The RENT STABILIZATION CODE (RSC) is issued by the New York State
Division of Housing and Community Renewal (DHCR) and is a
codification of the laws and procedures of the RENT STABILIZATION
LAW (RSL). Since 1969, Rent Stabilization has gradually replaced
Rent Control as the rent regulatory scheme applicable to
regulated apartments in New York City.
Also see: DHCR Policy Statements, DHCR Operational Bulletins,
DHCR Advisory Opinions, and various Rent Control Statutes.
Electronic versions of the documents on TenantNet
are for informational purposes only and there is no guarantee
they will be accepted by any court (or even DHCR) as true copies.
The reader is advised to obtain true copies of these documents.
Every attempt has been made to conform to the original document;
TenantNet makes no representation the enclosed material is
current or will be applied as written. The reader is advised
that DHCR often fails to properly apply, interpret or enforce
housing laws. Since housing laws are complex and often contradictory,
it is recommended the reader obtain competent legal advice from a
tenant attorney or counseling from a tenant association or
community group.
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NEW YORK STATE
RENT STABILIZATION CODE
[19 NYCRR Parts 2520-2530.1]*
* Statutory authority: N.Y.C. Admin. Code, 26-511(b),
26-518(a).
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TABLE OF CONTENTS
Part 2520. Scope
2521. Legal Registered and Regulated Rents
2522. Rent Adjustments
2523. Notices and Records
2524. Evictions
2525. Prohibitions
2526. Enforcement
2527. Proceedings Before the DHCR
2528. Registration of Housing Accommodations
2529. Administrative Review
2530. Judicial Review
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PART 2520 -- SCOPE
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TABLE OF CONTENTS
Section 2520.1. Statutory authority.
2520.2. Amendment of codes.
2520.3. Construction and implementation.
2520.4. Delegation of authority.
2520.5. Designations.
2520.6. Definitions.
2520.7. Effective date.
2520.8. Amendment or revocation.
2520.9. Filing of amendments.
2520.10 Separability.
2520.11 Applicability.
2520.12 Effect of this Code on leases and
other rental agreements.
2520.13 Waiver of benefit void.
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Sec. 2520.1. STATUTORY AUTHORITY.
This Subchapter is promulgated and adopted pursuant to the powers
granted to the Division of Housing and Community Renewal by
chapter 888 of the Laws of New York for the year 1985.
Sec. 2520.2. AMENDMENT OF CODES.
Sections I through 66, inclusive, of the code of the Rent
Stabilization Association of New York City, Inc., and sections I
through 64, inclusive, of the code of the Metropolitan Hotel
Industry Stabilization Association, Inc., as last amended, are
hereby further amended by deleting such sections in their
entirety and sections 2520.1 through 2530.1 of this Subchapter,
inclusive, are hereby adopted, and this Code shall hereafter be
known as the Rent Stabilization Code. Chapter VIII of this
Subtitle is hereby redesignated to be known as Rent Stabilization
Regulations and divided into Subchapter A--Emergency Tenant
Protection Regulations, consisting of existing Parts 2500-2510;
and Subchapter B--Rent Stabilization Code, consisting of new
Parts 2520-2530.
Sec. 2520.3. CONSTRUCTION AND IMPLEMENTATION.
This Code shall be construed so as to carry out the intent of the
Rent Stabilization Law to ensure that such statute shall not be
subverted or rendered ineffective, directly or indirectly, and to
prevent the exaction of unjust, unreasonable and oppressive rents
and rental agreements, and to forestall profiteering, speculation
and other disruptive practices tending to produce threats to the
public health, safety and general welfare; and that the policy
herein expressed shall be implemented with due regard for the
preservation of regulated rental housing.
Sec. 2520.4. DELEGATION OF AUTHORITY.
The Commissioner of Housing and Community Renewal may delegate to
a deputy commissioner, an assistant commissioner, a rent
administrator or any other person or persons, the authority to
carry out any of the duties and powers granted to him by the New
York City Rent Stabilization Law or this Code, and the Emergency
Tenant Protection Act of Nineteen Seventy-four as amended.
Sec. 2520.5. DESIGNATIONS.
When used in this Code, unless a different meaning clearly
appears from the context, the following terms shall mean and
include:
(a) RSL. Title 26 of the Administrative Code of the City of New
York, sections 26-501 through 26-520, as recodified by
chapter 907 of the Laws of New York for the year 1985,
constituting the New York City Rent Stabilization Law.
(b) ETPA. The Emergency Tenant Protection Act of Nineteen
Seventy-four.
(c) State Rent Law. The New York State Emergency Housing Rent
Control Law, commonly referred to as the State Rent Control
Law.
(d) City Rent Law. Title 26 of the Administrative Code of the
City of New York, sections 26-401 through 26-415, as
recodified by chapter 907 of the Laws of New York for the
year 1985, constituting the New York City Rent and
Rehabilitation Law, commonly referred to as the City Rent
Control Law.
(e) PHFL. The Private Housing Finance Law.
(f) MDL. The Multiple Dwelling Law.
(g) City Rent and Eviction Regulations. Regulations adopted and
promulgated by the State Division of Housing and Community
Renewal pursuant to the City Rent Law, Parts 2200-2210 of
Title 9 NYCRR, officially known as the Official Compilation
of Codes, Rules and Regulations of the State of New York.
(h) DHCR. State Division of Housing and Community Renewal in the
Executive Department.
(i) Commissioner. Commissioner of the DHCR.
(j) City Rent Agency. DHCR as defined in the City Rent Law.
(k) HPD. New York City Department of Housing Preservation and
Development.
(l) Loft Board. The board created in the City of New York
pursuant to article 7-C of the MDL, to resolve complaints of
owners of interim multiple dwellings and of residential
occupants of such buildings qualified for the protection of
MDL article 7-C, and to act upon hardship applications made
pursuant to such article.
(m) Rent Guidelines Board. The board created in the City of New
York pursuant to the RSL to establish guidelines annually
for rent adjustments for leases or other rental agreements.
(n) Office of Rent Administration. The office of the DHCR
designated by the commissioner to administer the ETPA, the
RSL and the City and State Rent Laws.
(o) District Rent Office. The local rent administration office
of the DHCR for a particular rent area in the City of New
York.
(p) Rent Administrator. The person designated by the
commissioner to issue orders based on complaints or
applications made to the DHCR.
Sec. 2520.6. DEFINITIONS.
(a) Housing accommodation. That part of any building or
structure, occupied or intended to be occupied by one or
more individuals as a residence, home, dwelling unit or
apartment, and all services, privileges, furnishings,
furniture and facilities supplied in connection with the
occupation thereof. The term housing accommodation Will also
apply to any plot or parcel of land which had been regulated
pursuant to the City Rent Law prior to July 1, 1971 and
which became subject to the RSL after June 30, 1974.
(b) Hotel. Any Class A- or Class B multiple dwelling which
provides all of the services included in the rent as set
forth in section 2521.3 of this Title.
(c) Rent. Consideration, charge, fee or other thing of value,
including any bonus, benefit or gratuity demanded or
received for, or in connection with, the use or occupation
of housing accommodations or the transfer of a lease for
such housing accommodations.
(d) Tenant. Any person or persons named on a lease as lessee or
lessees, or who is or are a party or parties to a rental
agreement and obligated to pay rent for the use or occupancy
of a housing accommodation.
(e) Initial legal registered rent. The lawful rent for the use
and occupancy of housing accommodations under the RSL or the
ETPA, as first registered with the DHCR in accordance with
the RSL, ETPA and this Code, which has not been challenged
pursuant to Part 2526 of this Title, or if challenged, has
been determined by the DHCR.
(f) Legal regulated rent. The initial legal registered rent as
adjusted in accordance with this Code or the rent shown in
the annual registration statement filed four years prior to
the most recent registration statement (or if more recently
filed, the initial registration statement), plus in each
case, any subsequent lawful increases and adjustments.
(g) Vacancy lease. The first lease or rental agreement for a
housing accommodation that is entered into between an owner
and a tenant.
(h) Renewal lease. Any extension of a tenant's lawful occupancy
of a housing accommodation pursuant to section 2523.5 of
this Title.
