Sec. 26-509. APPLICATION TO DEPARTMENT OF HOUSING PRESERVATION
AND DEVELOPMENT FOR RENT INCREASE EXEMPTIONS AND
EQUIVALENT TAX ABATEMENT FOR RENT REGULATED
PROPERTY OCCUPIED BY CERTAIN SENIOR CITIZENS.
a. Commencement of department of housing preservation and
development
(1) Notwithstanding any provisions of this chapter to the
contrary, on and after October first, nineteen hundred
eighty, the department of housing preservation and
development shall grant rent increase exemption orders
or tax abatement certificates pursuant to this section
and applications for such orders and certificates and
renewal applications shall be made to the department of
housing
(2) the department of housing preservation and development
shall have the power, in relation to any application
for a rent increase exemption order or tax abatement
certificate, to determine the lawful stabilization
rent, but it shall not receive applications for
adjustment of the initial legal regulated rent pursuant
(3) The department of finance, and the department of
housing preservation and development may promulgate
such rules and regulations as may be necessary to
effectively carry out the provisions of this section.
b. Rent increase exemptions for certain senior citizens
(1) No increase in the legal regulated rent shall be
collectible from a tenant to whom there has been issued
a currently valid rent exemption order pursuant to this
subdivision, except as provided in such order, if such
increase is a lawful increase in the monthly legal
regulated rent over the rent legally payable on the
eligibility date which is provided under a two year
lease, or under such other term as regards dwelling
units subject to the hotel stabilization provisions of
this chapter, for an increase in rent:
(i) pursuant to an order of the New York city rent
guidelines board, or
(ii) based upon an owner hardship rent increase order
issued by the state division of housing and
community renewal.
(2) A tenant is eligible for a rent exemption order
pursuant to this section if:
(i) the head of the household residing in the
housing accommodation is sixty-two years of age
or older and is entitled to the possession or to
the use or occupancy of a dwelling unit.
Nothing herein contained shall render ineligible
for benefits persons receiving supplemental
security income or additional statement
payments, or both, under a program administered
by the United States department of health and
human services or by such department and the New
York state department of social
(ii) the aggregate disposable income (as defined by
regulation of the department of housing
preservation and development) of all members of
the household residing in the housing
accommodation does not exceed fifteen thousand
dollars per year, after deduction of federal,
state and city income and social security taxes.
For purposes of this subdivision, "aggregate
disposable income" shall not include increases
in benefits accorded pursuant to the social
security act which take effect after the
eligibility date of a head of the household
receiving benefits under this section whether
received by the head of the household or any
other member of the household.
(iii) (a) in the case of a head of the household
who does not receive a monthly allowance for
shelter pursuant to the social services law,
the maximum rent for the housing
accommodation exceeds one-third of the
aggregate disposable income or subject to the
limitations contained within item (c) of
subparagraph (i) of paragraph three of this
subdivision, if any expected lawful increase
in the maximum rent would cause such maximum
rent to exceed one-third of the aggregate
disposable income; or
(b)in the case of a head of the household who
receives a monthly allowance for shelter
pursuant to the social services law, the
maximum rent for the housing accommodation
exceeds the maximum allowance for shelter
which the head of the household is entitled
to receive pursuant to the social services
law, or subject to the limitations contained
within item (c) of subparagraph (i) of
paragraph three of this subdivision, if any
expected lawful increase in the maximum rent
would cause such maximum rent to exceed the
maximum allowance for shelter which the head
of the household is entitled to receive.
(3) (i) A rent exemption order pursuant to this
subdivision shall provide:
(a)in the case of a head of the household who
does not receive a monthly allowance for
shelter pursuant to the social services law,
that the landlord may not collect from the
tenant to whom it is issued rent at a rate in
excess of either one-third of the aggregate
disposable income, or the rent in effect
immediately preceding the eligibility date,
whichever is greater; or
(b)in the case of a head of the household who
receives a monthly allowance for shelter
pursuant to the social services law, that the
landlord may not collect from the tenant to
whom it is issued rent a rate in excess of
either the maximum allowance for shelter
which the head of the household is entitled
to receive, or the rent in effect immediately
preceding the eligibility date, whichever is
greater; and
(c)that the landlord may collect from the tenant
increases in rent based on an electrical
inclusion adjustment or an increase in
dwelling space, services or equipment.
(ii) Each such order shall expire upon termination of
occupancy of the housing accommodation by the
tenant to whom it is issued. The landlord shall
notify the department of housing preservation
and development, on a form to be prescribed by
such department, within thirty days of each such
termination of occupancy.
