PART 2521 -- LEGAL REGISTERED AND REGULATED RENTS
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TABLE OF CONTENTS
Section 2521.1. Initial legal registered rents for housing
accommodations.
2521.2. Legal regulated rents for housing
accommodations.
2521.3. Classification of buildings.
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Sec. 2521.1. INITIAL LEGAL REGISTERED RENTS FOR HOUSING
ACCOMMODATIONS.
(a) (1) For housing accommodations which on March 31, 1984
were subject to the City Rent Law, and became vacant
after that date, and which are no longer subject to the
City Rent Law, and are rented thereafter subject to the
RSL, the initial legal registered rent shall be the
rent agreed to by the owner and the tenant and reserved
in a lease or provided for in a rental agreement
subject to the provisions of this Code, provided that
such rent is registered with the DHCR pursuant to Part
2528 of this Title, and subject to a tenant's right to
a Fair Market Rent Appeal to adjust such rent pursuant
to section 2522.3 of this Title.
(2) For housing accommodations which on March 31, 1984
were subject to the penalties provided in former
section YY51-4.0 of the Administrative Code of the City
of New York, and which become vacant thereafter, the
initial legal registered rent for the first rent
stabilized tenant shall be the rent established by the
DHCR for the prior tenant, increased by the guidelines
rate of rent adjustments applicable to the new lease
plus such other rent increases as are authorized
pursuant to section 2522.4 of this Title, and shall not
be subject to a Fair Market Rent Appeal pursuant to
section 2522.3 of this Title.
(b) For those housing accommodations for which the tenant files
a timely challenge in accordance with section
2526.1(a)(3)(ii) of this Title to the initial legal
registered rent, such rent shall be determined by the DHCR
as follows:
(1) For housing accommodations other than in hotels, the
rent charged paid on April 1, 1980, plus the lawful
increases charged and paid up to March 31, 1984; for
housing accommodations not required to be registered by
June 30, 1984, the rent charged and paid four years
prior to the date the housing accommodation was first
required to be registered plus such lawful increases
and adjustments charged and paid up to the date
immediately prior to the registration date as
determined by the DHCR.
(2) For housing accommodations located in hotels, the rent
charged and paid on April 1, 1980 plus the lawful
increases charged and paid up to March 31, 1984; or for
housing accommodations not required to be registered by
June 30, 1984, the rent charged and paid four years
prior to the date the housing accommodation was first
required to be registered plus such lawful increases
and adjustments charged and paid up to the date
immediately prior to the registration date as
determined by the DHCR; provided, however, that with
respect to any vacancy lease or vacancy rental
agreement entered into prior to August 15, 1983,
following a voluntary vacancy, the initial legal
registered rent shall be the rent charged and paid upon
such renting, plus subsequent lawful increases and
adjustments charged and paid from April 1, 1980 up to
March 31, 1984. If any vacant housing accommodation is
rented on or after August 15, 1983, the initial legal
registered rent shall be the lawful rent paid by the
most recent prior tenant plus any subsequent lawful
increases and adjustments, or if there has never been a
prior tenant, the initial legal registered rent shall
be the rent paid by the most recent hotel occupant,
plus any subsequent lawful increases and adjustments.
(c) For all other housing accommodations subject to the RSL
where a timely challenge was not made as provided for in
subdivision (b) of this section, the initial legal
registered rent shall be:
(1) for those housing accommodations required to be
registered by June 30, 1984, the rent charged and paid
as of April 1, 1984; or
(2) for those housing accommodations not required to be
registered by June 30, 1984, the rent charged and paid
on the date the housing accommodation became subject to
the registration requirements of the DHCR.
(d) (1) Notwithstanding the provisions of subdivision (c)
of this section, the initial legal registered rent for
a housing accommodation for which an overcharge
complaint or a Fair Market Rent Appeal was filed by a
tenant prior to April 1 , 1984, and not finally
determined prior thereto, shall be the April 1, 1984
rent as subsequently determined by the DHCR. Such
determination will be based upon the law or code
provision in effect on March 31, 1984.
(2) Upon determination of the initial legal registered rent
in paragraph (1) of this subdivision, legal regulated
rents subsequent to April 1, 1984 shall be determined
in accordance with section 2521.2(a) of this Part.