(i) Owner. A fee owner, lessor, sublessor assignee, net lessee,
or a proprietary lessee of a housing accommodation in a
structure or premises owned by a cooperative corporation or
association, or an owner of a condominium unit or the
sponsor of such cooperative corporation or association or
condominium development, or any other person or entity
receiving or entitled to receive rent for the use or
occupation of any housing accommodation, or an agent of any
of the foregoing, but such agent shall only commence a
proceeding pursuant to section 2524.5 of this Title, in the
name of such foregoing principals.
(j) Permanent tenant. For housing accommodations located in
hotels, an individual or such individual's family members
residing with such individual, who have continuously resided
in the same building as a principal residence for a period
of at least six months. In addition, a hotel occupant who
requests a lease of six months or more pursuant to section
2522.5(a)(2) of this Title, or who is in occupancy pursuant
to a lease of six months or more shall be a permanent tenant
even if actual occupancy is less than six months. Unless
otherwise specified, reference in this Code to "tenant"
shall include permanent tenant with respect to hotels.
(k) Subtenant or sublessee. Any person lawfully occupying the
housing accommodation pursuant to an agreement with the
tenant by authority of the lease or by virtue of rights
afforded pursuant to section 226-b of the Real Property Law.
Such person shall be entitled to all of the benefits of and
be subject to all of the obligations of this Code except the
right to renew, and the right to purchase upon conversion to
cooperative or condominium ownership.
(l) Occupant. Any person occupying a housing accommodation as
defined in and pursuant to section 235-f of the Real
Property Law. Such person shall not be considered a tenant
for the purposes of this Code.
(m) Hotel occupant. Any person residing in a housing
accommodation in a hotel who is not a permanent tenant. Such
person shall not be considered a tenant for the purposes of
this Code, but shall be entitled to become a permanent
tenant as defined in subdivision (j) of this section, upon
compliance with the procedure set forth in such subdivision.
(n) Immediate family. A husband, wife, son, daughter, stepson,
stepdaughter, father, mother, stepfather, stepmother,
brother, sister, grandfather, grandmother, grandson or
granddaughter of the owner.
(o) Family member.
(1) A husband, wife, son, daughter, stepson, stepdaughter,
father, mother, stepfather, stepmother, brother,
sister, nephew, niece, uncle, aunt, grandfather,
grandmother, grandson, granddaughter, father-in-law,
mother-in-law, son-in-law or daughter-in-law of the
tenant or permanent tenant; or
(2) Any other person residing with the tenant or permanent
tenant in the housing accommodation as a primary or
principal residence, respectively, who can prove
emotional and financial commitment, and interdependence
between such person and the tenant or permanent tenant.
Although no single factor shall be solely
determinative, evidence which is to be considered in
determining whether such emotional and financial
commitment and interdependence existed, may include
without limitation, such factors as listed below. In no
event would evidence of a sexual relationship between
such persons be required or considered.
(i) longevity of the relationship;
(ii) sharing of or relying upon each other for
payment of household or family expenses, and/or
other common necessities of life;
(iii) intermingling of finances as evidenced by,
among other things, joint ownership of bank
accounts, personal and real property, credit
cards, loan obligations, sharing a household
budget for purposes of receiving government
benefits, etc.;
(iv) engaging in family-type activities by jointly
attending family functions, holidays and
celebrations, social and recreational
activities, etc.;
(v) formalizing of legal obligations, intentions,
and responsibilities to each other by such
means as executing wills naming each other as
executor and/or beneficiary, granting each
other a power of attorney and/or conferring
upon each other authority to make health care
decisions each for the other, entering into a
personal relationship contract, making a
domestic partnership declaration, or serving as
a representative payee for purposes of public
benefits, etc.;
(vi) holding themselves out as family members to
other family members, friends, members of the
community or religious institutions, or society
in general, through their words or actions;
(vii) regularly performing family functions, such as
caring for each other or each other's extended
family members, and/or relying upon each other
for daily family services;
(viii) engaging in any other pattern of behavior,
agreement, or other action which evidences the
intention of creating a long-term, emotionally
committed relationship.
(p) Senior citizen. A person who is 62 years of age or older.
(q) Disabled person. Except as provided pursuant to paragraph
(4) of subdivision (b) of section 2523.5 of this Title
(Renewal of Lease), a person who has an impairment which
results from anatomical, physiological or psychological
conditions, other than addiction to alcohol, gambling, or
any controlled sub-stance, which are demonstrable by
medically acceptable clinical and laboratory diagnostic
techniques, and which are expected to be permanent and which
prevent such person from engaging in any substantial gainful
employment.
(r) Required services.
(1) That space and those services which the owner was
maintaining or was required to maintain on the
applicable base dates set forth below, and any
additional space or services provided or required to be
provided thereafter by applicable law. These may
include, but are not limited to, the following:
repairs, decorating and maintenance, the furnishing of
light, heat, hot and cold water, elevator services,
janitorial services and removal of refuse.
(2) For housing accommodations located in hotels in
addition to the definition set forth in paragraph (1)
of this subdivision, required services shall also
include the services set forth in section 2521.3 of
this Title, and any other services provided, or
required to be provided by applicable law on the
applicable base dates set forth below, including but
not limited to telephone switchboard, bellhop,
secretarial, and front desk services.
(3) Ancillary services. That space and those required
services not contained within the individual housing
accommodation which the owner was providing on the
applicable base dates set forth below, and any
additional space and services provided or required to
be provided thereafter by applicable law. These may
include, but are not limited to, garage facilities,
laundry facilities, recreational facilities, and
security. Such ancillary services are subject to the
following provisions:
(i) No owner shall require a tenant or prospective
tenant to lease, rent or pay for an ancillary
service, other than security, as a condition of
renting a housing accommodation.
(ii) Where an ancillary service is provided to a
tenant pursuant to a lease or rental agreement
separate and apart from the lease or rental
agreement for the housing accommodation
occupied by the tenant, the tenant shall not be
required to renew such lease, or rental
agreement, for the ancillary service upon the
expiration of such lease or rental agreement.
(iii) Where an ancillary service is provided to a
tenant pursuant to a lease or rental agreement
for a housing accommodation, whether at a
charge separate and apart from the rental of
the housing accommodation, or included in the
legal regulated rent, the tenant may be
required to renew the rental term for the
ancillary service upon the renewal of the lease
for the housing accommodation. However, where
the owner requires a tenant to continue such
ancillary service, the owner may not
unreasonably withhold consent to the tenant to
sublet for the term of each renewal lease, the
space or other facility constituting the
ancillary service.
(iv) For housing accommodations located in hotels,
where telephone switchboard service is not
provided or required to be provided pursuant to
paragraph (2) of this subdivision, an owner
shall not deny a permanent tenant permission to
install a private telephone, provided that such
installation shall not cause undue economic
hardship to the owner, nor shall an owner cause
the removal of a pay telephone from the
premises.
(4) The base dates for required services shall be:
(i) for housing accommodations subject to the RSL
on June 30, 1974, for building-wide and
individual dwelling unit services: May 31,
1968;
(ii) for housing accommodations subject to the RSL
pursuant to section 421-a of the Real Property
Tax Law, for building wide and individual
dwelling unit services: the date of issuance of
the initial Certificate of Occupancy;
(iii) for housing accommodations subject to the RSL
on June 30, 1971, and exempted thereafter as a
result of a vacancy prior to June 30, 1974, for
building- wide services: May 31, 1968; for
individual dwelling unit services: May 29,
1974;
(iv) for dwelling units which became subject to the
RSL on July 1, 1974, pursuant to section 423 of
the Real Property Tax Law, for building-wide
and individual unit services: May 29, 1974,
except that for housing accommodations in the
Riverton Apartments at East 138th Street,
Manhattan, which became subject to the RSL on
July 1, 1974, pursuant to an initial legal
regulated rent date of June 30, 1973, for
building-wide and individual dwelling unit
services: June 30, 1973;
(v) for housing accommodations which are subject to
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
of the City of New York, as amended, for
building-wide and individual unit services:
January 1, 1976, or the date of the issuance of
a Certificate of Reasonable Cost, whichever is
later;
(vi) for housing accommodations for which rents are
established by governmental agencies pursuant
to the PHFL, or which are first made subject to
this Code pursuant to the PHFL, the building-
wide and individual unit services which were
required for approval in connection with the
establishment of initial rents pursuant to the
PHFL: the effective date of the initial rents;
(vii) 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: the date such regulation
ends;
(viii) for housing accommodations contained in Class B
multiple dwelling units, including single room
occupancy facilities, rooming houses or rooming
units made subject to the ETPA on June 4, 1981,
for building-wide and individual dwelling unit
services: June 4, 1981;
(ix) for housing accommodations which are first made
subject to this Code pursuant to article 7-C of
the MDL, for building-wide and individual
dwelling unit services: the effective date of
the initial rents established by the Loft
Board;
(x) for all other housing accommodations not
subject to the RSL on June 30, 1974, which
become subject to the RSL on or after July 1,
1974 pursuant to the ETPA, for building-wide
and individual dwelling unit services: May 29,
1974.