(4) Any landlord who collects, or seeks to collect or
enforce, rent from a tenant in violation of the terms
of a rent exemption order shall, for the purposes of
all remedies, sanctions and penalties provided in this
chapter, be deemed to have collected or attempted to
collect or enforce, a rent in excess of the legal
regulated rent.
(5) A rent exemption order shall be issued to each tenant
who applies to the department of housing preservation
and development in accordance with its regulations and
who is found to be eligible under this subdivision.
Such order shall take effect on the first day of the
first month after receipt of such application by the
department of housing preservation and development,
except that where any other increase in the legal
regulated rent within ninety days of the issuance of
the order increasing the tenant's maximum rent which a
tenant is not exempted from paying the rent exemption
order shall without further order of the department of
housing preservation and development take effect as of
the effective date of said order increasing the
tenant's rent including any retroactive increments
collectible pursuant to such order.
(6) A rent exemption order shall be valid for the period of
the lease or renewal thereof upon application by the
tenant; provided, that upon any such renewal
application being made by the tenant, any rent
exemption order then in effect with respect to such
tenant shall be deemed renewed until such time as the
department of housing preservation and development
shall have found such tenant to be either eligible or
ineligible for a rent exemption order but in no event
for more than six additional months. If such tenant is
found eligible, the order shall be deemed to have taken
effect upon expiration of the exemption In the event
that any such tenant shall, subsequent to any such
automatic renewal, not be granted a rent exemption
order, such tenant shall be liable to the owner for the
difference between the amounts the tenant has paid
under the provisions of the automatically renewed order
and the amounts which the tenant would have been
required to pay in the absence of such order. Any rent
exemption order issued pursuant to this subdivision
shall include provisions giving notice as to the
contents of this paragraph relating to automatic
renewal of rent exemption orders and shall include
provisions giving notice that the tenant must enter
into either a one or two year renewal lease in order to
be eligible for a rent exemption. The notice that each
tenant receives from the owner relating to the right to
a renewal lease shall contain similar information Any
application or renewal application for a rent exemption
order shall also constitute an application for a tax
abatement under such section. The department of housing
preservation and development may, with respect to
renewal applications by the tenants whom it has found
eligible for rent exemption orders prescribe a
simplified form including a certification of the
applicant's continued eligibility in lieu of a detailed
statement of income and other qualifications.
(7) Notwithstanding any other provision of law, when a head
of a household to whom a then current, valid rent
exemption order has been issued under this chapter,
chapter three or chapter seven of this title moves his
or her principal residence to a subsequent dwelling
unit subject to regulation under this chapter, the head
of the household may apply to the department of housing
preservation and development for a rent exemption order
relating to the subsequent dwelling unit, and such
order may provide that the head of the household shall
be exempt from paying that portion of the legal
regulated rent for the subsequent dwelling
(i) the amount by which the rent for the subsequent
dwelling unit exceeds the last rent, as reduced,
which the head of the household was required to
actually pay in the original dwelling unit;
(ii) the last amount deducted from the maximum rent
or legal regulated rent meaning the most recent
monthly deduction for the applicant in the
original dwelling unit pursuant to this section
or section 26-605 of this title; or
(iii) where the head of the household does not receive
a monthly allowance for shelter pursuant to the
social services law, the amount by which the
legal regulated rent of the subsequent dwelling
unit exceeds one-third of the combined income of
all members of the household.
Such certificate shall be effective as of the first day
of the month in which the tenant applied for such
exemption or as of the date the tenant took occupancy
of the subsequent dwelling unit, whichever is later
provided both occur after the effective date of this
section.
(8) (i) When a dwelling unit subject to regulation
under this chapter is later reclassified to a
dwelling unit subject to regulation under
chapter three of this title, the eligibility of
a head of the household to receive a rent
increase exemption order upon such
reclassification shall be governed by paragraph
eight of subdivision m of section 26-405 of this
title.
(ii) When a dwelling unit subject to regulation under
this chapter is later reclassified to a dwelling
unit subject to the provisions of article II,
IV, V or XI of the private housing finance law
or subject to a mortgage insured or initially
insured by the federal government pursuant to
section two hundred thirteen of the national
housing act, as amended, the eligibility of a
head of the household to receive a rent increase
exemption order upon such reclassification shall
be governed by section 26-605.1 of this title.