(e) The initial legal registered rent for a housing
accommodation first made subject to the RSL and this Code
pursuant to article 7-C of the MDL shall be the rent
established by the Loft Board under section 286(4) of the
MDL applicable to a lease offered pursuant to MDL section
286(3). Such rent shall not be subject to the proceedings
described in section 2522.3 of this Title. Notwithstanding
that the rent charged and paid during the first lease term
may have been less than such initial legal registered rent,
the owner may request that the next lease rental be the
initial legal registered rent plus the allowable increase
established by the Rent Guidelines Board, and such other
rent increases as are authorized pursuant to section 2522.4
of this Title.
(f) Notwithstanding the provisions of any outstanding lease or
other rental agreement, the initial legal registered rent
for a housing accommodation in a multiple dwelling for which
a loan is made under the PHFL shall be the initial rent
established pursuant to such law. Such rent, whether or not
the housing accommodation was previously subject to the RSL,
shall not be subject to the proceeding described in section
2522.3 of this Title. Such rent for housing accommodations
occupied prior to the granting of the loan made pursuant to
the PHFL shall take effect on the date specified in the
order establishing the rent. Notwithstanding any other
provision of the RSL or this Code, the owner of such housing
accommodation shall offer any tenant in occupancy on such
effective date or upon initial occupancy a one- or two-year
lease at the tenant's option at such rent, which offer shall
be made as soon as practicable after such rent is
established, whether or not the rent has taken or is then
permitted to take effect; and refusal of such tenant to sign
such lease, at such rent, and otherwise upon the same terms
and conditions as the expiring lease, if any, shall
constitute grounds for an action or proceeding to evict and
recover possession of the housing accommodation; provided,
however, that following the tenant's receipt of the offer of
such lease at such rent as lawfully established, a tenant in
occupancy on such date shall be allowed 30 days to sign such
lease and, if during such 30-day period, such tenant gives
the owner written notice of an intention to terminate such
tenancy and pays the rent established pursuant to law for
such month and for any extended period, the tenant shall not
be required to surrender the housing accommodation until 60
days after receipt of such offer. Notwithstanding that the
rent charged and paid during the first lease term may have
been less than such initial legal registered rent, the owner
may request that the next lease rental be the initial legal
registered rent plus the allowable increase established by
the Rent Guidelines Board.
(g) Notwithstanding any other provision of this Code, the
initial legal registered rent for a housing accommodation
first made subject to the RSL and this Code pursuant to
article XIV of the PHFL or section 2429 of article 8 of the
Public Authorities Law shall be the rent established
pursuant to law which reflects the improvements or
rehabilitation and shall be subject to subsequent adjustment
by the DHCR. Such rent shall not be subject to the
proceedings described in section 2522.3 of this Title.
Notwithstanding any other provision of the RSL or this Code:
the owner of such housing accommodation shall offer a tenant
in occupancy who first became subject to the RSL and this
Code on the effective date of such rent a one- or two-year
lease at the tenant's option at such rent, which offer shall
be made as soon as practicable after such rent is effective;
and refusal of such tenant to sign such lease at such rent,
and otherwise upon the same terms and conditions as the
expiring lease, if any, shall constitute grounds for an
action or proceeding to evict and recover possession of the
housing accommodation; provided, however, that following
tenant's receipt of the offer of such lease at such rent, a
tenant in occupancy on such effective date shall be allowed
30 days to sign such lease and, if during such 30-day
period, such tenant gives the owner written notice of an
intention to terminate such tenancy and pays the rent
established pursuant to law while in occupancy, the tenant
shall not be required to surrender the housing accommodation
until 60 days after receipt of such offer. Notwithstanding
that the rent charged and paid during the first lease term
may have been less than such initial legal registered rent,
the owner may request that the next lease rental be the
initial legal registered rent plus the allowable increase
established by the Rent Guidelines Board.
(h) If a housing accommodation is rehabilitated pursuant to
either article XIV of the PHFL or section 2429 of article 8
of the Public Authorities Law, and article XV of the PHFL,
the provisions in subdivision (f) of this section shall
apply, rather than the provisions of subdivision (g), if HPD
elects to establish rents for the housing accommodation
pursuant to article XV of the PHFL.
(i) The initial legal registered rent for a housing
accommodation constructed pursuant to section 421-a of the
Real Property Tax Law shall be the initial adjusted monthly
rent charged and paid but not higher than the rent approved
by HPD pursuant to such section for the housing
accommodation or the lawful rent charged and paid on April
1, 1984, whichever is later.