A service as defined in paragraph (3) of this
subdivision for which there is or was a separate
charge, shall not be subject to the provisions of this
Code where no common ownership between the operator of
such service and the owner exists or existed on the
applicable base date, or at any time subsequent
thereto, and such service is or was provided on the
applicable base date and at all times thereafter by an
independent contractor pursuant to a contract or
agreement with the owner. Where, however, on the
applicable base date or at any time subsequent thereto,
there is or was a separate charge, and there is or was
common ownership, directly or indirectly, between the
operator of such service and the owner, or the service
was provided by the owner, any increase, other than the
charge provided in the initial agreement with a tenant
to lease, rent or pay for such service, shall conform
to the applicable rent guidelines rate. However,
notwithstanding such common ownership, where such
service was not provided primarily for the use of
tenants in the building or building complex on the
applicable base date or at any time subsequent thereto,
such increases shall not be subject to any guidelines
limitations.
(5) Each housing accommodation must be painted at least
once every three years in compliance with title 27 of
the Administrative Code of the City of New York (the
Housing Maintenance Code). In no event shall a tenant
be required to pay a painting deposit or to contribute
to the cost of the painting except to the extent the
owner agrees to provide services in connection with the
painting which are not required, and the tenant
consents in writing to pay therefor. Any painting
deposit previously required shall be returned to the
tenant on renewal of his or her lease.
(s) Documents. Records, books, accounts, correspondence,
memoranda and other documents, and copies, including
microphotographic copies, of any of the foregoing.
(t) Final order. A final order shall be an order of a rent
administrator not appealed to the commissioner within the
period authorized pursuant to section 2529.2 of this Title,
or an order of the commissioner.
Sec. 2520.7. EFFECTIVE DATE.
In accordance with the provisions of the State Administrative
Procedure Act, this Code shall be effective May 1 , 1987, and all
amendments to this Code shall become effective in accordance with
the State Administrative Procedure Act. Where implementation of a
provision would require new or significantly revised filing
procedures or notice requirements, the DHCR may postpone
implementation of such provision, as required, for up to 180 days
after the effective date of this Code, by an advisory opinion
issued pursuant to section 2527.11 of this Title, which shall be
available to the public on such effective date. Where such
postponement is deemed necessary, current filing procedures,
notice requirements, or forms, if any, may be utilized until
revision thereof.
Sec. 2520.8. AMENDMENT OR REVOCATION.
Any provision of this Code may be amended or revoked at any time
in accordance with the procedure set forth in chapter 888 of the
Laws of New York for the year 1985, or as otherwise provided by
the State Administrative Procedure Act.
Sec. 2520.9. FILING OF AMENDMENTS.
Such amendment or revocation shall be filed with the Secretary of
State and shall take effect upon the date of filing unless
otherwise specified therein or as otherwise provided by the State
Administrative Procedure Act.
Sec. 2520.10. SEPARABILITY.
If any provision of this Code or the application of such
provision to any person or circumstance shall be held invalid,
the validity of the remainder of this Code and the applicability
of such provision to other persons or circumstances shall not be
affected thereby.
Sec. 2520.11. APPLICABILITY.
This Code shall apply to all or any class or classes of housing
accommodations made subject to regulation pursuant to the RSL or
any other provision of law, except the following housing
accommodations for so long as they maintain the status indicated
below:
(a) housing accommodations subject to the City Rent Law;
(b) housing accommodations owned, operated or leased by the
United States, the State of New York, any political
subdivision, agency or instrumentality thereof, any
municipality or any public housing authority;
(c) housing accommodations for which rentals are fixed by the
DHCR or HPD, unless, after the establishment of initial
rents, the housing accommodations are made subject to the
RSL pursuant to applicable law, or housing accommodations
subject to the supervision of the DHCR or HPD under other
provisions of law or the New York State Urban Development
Corporation, or buildings aided by government insurance
under any provision of the National Housing Act to the
extent the RSL or any regulation or order issued thereunder
is inconsistent with such act. However, housing
accommodations in buildings completed or substantially
rehabilitated prior to January 1, 1974, and whose rentals
were previously regulated under the PHFL or any other State
or Federal law, other than the RSL or the City Rent Law,
shall become subject to the ETPA, the RSL and this Code,
upon the termination of such regulation. An owner of such
housing accommodations shall not be eligible for a rent
adjustment pursuant to section 2522.4(b) or (c) of this
Title, for a period of three years, where such owner would
not qualify for such rent adjustment in the absence of a
voluntary dissolution, termination, or reconstitution
pursuant to the PHFL or other State or Federal laws;
(d) buildings containing fewer than six housing accommodations
on the date the building first became subject to the RSL,
unless such buildings are otherwise subject to this Code
pursuant to the RSL or other statutes and regulations; for
the purposes of this subdivision, a building shall be deemed
to contain six or more housing accommodations if it was part
of a multiple family garden-type maisonette dwelling complex
containing six or more housing accommodations having common
facilities such as a sewer line, water main or heating plant
and was operated as a unit under common ownership on the
date the building or complex first became subject to the
RSL, notwithstanding that Certificates of Occupancy were
issued for portions thereof as one- or two-family dwellings;
(e) 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 provision of the RSL or any other
statute;
(f) housing accommodations owned, operated, or leased or rented
pursuant to governmental funding, 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, and
occupied by a tenant whose initial occupancy is contingent
upon an affiliation with such institution; however, a
housing accommodation occupied by a nonaffiliated tenant
shall be subject to the RSL and this Code;
(g) rooms or other housing accommodations in hotels where such
housing accommodations (1) are used for transient occupancy;
(2) were rented on May 31, 1968 for more than $350 per month
or $88 per week; or (3) are contained in a hotel which was
constructed after July 1, 1969;
(h) 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;
(i) nonhousekeeping, furnished housing accommodations, located
within a single dwelling unit not used as a rooming or
boarding house, but only if:
(1) no more than two tenants for whom rent is paid (husband
and wife being considered one tenant for this purpose),
who are not members of the owner's immediate family,
live in such dwelling unit; and
(2) the remaining portion of such dwelling unit is occupied
by the owner or his or her immediate family; provided
that this exemption shall not apply where the tenancy
commenced prior to July l, 1971;
(j) housing accommodations in buildings operated exclusively for
charitable purposes on a nonprofit basis;
(k) housing accommodations which are not occupied by the tenant,
not including subtenants or occupants, as his or her primary
residence as determined by a court of competent
jurisdiction;
(l) housing accommodations contained in buildings owned as
cooperatives or condominiums on or before June 30, 1974; or
thereafter, as provided in section 352-eeee of the General
Business Law in accordance with section 2522.5(h) of this
Title;
(m) housing accommodations occupied by domestic servants,
superintendents, caretakers, managers or other employees to
whom the space is provided as part or all of their
compensation without payment of rent and who are employed
for the purpose of rendering services in connection with the
premises of which the housing accommodation is a part;
(n) housing accommodations used exclusively for professional,
commercial, or other nonresidential purposes;
(o) 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 which were originally
made subject to regulation solely as a condition of
receiving tax benefits pursuant to section 11-243 (formerly
J51-2.5) or section 11-244 (formerly J51-5.0) of the
Administrative Code of the City of New York, as amended, or
article XVIII of the PHFL; and thereafter receipt of such
tax benefits has concluded pursuant to these sections or
article XVIII, and:
(1) for housing accommodations which were subject to the
RSL pursuant to section 11-243(formerly J51-2.5) or
section 11-244 (formerly J51-5.0) or PHFL article XVIII
became vacant; or
(2) for housing accommodations which received benefits
pursuant to section 11-243 (formerly J51-2.5) or
section 11-244 (formerly J51-5.0) or article XVIII of
the PHFL, each lease and each renewal thereof of the
tenant in residence at the time of the expiration of
the tax benefit period includes a notice, in at least
12-point type informing such tenant that the housing
accommodation shall become deregulated upon the
expiration of the last lease or rental agreement
entered into during the tax benefit period, and states
the approximate date on which such tax benefit period
is scheduled to expire;
(p) 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 which were originally
made subject to regulation solely as a condition of
receiving tax benefits pursuant to section 421-a of the Real
Property Tax Law, as amended, and:
(1) the housing accommodations which were subject to the
RSL pursuant to section 421-a became vacant; or
(2) for housing accommodations which first became subject
to the rent stabilization requirements of section 42 I-
a after July 3, 1984, where each lease and each renewal
thereof of the tenant in occupancy at the time the
period of tax exemption pursuant to section 421-a
expires, contains a notice in at least 12-point type
informing such tenant that the housing accommodation
shall become deregulated upon the expiration of the
last lease or rental agreement entered into during the
tax benefit period and states the approximate date on
which such tax benefit period is scheduled to expire;
(q) housing accommodations which would otherwise be subject to
rent regulation solely by reason of the provisions of
article 7-C of the MDL requiring rent regulation, but which
are exempted from such provisions pursuant to section 286(6)
and 286(12) of the MDL;
(r) housing accommodations exempted pursuant to any other
provision of law.