(9) notwithstanding any other provision of law to the
contrary, where a head of household holds a current,
valid rent exemption order and, after the effective
date of this paragraph, there is a permanent decrease
in aggregate disposable income in an amount which
exceeds twenty percent of such aggregate disposable
income as represented in such head of the household's
last approved application for a rent exemption order or
for renewal thereof, such head of the household may,
upon renewal or one year after the issuance or renewal
of such rent exemption order, apply for a
redetermination of the amount set forth therein. Upon
application, such amount shall be redetermined so as to
re-establish the ratio of adjusted rent to aggregate
disposable income which existed at the time of approval
of such head of the household's last application for a
rent exemption order or for renewal thereof; provided,
however, that in no event shall the amount of adjusted
rent be redetermined to be (i) in the case of a head of
the household who does not receive a monthly allowance
for shelter pursuant to the social services law, less
than one-third of the aggregate disposable income; or
(ii) in the case of a head of the household who
receives a monthly allowance for shelter pursuant to
such law, less than the maximum allowance for shelter
which such head of the household is entitled to receive
pursuant to the social services law. For purposes of
this paragraph, a decrease in aggregate disposable
income shall not include any decrease in such income
resulting from the manner in which such income is
calculated pursuant to any amendment to paragraph c of
subdivision one of section four hundred sixty-seven-b
of the real property tax law or any amendment to the
regulations of the department of housing preservation
and development made on or after April first, nineteen
hundred eighty-seven. For purposes of this paragraph,
"adjusted rent" shall mean legal regulated rent less
the amount set forth in a rent exemption order.
c. Tax abatement for properties subject to rent exemption
order.
(1) Tax abatement, pursuant to the provisions of section
four hundred sixty-seven-b of the real property tax
law, shall be granted with respect to any real property
for which a rent exemption order is issued under
subdivision b of this section to the tenant of any
housing accommodation contained therein. The rent
exemption order shall also constitute the tax abatement
certificate.
(2) The real estate tax imposed upon any real property for
which a rent exemption is issued, shall be reduced and
abated by an amount equal to the difference between:
(i) the sum of the maximum rents collectible under
such orders, and
(ii) the sum of rents that would be collectible from
the tenants of such housing accommodations if no
exemption had been granted pursuant to
subdivision b of this section.
(3) For any individual housing accommodation, the tax
abatement computed pursuant to this subdivision shall
be available with respect to a period commencing on the
effective date of the initial rent exemption order, and
ending on the expiration date of such order or on the
effective date of an order terminating the rent
exemption.
(4) Prior to the commencement of each fiscal year, the
department of housing preservation and development
shall notify the department of finance of the total
amount of taxes to be abated under this section with
respect to each property for which rent exemption
orders were in effect for all or any part of the
preceding calendar year. The commissioner of finance
shall make the appropriate adjustment in the real
estate tax payable in such fiscal year
(5) Tax abatement pursuant to this section shall be in
addition to any other tax abatement authorized by law,
but shall not reduce the tax for any fiscal year below
zero. In the event that the tax abatement certificate
authorizes an amount of deduction in excess of the real
estate installment, then the balance may be applied to
any subsequent installment until exhausted. In such a
case the owner shall submit with his or her real estate
tax bill and remittance, a verified statement in such
form as prescribed by the commissioner of finance
setting forth the carry over amount and the amounts
previously applied provided however, that at the
request of the owner such balance shall be paid to the
owner by the commissioner of finance in lieu of being
applied to any subsequent installment, except where the
owner is in arrears in the payment of real estate taxes
on any property. For the purposes of this paragraph,
where the owner is a corporation, it shall be deemed to
be in arrears when any of the officers directors or any
person holding an interest in more than ten percent of
the issued and outstanding stock of such corporation is
in arrears in the payment of real estate taxes on any
property; where title is held by a nominee, the owner
shall be deemed to be in arrears when the person for
whose benefit such title is held is in arrears in the
payment of real estate taxes on any property.
d. Notwithstanding the provisions of this chapter, a tenant who
resides in a dwelling unit which becomes subject to this
chapter upon the sale by the city of New York of the
building in which such dwelling unit is situated may be
issued a rent increase exemption order for increases in rent
which occurred during ownership of such building by the city
of New York provided that such tenant would have been
otherwise eligible to receive a rent increase exemption
order at the time of such increase but for the fact that
such tenant occupied a dwelling unit owned by the city of
New York and was therefore not subject to this chapter.
Application for such rent increase exemption orders shall be
made within one year from the date such building is sold by
the city of New York within one Year of the effective date
of this provision, whichever is later.