(j) The initial legal registered rent for housing accommodations
subject this Code solely as a condition of receiving or
continuing to receive benefits pursuant to section 11-243
(formerly J51-2.5) or 11-244 (formerly J51-5.0) of the
Administrative Code, as amended, shall be the rent charged
the initial rent-stabilized tenant or the lawful rent
charged and paid on April 1, 1984, whichever is later, and
shall not be subject to a Fair Market Rent Appeal pursuant
to section 2522.3 of this Title. However, as to any housing
accommodation which previously received tax benefits
pursuant to section 11-243 (formerly J51-2.5) or 11-244
(formerly J51-5.0), was not covered by the provisions of the
RSL on June 18, 1985, and was made subject to such law by
the provisions of chapters 288 and 289 of the Laws of New
York for the year 1985 (as amended), the initial legal
registered rent shall be the rent charged and paid on May
30, 1985, or the maximum rent which could have been charged
if the housing accommodation had been continuously subject
to the RSL for the entire tenancy of the tenant in occupancy
on May 30, 1985, whichever is greater.
(k) Notwithstanding the provisions of the RSL or any other
provision of this Code, the initial legal registered rent
upon completion of the rehabilitation of a Class B multiple
dwelling, Class A multiple dwelling used for single-room
occupancy purposes, lodging house or a substantially vacant
building intended to be used after rehabilitation for single-
room occupancy purposes for which a loan is made for such
rehabilitation on or after September 1, 1985, under article
VIII or VIII-A of the PHFL, shall be the initial rent
established by HPD pursuant to such law. Such rent, whether
or not the housing accommodation was previously subject to
the RSL, shall not be subject to the proceeding described in
section 2522.3 of this Title. Such rent shall take effect on
the date specified in the order establishing the rent.
Notwithstanding the provisions of the RSL or any other
provision of this Code, the owner of such housing
accommodation shall offer any tenant in occupancy on such
effective date a one or two-year lease, at the tenant's
option, at such rent, which offer shall be made as soon as
practicable after such rent is established. Refusal of such
tenant to sign such lease at such rent, and otherwise upon
the same terms and conditions as the expiring lease, if any,
shall constitute grounds for an action or proceeding to
evict and recover possession of the housing accommodation;
provided, however, that following the tenant's receipt of
the offer of such lease at such rent as lawfully
established, a tenant in occupancy on such date shall be
allowed 30 days to sign such lease and, if during such 30-
day period, such tenant gives the owner written notice of an
intention to terminate such tenancy and pay the rent
established pursuant to law for such month and for any
extended period, the tenant shall not be required to
surrender the housing accommodation until 60 days after
receipt of such lease offer. Notwithstanding that the rent
charged and paid during the first lease term may have been
less than such initial legal registered rent, the owner may
request that the next lease rental be the initial legal
registered rent plus the allowable increase established by
the Rent Guidelines Board, and such other rent increases as
are authorized pursuant to section 2522.4 of this Title.
(l) For housing accommodations whose rentals were previously
regulated under the PHFL, or any other State or Federal law,
other than the RSL or the City Rent Law, upon the
termination of such regulation, the initial legal registered
rent shall be the rent charged to and paid by the tenant in
occupancy on the date such regulation ends. For housing
accommodations which are vacant on the date the building
first became subject to the RSL and this Code, such rent
shall be the rent charged and paid by the most recent
tenant, in addition to rental subsidies, if any, which shall
be subject to vacancy guidelines increases, and shall not be
subject to a Fair Market Rent Appeal pursuant to section
2522.3 of this Title.
(m) Notwithstanding any other provision of this Code, except as
provided in paragraph (2) of this subdivision, governmental
agencies or public benefit corporations may enter into an
agreement with the DHCR, which shall be incorporated into an
order of the DHCR, setting forth the conditions under which:
(1) projects receiving assistance or financing from such
agencies may register higher and lower initial legal
rents for units subject to occupancy and rent
restrictions by such agencies, which rents may then be
adjusted pursuant to the RSL and this Code, and shall
not be subject to the proceedings described in section
2522.3 of this Title; or
(2) projects whose rentals were previously regulated under
the PHFL or any other State or Federal law, other than
the RSL or the City Rent Law, upon the date when such
regulation ends, may register higher and lower initial
legal rents for units which have been subject to
occupancy and rent restrictions pursuant to such laws,
which rents may then be adjusted pursuant to the RSL
and this Code, and shall not be subject to the
proceedings described in section 2522.3 of this Title.