Sec. 2520.12. EFFECT OF THIS CODE ON LEASES AND OTHER
RENTAL AGREEMENTS.
The provisions of any lease or other rental agreement shall
remain in force pursuant to the terms thereof, except insofar as
those provisions are inconsistent with the ETPA, the RSL or this
Code, and in such event such provisions shall be void and
unenforceable. For housing accommodations made subject to the RSL
and this Code pursuant to section 2520.11 (c) of this Part, where
such leases or rental agreements are so inconsistent as to render
them ineffective in defining the rights and duties of tenants and
owners, the DHCR may order the provision of new leases consistent
with the ETPA, the RSL and this Code. No renewal lease or vacancy
lease offered to a tenant shall contain any right of cancellation
or eviction by the owner during the term thereof except as
provided for by the ETPA, the RSL or this Code
Sec. 2520.13. WAIVER OF BENEFIT VOID.
An agreement by the tenant to waive the benefit of any provision
of the RSL or this Code is void; provided, however, that based
upon a negotiated settlement between the parties and with the
approval of the DHCR, or a court of competent jurisdiction where
a tenant is represented by counsel, a tenant may withdraw, with
prejudice, any complaint pending before the DHCR. Such settlement
shall not be binding upon any subsequent tenant, except to the
extent that the complaint being settled is subject to the time
limitations set forth in the RSL and this Code.
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PART 2521 -- LEGAL REGISTERED AND REGULATED RENTS
-----------------------------
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.
-----------------------------
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.
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PART 2522 -- RENT ADJUSTMENTS
-----------------------------
TABLE OF CONTENTS
Section 2522.1. Legal regulated rent adjustments.
2522.2. Effective date of adjustment of legal
regulated rents.
2522.3. Fair Market Rent Appeal.
2522.4. Adjustment of legal regulated rent.
2522.5. Lease agreements.
2522.6. Orders where the legal regulated rent or
other facts are in dispute, in doubt, or not
known, or where the legal regulated rent must
be fixed.
2522.7. Consideration of equities.
-----------------------------
Sec. 2522.1. LEGAL REGULATED RENT ADJUSTMENTS.
Legal regulated rents may be increased or decreased only as
hereinafter specified.
Sec. 2522.2. EFFECTIVE DATE OF ADJUSTMENT OF LEGAL REGULATED
RENTS.
The legal regulated rent shall be adjusted effective the first
rent payment date occurring 30 days after the filing of the
application, unless otherwise set forth in the order, or as set
forth in a Notice of Eligibility pursuant to section
2522.4(a)(3)(ii) of this Part, or on the effective date of a
lease or other rental agreement providing for the Rent Guidelines
Board annual rate of adjustments. No rent adjustment may take
place during a lease term unless a clause in the lease authorizes
such increase.
Sec. 2522.3. FAIR MARKET RENT APPEAL.
(a) Except as provided in section 2521.1(a)(2) of this Title, an
appeal of the initial legal registered rent on the ground
that it exceeds the fair market rent for the housing
accommodation may be filed with the DHCR by the tenant of a
housing accommodation which was subject to the City Rent Law
on December 31, 1973. If the housing accommodation was
registered in accordance with Part 2528 of this Title, this
right is limited to the first tenant taking occupancy on or
after April 1, 1984, except where such tenant had vacated
the housing accommodation prior to the service by the owner
of the Notice of initial Legal Registered Rent as required
by section 2523.1 of this Title. In such event, any
subsequent tenant in occupancy shall also have a right to
file a Fair Market Rent Appeal until the owner mails the
required notice and 90 days shall have elapsed without the
filing of an appeal by a tenant continuing in occupancy
during said 90-day period. Once a Fair Market Rent Appeal is
filed, no subsequent tenant may file such appeal.
Notwithstanding the above, where the first tenant taking
occupancy after December 31, 1973, of a housing
accommodation previously subject to the City Rent Law, was
served with the notice required by section 26 of the former
code of the Rent Stabilization Association of New York City,
Inc., the time within which such tenant may file a Fair
Market Rent Appeal is limited to 90 days after such notice
was mailed to the tenant by the owner by certified mail.
(b) The tenant need only allege in such appeal:
(1) that the initial legal registered rent is in excess of
the fair market rent; and
(2) such facts which, to the best of his or her information
and belief, support such allegation.
(c) Such appeal shall be dismissed where:
(1) the housing accommodation was subject to the City Rent
Law prior to July 1, 1971, and the initial legal
registered rent does not exceed the maximum rent as
calculated pursuant to the City Rent Law for the period
commencing January 1, 1974 and ending December 31,
1975, whether or not the housing accommodation was
subject to the City Rent Law on that date, plus the
appropriate guidelines allowance permissible for
renewal leases pursuant to Guidelines Board Order No. 6
issued June 28, 1974 and effective July 1, 1974, and
Order No. 6C issued February 7, 1975 and effective July
1, 1974, for any lease or other rental agreement
commencing on or after January 1, 1974; or
(2) the appeal is filed more than 90 days after the
certified mailing to the tenant of the initial
apartment registration, together with the notice
pursuant to section 2523.1 of this Title.
(d) The order shall direct the affected owner to make the refund
of any excess rent to the tenant in cash, check or money
order, and to the extent the present owner is liable for all
or any part of the refund, such present owner may credit
such refund against future rents over a period not in excess
of six months. If the refund exceeds the total rent due for
six months, the tenant at his or her option may continue to
abate his or her rent until the refund is fully credited, or
request the present owner to refund any balance outstanding
at the end of such six-month period.
(e) In determining Fair Market Rent Appeals, consideration shall
be given to the applicable guidelines promulgated for such
purposes by the Rent Guidelines Board and to rents generally
prevailing for substantially similar housing accommodations
in buildings located in the same area as the housing
accommodation involved. The rents for these comparable
housing accommodations may be considered where such rents
are:
(1) legal regulated rents, for which the time to file a
Fair Market Rent Appeal has expired and no Fair Market
Rent Appeal is then pending, or the Fair Market Rent
Appeal has been finally determined, charged pursuant to
a lease commencing within a four-year period prior to,
or a one-year period subsequent to, the commencement
date of the initial lease for the housing accommodation
involved; and
(2) at the owner's option, market rents in effect for other
comparable housing accommodations on the date of the
initial lease for the housing accommodation involved as
submitted by the owner.
