property may use the checklist below to insure that the property is in compliance with the rent law:

• Visit the Rent Stabilization Program office and review the property file to ensure that the property is properly registered, i.e., that the necessary forms have been filed and registration fees have been paid, and that the rents being charged are within the legal maximum.

• Make sure all deposits are accounted for and placed in an interest-bearing account at a savings and loan.

Increased costs that result from the purchase of the property will not provide the basis for a rent increase. If the current rental income is not sufficient to cover the new mortgage, the new owner should be prepared to absorb the difference.

The fact that a property is registered does not ensure that the rents are legal. If the seller has not complied with the rent laws and the rents are illegally high, the new owner will be required to lower rents to the legal level and may be required to refund rent overcharges to the tenants. Prospective buyers who are unsure of the legality of the rents in a building should require the seller to obtain a Certificate of Permissible Rent Levels from the Board and should consult an attorney to learn the best way to protect themselves from having to refund any rent overcharges collected by the seller.

All registration fees are due by July 1st of each year. Any unpaid fees which are outstanding on the date of sale are the responsibility of the new owner, who must file an amended registration statement indicating that there has been a change of ownership.