Where the DHCR was the agency regulating rentals
pursuant to the PHFL, such terms and conditions shall
be incorporated into an order of the DHCR.
Such agreement or order shall also set forth the conditions
under which the higher and lower legal regulated rents may
be charged, with due consideration of equities as set forth
in section 2522.7 of this Title.
Sec. 2521.2. LEGAL REGULATED RENTS FOR HOUSING ACCOMMODATIONS.
(a) The legal regulated rent shall be the initial legal
registered rent first established pursuant to section 2521.1
of this Part, and thereafter shall be the initial legal
registered rent as it may be adjusted pursuant to the RSL
and this Code, or the rent stated in the annual registration
statement filed four years prior to the most recent
registration statement as adjusted pursuant to the RSL and
this Code, whichever is later.
(b) Where the legal regulated rent is established and a rent
lower than the legal regulated rent is charged and paid by
the tenant, upon vacancy of such tenant, the legal regulated
rent previously established plus the most recent applicable
guidelines increases, plus such other rent increases as are
authorized pursuant to section 2522.4 of this Title, may be
charged a new tenant.
Sec. 2521.3. CLASSIFICATION OF BUILDINGS.
(a) Upon application by a tenant or owner, the DHCR shall issue
an order determining a building's classification based upon
the services provided and other relevant factors. Except as
provided in subdivisions (c) and (d) of this section, if it
is determined that such building is not a hotel, the DHCR
shall classify the building as an apartment building unless
the owner restores sufficient services to maintain a hotel
classification in accordance with subdivision (b) of this
section. If the building is reclassified, then the housing
accommodations therein shall thereafter be subject to the
provisions of this Code applicable to apartment buildings,
at the legal regulated rent for each housing accommodation
as determined by the order of the DHCR, plus lawful
increases and adjustments allowed pursuant to this Code. In
order for an owner to retain or continue the building's
classification as a hotel, he or she must provide, in
addition to any other services he or she is or was providing
pursuant to section 2520.6(r) of this Title, all four of the
following services:
(1) maid service, consisting of general housecleaning at a
frequency of at least once a week;
(2) linen service, consisting of providing clean linens at
a frequency of at least once a week;
(3) furniture and furnishings, including at a minimum a
bed, lamps, storage facilities for clothing, chair and
mirror in a bedroom; such furniture to be maintained by
the hotel owner in reasonable condition; and
(4) lobby staffed 24 hours a day, seven days a week by at
least one employee.
(b) A building's classification as a hotel will not be retained
or continued where the DHCR determines that 51 percent of
the permanent tenants are not receiving maid and linen
service, except that all tenants receiving such services
shall be entitled to receive the services for the duration
of their occupancy. Where an owner is providing maid and
linen service to 51 percent of the permanent tenants and the
owner wishes to maintain the building's classification as a
hotel, the owner shall be afforded 90 days to restore all
four hotel services described above, without any additional
rent increase for such services, to all of the buildings
permanent tenants, except that those tenants whose housing
accommodations were rented to them as apartment (not hotel)
housing accommodations shall have the option of rejecting
restoration of hotel services and be subject to the RSL,
pursuant to the provisions of this Code applicable to
apartment buildings, until they vacate, at which time the
owner shall be required to restore hotel services to the
housing accommodations.
(c) Notwithstanding the provisions of subdivision (a) of this
section, single-room occupancy facilities such as single-
room occupancy hotels or rooming houses, as defined in the
MDL, shall not be subject to reclassification pursuant to
this section. However, such housing accommodations shall be
included in the definition of hotel as set forth in section
2520.6(b) of this Title for all other purposes of this Code,
except that the four minimum services enumerated in such
section shall not be required to be provided unless such
services were provided on the applicable base dates pursuant
to section 2520.6(r)(4) of this Title.
(d) Notwithstanding the provisions of subdivision (a) of this
section, the DHCR may decline to reclassify a hotel to
apartment building status if it finds that the owner has
reduced any of the four hotel services listed in such
subdivision (a) for the purpose of reclassification of the
building.