(f) Where the rents of the comparable housing accommodations
being considered are legal regulated rents, for which the
time to file a Fair Market Rent Appeal has expired, and such
rents are charged pursuant to a lease ending more than one
year prior to the commencement date of the initial lease for
the subject housing accommodation, such rents shall be
updated by guidelines increases for one-year renewal leases,
commencing with the expiration of the initial lease for the
comparable housing accommodation to a date within 12 months
prior to the renting of the housing accommodation involved
Sec. 2522.4. ADJUSTMENT OF LEGAL REGULATED RENT.
(a) INCREASED SPACE AND SERVICES, NEW EQUIPMENT, NEW FURNITURE
OR FURNISHINGS; MAJOR CAPITAL IMPROVEMENTS; OTHER
ADJUSTMENTS.
(1) An owner is entitled to a rent increase where there has
been a substantial increase, other than an increase for
which an adjustment may be claimed pursuant to
paragraph (2) of this subdivision, of dwelling space or
an increase in the services, or installation of new
equipment or improvements, or new furniture or
furnishings, provided in or to the tenant's housing
accommodation, on written tenant consent to the rent
increase. In the case of vacant housing accommodations,
tenant consent shall not be required.
(2) An owner may file an application to increase the legal
regulated rents of the building or building complex on
forms prescribed by the DHCR, which the DHCR shall
serve upon all affected tenants, on one or more of the
following grounds:
(i) There has been a major capital improvement,
including an installation, which must meet all
of the following criteria:
(a) deemed depreciable under the Internal Revenue
Code, other than for ordinary repairs;
(b) is for the operation, preservation and
maintenance of the structure;
(c) is an improvement to the building or to the
building complex which inures directly or
indirectly to the benefit of all tenants, and
which includes the same work performed in all
similar components of the building or
building complex, unless the owner can
satisfactorily demonstrate to the DHCR that
certain of such similar components did not
require improvement; and
(d) the item being replaced meets the
requirements set forth in the useful life
schedule, except with DHCR approval of a
waiver. Pursuant to section 2527.11 of this
Title, the DHCR shall issue a useful life
schedule in accordance with manufacturing
industry standards, which shall also set
forth the conditions under which a useful
life requirement may be waived.
(ii) There has been other necessary work performed in
connection with, and directly related to a major
capital improvement, which may be included in
the computation of an increase in the legal
regulated rent only if such other necessary work
was completed within a reasonable time after the
completion of the major capital improvement to
which it relates. Such other necessary work
must:
(a) improve, restore or preserve the quality of
the structure; and
(b) have been completed subsequent to, or
contemporaneously with, the completion of the
work for the major capital improvement.
(iii) With approval by the DHCR, there has been an
increase in services or improvement, other than
repairs, on a building-wide basis, which the
owner can demonstrate are necessary in order to
comply with a specific requirement of law.
(iv) With approval by the DHCR, there have been other
improvements made or services provided to the
building or building complex, other than those
specified in subparagraphs (i)-(iii) of this
paragraph, with the express consent of the
tenants in occupancy of at least 75 percent of
the housing accommodations.
(3) An owner who files a complete application with the DHCR
for an increase authorized pursuant to subparagraph
(2)(i) of this subdivision which meets the requirements
of such subparagraph may begin to collect such increase
in the legal regulated rent prior to the issuance of an
order granting the increase, provided that:
(i) to be complete, such application must:
(a) contain an itemized list of the work
performed;
(b) contain a certification of the cost of such
work from the contractors, architect,
certified public accountant, engineer or
governmental agency; and that the item meets
the requirements set forth in the useful life
schedule, or a copy of a DHCR approval of a
waiver of such useful life requirement is
attached;
(c) contain proof of payment for such work the
cost of which is certified pursuant to clause
(b) of this subparagraph;
(d) contain the owner's sworn affidavit as to the
completion of the installation or improvement
in accordance with the itemization list and
the certified costs, that all applicable
governmental codes and regulations have been
complied with, the installation or
improvement has been properly performed in a
workmanlike manner, and the truthfulness of
all information submitted with the
application;
(e) contain copies of all necessary governmental
agency approvals or self-certification by a
duly licensed architect or engineer as may be
permitted by such governmental agency; and
(f) be for an improvement or installation of an
item which is included on the following
schedule, or such other improvement or
installation to the building or building
complex for the operation, preservation and
maintenance of the structure as may be deemed
necessary by the DHCR for the continued
viability of the building as specified in an
operational bulletin issued pursuant to
section 2527.11 of this Title.
-----------------------------
SCHEDULE OF MAJOR CAPITAL IMPROVEMENTS
1. Air conditioner--new central system; or individual units set
in sleeves in the exterior wall of every housing
accommodation; or, air conditioning circuits and outlets in
each living room and/or bedroom (see Rewiring).
2. Aluminum siding--installed in a uniform manner on all
exposed sides of the building (see Resurfacing).
3. Bathroom modernization--complete renovation, including new
sinks, toilets, bathtubs and/or showers and all required
trims in every housing accommodation.
4. Boiler and/or burner--new unit(s) including electrical work
and additional components needed for the installation.
5. Boiler room--new room where none existed before; or
enlargement of existing one to accommodate new boiler.
6. Catwalk--complete replacement.
7. Chimney--complete replacement, or new one where none existed
before, including additional components needed for the
installation.
8. Courtyard and walkways--concrete resurfacing of entire
original area within the property lines of the premises.
9. Doors--new lobby front entrance and/or vestibule doors; or
entrance to every housing accommodation, or fireproof doors
for public hallways, basement, boiler room and roof
bulkhead.
10. Elevator upgrading--including new controllers and selectors;
or new electronic dispatch overlay system; or new elevator
where none existed before, including additional components
needed for the installation.
11. Fire escapes--complete new replacement, including new
landings.
12. Gas heating units--new individual units with connecting
pipes to every housing accommodation.
13. Hot water heater--new unit for central heating system.
14. Incinerator upgrading--including a new scrubber.
15. Intercom system--new replacement; or one where one existed
before, with automatic door locks and push-button speaker
boxes and/or telephone communication, including security
locks on all entrances to the building.
16. Kitchen modernization--complete renovation, in eluding new
sinks, counter tops and cabinets in every housing
accommodation.
17. Mailboxes--new replacements and relocated from outer
vestibule to an area behind locked doors to increase
security.
18. Painting and waterproofing--as necessary on exposed sides of
the building.
19. Parapet--complete replacement.
20. Repiping--new hot and/or cold water risers, returns, and
branches to fixtures in every housing accommodation,
including shower bodies, and/or new hot and/or new cold
water overhead mains, with all necessary valves in basement.
21. Resurfacing of exterior walls--consisting of brick or
masonry facing on entire area of all exposed sides of the
building.
22. Rewiring--new copper risers and feeders extending from
property box in basement to every housing accommodation;
must be of sufficient capacity (220 volts) to accommodate
the installation of air conditioner circuits in living room
and/or bedroom.
23. Roof--complete replacement or roof cap on existing roof
installed after thorough scraping and leveling as necessary.
24. Solar heating system--new central system, including
additional components needed for the system.
25. Structural steel--complete new replacement of all beams
including footing and foundation.
26. Television system--new security monitoring system, including
additional components needed for the system.
27. Waste compactor--new installation(s) serving entire
building.
28. Waste compactor room--new room where none existed before.
29. Water tank--new installation(s) serving entire building.
30. Windows--new aluminum framed windows. Wood framed windows
allowed only for landmark buildings.
-----------------------------
(ii) The owner or his or her representative has
personally filed the completed application with
the DHCR, the DHCR has served such application
upon all affected tenants, the owner has
thereafter received a Notice of Eligibility from
the DHCR stating that the application is
complete, and the DHCR has served such Notice of
Eligibility upon such tenants. For the purposes
of an application filed pursuant to this
paragraph, the DHCR shall, within 90 days of
such filing, fully review such application to
insure completion pursuant to subparagraph (i)
of this paragraph and shall conduct inspections
where appropriate, and thereafter shall provide
an owner with a Notice of Eligibility stating
that the application is complete, and the
effective date of the notice for the purposes of
collecting the increase, or a notice of
deficiency determining that the application is
incomplete, and setting forth the grounds for
such determination. A Notice of Eligibility
shall be subject to a tenant challenge and
subsequent audit by the DHCR. A tenant may file
a challenge to the owner's eligibility to
collect the rent increase within 60 days after
the DHCR has served the tenant with a copy of
the Notice of Eligibility by setting forth the
grounds of his or her challenge in an answer
filed with the DHCR.
(iii) An owner, who on the effective date of this
Code, has an application pending before the DHCR
for an increase pursuant to subparagraph (2)(i)
of this subdivision, may begin to collect such
increase upon compliance with the procedure set
forth in subparagraphs (i) and (ii) of this
paragraph, provided that the retroactive
collectibility of the increase shall be no
earlier than the first rent payment date one
year prior to the filing of an application
completed pursuant to such subparagraphs (i) and
(ii), and shall not be collected until the DHCR
has issued an order granting the increase.
(iv) An owner who is found by the DHCR to have
knowingly filed a false affidavit pursuant to
clause (i)(d) of this paragraph shall not be
entitled to file any future application under
this paragraph, and shall be denied the increase
for which the owner submitted the application.
Any increased rent shall be returned to the
tenant and, in addition to any penalty contained
in any other provision of law, the DHCR may also
impose treble damages for the rent increase
collected pursuant to the Notice of Eligibility
described in subparagraph (ii) of this
paragraph.
(4) The increase in the monthly stabilization rent for the
affected housing accommodations when authorized
pursuant to paragraph (1) of the subdivision shall be
l/40th of the total cost, including installation but
excluding finance charges; and any increase pursuant to
paragraphs (2) and (3) shall be 1/60th of the total
cost, including installation but excluding finance
charges as allocated in accordance with paragraph (12)
of this subdivision. For increases pursuant to
subparagraphs (2)(iii) and (iv) of this subdivision, in
the discretion of the DHCR, an appropriate charge may
be imposed in lieu of an amortization charge when an
amortization charge is insignificant or inappropriate.
(5) Such increases shall not be collectible during the term
of a lease then in effect, unless a specific provision
in the tenant's lease authorizes an increase during its
term pursuant to an order issued by the DHCR, except
that increases pursuant to paragraph (1) of this
subdivision may be collected upon installation.
(6) The determination of the appropriate adjustment of a
legal regulated rent shall take into consideration all
factors bearing on the equities involved, subject to
the general limitation that the adjustment can be put
into effect without dislocation and hardship
inconsistent with the purposes of the RSL, and
including as a factor a return of the actual cost to
the owner, exclusive of interest or other carrying
charges, and the increase in the rental value of the
housing accommodations.
(7) Except for applications made pursuant to paragraph (3)
of this subdivision, an owner may apply for the DHCR's
advisory prior opinion pursuant to section 2527.11 of
this Title, as to whether the proposed work qualifies
for an increase in the legal regulated rent.
(8) No increase pursuant to paragraphs (2) and (3) of this
subdivision shall be granted by the DHCR, unless an
application is filed no later than two years after the
completion of the installation or improvement unless
the applicant can demonstrate that the application
could not be made within two years due to delay, beyond
the applicant's control, in obtaining required
governmental approvals for which the applicant has
applied within such two-year period. No increase
pursuant to paragraphs (2) and (3) of this subdivision
shall be granted within the useful life of an
improvement or installation for which an increase was
previously granted except with prior DHCR approval for
required improvements. In addition, an increase
pursuant to paragraphs (2) and (3) shall not be
collectible from a tenant to whom there has been issued
a currently valid senior citizen rent increase
exemption pursuant to section 26-509 of the
Administrative Code of the City of New York, to the
extent such increase causes the legal regulated rent of
the housing accommodation to exceed one third of the
aggregate disposable income of all members of the
household residing in the housing accommodation. The
collection of any increase in the legal regulated rent
for any housing accommodation pursuant to paragraphs
(2) and (3) shall not exceed six percent in any year
from the effective date of the Notice of Eligibility or
of the order granting the increase over the rent set
forth in the schedule of gross rents with
collectibility of any dollar excess above said sum to
be spread forward in similar increments and added to
the legal regulated rent as established or set in
future years. In no event shall more than one six-
percent increase in the legal regulated rent pursuant
to paragraphs (2) and (3) be collected in the same year
for the permanent, prospective rent increase, and no
more than an additional six-percent increase for the
temporary retroactive portion of such rent increase.
(9) An increase for an improvement made pursuant to
paragraphs (2) and (3) of this subdivision shall not be
granted by the DHCR to the extent that, after a plan
for the conversion of a building to cooperative or
condominium ownership is declared effective, such
improvement is paid for out of the cash reserve fund of
the cooperative corporation or condominium association.
Nothing in this paragraph shall prevent an owner from
applying for, and the DHCR from granting, an increase
for such improvement to the extent that the cost
thereof is otherwise paid for by an owner.
(10) The DHCR shall not grant an application pursuant to
this subdivision for an increase for any improvement
made pursuant to paragraphs (2) and (3) of this
subdivision to the extent that the cost of such
improvement is paid for by an owner with funds received
pursuant to a grant from any governmental agency or
entity. A low interest loan or subsidy shall not be
considered a grant for the purposes of this paragraph.
Nothing in this paragraph shall prevent an owner from
applying for, and the DHCR from granting, an increase
for such improvement to the extent that the cost
thereof is otherwise paid for by an owner.
(11) An owner who is entitled to a rent increase based upon
the installation of new equipment, or new furniture or
furnishings pursuant to paragraph (1) of this
subdivision shall not be entitled to a further rent
increase based upon the installation of similar
equipment, or new furniture or furnishings within the
useful life of such new equipment, or new furniture or
furnishings.
(12) Rent adjustments pursuant to paragraphs (2) and (3) of
this subdivision and subdivisions (b) and (c) of this
section shall be allocated as follows: The DHCR shall
determine the dollar amount of the monthly rent
adjustment. Such dollar amount shall be divided by the
total number of rooms in the building. The amount so
derived shall then be added to the rent chargeable to
each housing accommodation in accordance with the
number of rooms contained in such housing
accommodation.
(13) The DHCR shall not grant an owner's application for a
rental adjustment pursuant to this subdivision, in
whole or in part, if it is determined by the DHCR prior
to the granting of approval to collect such adjustment
that the owner is not maintaining all required
services, or that there are current immediately
hazardous violations of any municipal, county, State or
Federal law which relate to the maintenance of such
services. However, as determined by the DHCR, such
application may be granted upon condition that such
services will be restored within a reasonable time, and
certain tenant-caused violations may be excepted.
(14) In the case of an improvement constituting a moderate
rehabilitation as defined in subdivision 2.1(6) of the
Rules and Regulations Governing Tax Exemption and Tax
Abatement pursuant to title 11 of the Administrative
Code of the City of New York, an owner may elect that
the total cost for such improvement be deemed to be the
amount certified by the Tax Abatement/Tax Exemption
Unit of HPD in the certificate of eligibility issued by
such office with respect to such improvement. Such
election shall be binding on the DHCR and shall waive
any claim for a rent increase by reason of any
difference between the total cash paid by the owner and
such lesser certified amount.
(b) COMPARATIVE HARDSHIP.
(1) An owner may file an application on forms prescribed by
the DHCR, and the DHCR shall grant, on the application
of an owner, appropriate rent adjustments as
hereinafter provided, where the gross rental income is
insufficient to yield to the owner an average annual
net income (which shall be computed without regard to
debt service, financing costs or management fees), for
the three-year period ending on or within six months of
the date of the filing of the owner's application,
equal to the annual average net income of the property
for:
(i) the period 1968-1970; or
(ii) the first three years of operation, if the
building was completed after 1 968; or
(iii) the first three fiscal years after a transfer of
title to a new owner who acquired title to the
building as a result of a bona fide sale of the
entire building, and who has been unable to
obtain requisite records for the fiscal years
between 1968 through 1970, despite diligent
efforts to obtain the same from predecessors in
title, provided that such new owner submits
financial data for not less than six years of
continuous and uninterrupted operation of the
property under his or her ownership.
(2) Notwithstanding anything to the contrary herein, no
increase granted pursuant to this subdivision shall,
when added to the annual gross rents as determined by
the DHCR, exceed the sum of:
(i) the annual operating expenses;
(ii) an allowance for management services as
determined by the DHCR;
(iii) actual annual mortgage debt service (interest
and amortization) on its indebtedness to a
lending institution, an insurance company, a
retirement fund or welfare fund under the
supervision of the banking or insurance laws of
the State of New York or the United States; and
(iv) 8 1/2 percent of that portion of the fair
market value of the property which exceeds the
unpaid principal amount of the mortgage
indebtedness referred to in subparagraph (iii)
of this paragraph. Fair market value for this
subparagraph shall be six times the annual gross
rent.
(3) Restrictions.
(i) The collection of any increase in the legal
regulated rent for any housing accommodation
pursuant to this subdivision shall not exceed
six percent in any year from the effective date
of the order granting the increase over the rent
set forth in the schedule of gross rents, with
collectibility of any dollar excess above said
sum to be spread forward in similar increments
and added to the legal regulated rent as
established or set in future years.
(ii) If the building was previously granted a
hardship increase, such increase must have
become effective more than 36 months prior to
the filing date of the application .
(iii) The owner has resolved all legal objections to
any real estate taxes and water and sewer
charges for the test period. However, if there
is a pending certiorari proceeding relating to
the real estate tax expense for the test period,
an owner may be permitted to file a hardship
application. In such cases, the amount of real
estate tax expense that will be recognized for
purposes of the test period will be based upon
the amount of proposed assessed value set forth
by the owner in the certiorari petition;
provided, however, that the owner submits proof
of actual payment of all taxes due on the
owner's proposed assessed value, in accordance
with applicable law. If after such tax objection
is resolved, the owner's actual and reasonable
tax expense allocable to the test period exceeds
the amount the DHCR used in determining the
hardship application, an additional increase may
be granted prospectively by the DHCR in its
discretion. The DHCR may also, in its
discretion, accept reasonable alternatives as to
unresolved water and sewer charges.
(iv) The DHCR shall not grant an owner an increase as
provided, in whole or in part, if it is
determined prior to the granting of approval to
collect an increase pursuant to this subdivision
that the owner is not maintaining all required
services or there are current immediately
hazardous violations of any municipal, county,
State or Federal law which relate to the
maintenance of such services. However, as
determined by the DHCR, where the DHCR
determines that insufficient income is the cause
of such failure to maintain required services,
hardship increases may be granted upon condition
that such services will be restored within a
reasonable time, and certain tenant-caused
violations may be excepted.
(v) In buildings that also contain housing
accommodations subject to the City Rent Law,
appropriate adjustments for both income and
expenses will be made by the DHCR in order to
calculate the pro rat a share for those housing
accommodations subject to this application.
(vi) The DHCR shall set a rental value for any
housing accommodation occupied by the owner or
managing agent, a person related to, or an
employee of the owner or managing agent, or
unoccupied at the owner's choice for more than
one month at the last legal regulated rent plus
the minimum number of guidelines increases. If
no such legal regulated rent existed or is
known, the DHCR shall impute a rent equal to the
average of rents for similar or comparable
housing accommodations subject to this Code in
the building during the test period.
(vii) Each owner who files an application for a
hardship rent increase shall be required to
maintain all records as submitted with the
subject application, and further be required to
retain same for a period of three years after
the effective date of the order.
(viii)Each application under this subdivision shall be
certified by the owner or his or her duly
authorized agent as to its accuracy and
compliance with this subdivision under the
penalties of perjury.
(ix) The maximum amount of hardship increase to which
an owner shall be entitled shall be the
difference between the average annual net income
for the three-year base period and the average
annual net income for the three-year current
period.
(4) Right of tenant to cancel lease where rent increase
based upon hardship is granted. In the event that an
order is issued increasing the legal regulated rent
because of owner hardship, the tenant may within 30
days of his or her receipt of a copy of the DHCR order,
cancel his or her lease on 60 days' written notice to
the owner. Until such tenant vacates, he or she
continues in occupancy at the approved increase in
rent.
(c) ALTERNATIVE HARDSHIP.
As an alternative to the hardship application provided under
subdivision (b) of this section, owners of buildings, not owned
as cooperatives or condominiums, acquired by the same owner or a
related entity owned by the same principals three years prior to
the date of application, may apply to the DHCR, on forms
prescribed by the DHCR, for increases in excess of the level of
applicable guidelines increases established under the RSL, based
on a finding by the DHCR that such guidelines increases are not
sufficient to enable the owner to maintain an annual gross rent
income collectible for such building which exceeds the annual
operating expenses of such building by a sum equal to at least
five percent of such annual gross rent income collectible,
subject to the definitions and restrictions provided for herein.
(1) DEFINITIONS. The following terms shall mean:
(i) Annual gross rental income collectible shall
consist of the actual income receivable per
annum arising out of the operation and ownership
of the property, including but not limited to
rental from housing accommodations, stores,
professional or business use, garages, parking
spaces, and income from easements or air rights,
washing machines, vending machines and signs,
plus the rent calculated under subparagraph
(2)(vi) of this subdivision.
In ascertaining income receivable, the DHCR
shall determine what efforts, if any, the owner
has followed in collecting unpaid rent.
(ii) Operating expenses shall consist of the actual,
reasonable costs of fuel, labor, utilities,
taxes (other than income or corporate franchise
taxes), fees (not including attorney's fees
related to refinancing of the mortgage),
permits, necessary contracted services and non
capital repairs for which an owner is not
eligible for an increase pursuant to this Part,
insurance, parts and supplies, reasonable
management fees, mortgage interest, and other
reasonable and necessary administrative costs
applicable to the operation and maintenance of
the property.
(iii) Mortgage interest shall be deemed to mean
interest on that portion of the principal of an
institutional or a bona fide mortgage, including
an allocable portion of the charges related to
the refinancing of the balance of an existing
mortgage or a purchase-money mortgage. Criteria
to be considered in determining a bona fide
mortgage other than an institutional mortgage
shall include, but shall not be limited to, the
following: the condition of the property, the
location of the property, the existing mortgage
market at the time the mortgage is placed, the
principal amount of the mortgage, the term of
the mortgage, the amortization rate, security
and other terms and conditions of the mortgage.
(iv) Institutional mortgage shall include a mortgage
given to any insurance company, licensed by the
State of New York or authorized to do business
in the State of New York, or any commercial
bank, trust company, savings bank or savings and
loan association (which must be licensed under
the laws of any jurisdiction within the United
States and authorized to do business in the
State of New York). The DHCR may determine in
its discretion that any other mortgage issued by
a duly licensed lending institution is an
institutional mortgage.
(v) Owner's equity shall mean the sum of:
(a) the purchase price of the property less the
principal of any mortgage or loan used to
finance the purchase of the property;
(b) the cost of any capital improvement for which
the owner has not collected an increase in
rent less the principal of any mortgage or
loan used to finance said improvement;
(c) any repayment of the principal of any
mortgage or loan used to finance the purchase
of the property or any capital improvement
for which the owner has not collected an
increase in rent; and
(d) any increase in the equalized assessed value
of the property which occurred subsequent to
the first valuation of the property after
purchase by the owner.
(vi) Threshold income shall mean that annual gross
rental income collectible for such building
which exceeds the annual operating expense for
such building by a sum equal to five percent of
such annual gross rental income collectible.
(vii) Test year shall mean any one of the following:
(a) the most recent calendar year (January 1st to
December 31st); or
(b) the most recent fiscal year (one year ending
on the last day of a month other than
December 31st, provided that books of account
are maintained and closed accordingly; or
(c) any 12 consecutive months ending within 90
days prior to the date of filing of the
hardship application. Such period must end on
the last day of a month. Nothing herein shall
prevent the DHCR from comparing and adjusting
expenses and income during the test year with
expenses and income occurring during the
three years prior to the date of application
in order to determine the reasonableness of
such expenses and income.
(2) RESTRICTIONS. No owner may file an application, nor may
an owner be granted an increase in excess of the level
of applicable guidelines increases, unless:
(i) the collection of any increase in the legal
regulated rent for any housing accommodation
pursuant to this subdivision shall not exceed
six percent in any year from the effective date
of the order granting the increase over the rent
set forth in the schedule of gross rents, with
collectibility of any dollar excess above said
sum to be spread forward in similar increments
and added to the legal regulated rent as
established or set in future years;
(ii) if the building was previously granted a
hardship increase, such increase must have
become effective more than 36 months prior to
the filing date of the application;
(iii) the owner has resolved all regal objections to
any real estate taxes and water and sewer
charges for the test year. However, if there is
a pending certiorari proceeding relating to the
real estate tax expense for the test year, an
owner may be permitted to file a hardship
application. In such cases, the amount of real
estate tax expense that will be recognized for
purposes of the test year will be based upon the
amount of proposed assessed value set forth by
the owner in the certiorari petition; provided,
however, that the owner submits proof of actual
payment of all taxes due on the proposed
assessed value, in accordance with applicable
law. If after such tax objection is resolved,
the owner's actual and reasonable tax expense
allocable to the test year exceeds the amount
the DHCR used in determining the hardship
application, an additional increase may be
granted prospectively by the DHCR in its
discretion. The DHCR may also, in its
discretion, accept reasonable alternatives as to
unresolved water and sewer charges;
(iv) the DHCR shall not grant an owner an increase as
provided, in whole or in part, if it is
determined prior to the granting of approval to
collect an increase pursuant to this subdivision
that the owner is not maintaining all required
services or there are current immediately
hazardous violations of any municipal, county,
State or Federal law which relate to the
maintenance of such services. However, as
determined by the DHCR, where the DHCR
determines that insufficient income is the cause
of such failure to maintain required services,
hardship increases may be granted upon condition
that such services will be restored within a
reasonable time, and certain tenant-caused
violations may be excepted;
(v) in buildings that also contain housing
accommodations subject to the City Rent Law,
appropriate adjustments for both income and
expenses will be made by the DHCR in order to
calculate the pro rata share for those housing
accommodations subject to this application;
(vi) the DHCR shall set a rental value for any
housing accommodation occupied by the owner or
managing agent, or a person related to, or an
employee of the owner or managing agent, or
unoccupied at the owner's choice for more than
one month at the last regulated rent plus the
minimum number of guidelines increases or, if no
such regulated rent existed or is known, the
DHCR shall impute a rent equal to the average of
rents for similar or comparable housing
accommodations subject to this Code in the
building during the test year;
(vii) each owner who files an application for a
hardship rent increase shall be required to
maintain all records as submitted with the
subject application, and further be required to
retain same for a period of three years after
the effective date of the order;
(viii)each application under this subdivision shall be
certified by the owner or his or her duly
authorized agent as to its accuracy and
compliance with this subdivision, under the
penalty of perjury;
(ix) the annual gross rent income collectible for the
test year does not exceed the annual operating
expenses of such building by a sum equal to at
least five percent of such annual gross rental
income collectible;
(x) the owner or a related entity owned by the same
principals acquired the building at least 36
months prior to the date of application. A
cooperative corporation or the board of managers
of a condominium association shall not be
considered the owner of the building, nor are
individual shareholders or unit owners building
owners for the purpose of eligibility for the
alternative hardship, and as such are not
permitted to file alternative hardship
applications:
(xi) the owner's equity in the building exceeds five
percent of the sum of:
(a) the arm's-length purchase price of the
property;
(b) the cost of any capital improvements for
which the owner has not collected an increase
in rent pursuant to paragraph (a)(2) of this
section;
(c) any repayment of principal of any mortgage or
loan used to finance the purchase of the
property or any capital improvements for
which the owner has not obtained an
adjustment in rent pursuant to paragraph
(a)(2) of this section; and
(d) any increase in the equalized assessed value
of the property which occurred subsequent to
the first valuation of the property after
purchase by the owner; and
(xii) the maximum amount of hardship increase to which
an owner shall be entitled shall be the
difference between the threshold income and the
annual gross rent income collectible for the
test year.
(3) RIGHT OF TENANT TO CANCEL LEASE WHERE RENT INCREASE
BASED UPON HARDSHIP IS GRANTED. In the event that an
order is issued increasing the legal regulated rent
because of owner hardship, the tenant may within 30
days of his or her receipt of a copy of the DHCR order,
cancel his or her lease on 60 days' written notice to
the owner. Until such tenant vacates, he or she
continues in occupancy at the approved increase in
rent.
(d) An owner may file an application to decrease required
services for a reduction of the legal regulated rent on
forms prescribed by the DHCR on the grounds that:
(1) the owner and tenant, by mutual voluntary written
agreement, consent to a decrease in dwelling space, or
a decrease in the services, furniture, furnishings or
equipment provided in the housing accommodation; or
(2) such decrease is required for the operation of the
building in accordance with the specific requirements
of law; or
(3) such decrease is not inconsistent with the RSL or this
Code.
No such reduction in rent or decrease in services shall take
place prior to the approval by the DHCR of the owner's
application, except that a service decrease pursuant to
paragraph (2) of this subdivision may take place prior to
such approval.
(e) An owner may file an application to modify or substitute
required services, at no change in the legal regulated rent,
on forms prescribed by the DHCR on the grounds that:
(1) the owner and tenant, by mutual voluntary written
agreement, consent to a modification or substitution of
the required services provided in the housing
accommodation;
(2) such modification or substitution is required for the
operation of the building in accordance with the
specific requirements of law; or
(3) such modification or substitution is not inconsistent
with the RSL or this Code.
No such modification or substitution of required
services shall take place prior to the approval of the
owner's application by the DHCR, except that a service
modification or substitution pursuant to paragraph (2)
of this subdivision may take place prior to such
approval.
(f) Pursuant to section 452(7) of the PHFL, as an alternative to
the rental adjustments for which an owner may file an
application under subdivision (a) of this section, upon the
completion of the rehabilitation of a multiple dwelling
which is aided by a loan made pursuant to article VIII-A of
the PHFL, HPD may adjust the rent for each housing
accommodation within the multiple dwelling pursuant to such
law.
Any work required pursuant to or as a condition of an
article VIII-A loan for which a rent adjustment is granted
under section 452(7) of the PHFL is not eligible for an
increase pursuant to paragraph (a)(2) or (3) of this
section.
Sec. 2522.5. LEASE AGREEMENTS.
(a) VACANCY LEASE OR RENTAL.
(1) For housing accommodations other than hotels, upon the
renting of a vacant housing accommodation, the owner
shall provide to the tenant a copy of the fully
executed lease for a one- or two-year term, at the
tenant's option (except where a mortgage or mortgage
commitment existing as of April 1, 1969 prohibits the
granting of one-year lease terms), bearing the
signature of the owner and tenant and the beginning and
ending dates of the lease term, within 30 days from the
owner's receipt of the vacancy lease signed by the
tenant. Such lease shall conform to the intent of
section 5-702 of the General Obligations Law (plain
English). The rent provided therein may not exceed the
last legal regulated rent in addition to all increases
authorized by this Code. For a housing accommodation
subject to the City Rent Law which becomes vacant after
March 31, 1984, the owner may not increase the rent
charged in the initial lease or other rental agreement
pursuant to annual guidelines for a period of one year
or until the expiration date of the initial lease or
rental agreement, whichever is later.
(2) For housing accommodations in hotels rented to an
occupant who has never had a lease, such occupant may
at any time during his or her occupancy request a lease
and the owner must, within 15 days after such request,
grant a lease commencing on the date such request was
made at a rent which does not exceed the legal
regulated rent, for a term of at least six months. The
hotel occupant who requests such a lease becomes a
permanent tenant but the lease need not be renewed.
Notwithstanding the above, an owner shall not refuse to
grant a lease or to extend or continue a tenancy in
order to prevent the hotel occupant from becoming a
permanent tenant, except to the extent that the owner
may be permitted to do so by law pursuant to a warrant
of eviction, or other order of a court of competent
jurisdiction, or a governmental vacate order.
(3) In addition, where a hotel occupant has not requested a
lease, an owner shall not refuse to extend or continue
a tenancy solely in order to prevent the hotel occupant
from becoming a permanent tenant.
(b) RENEWAL LEASE
(1) For housing accommodations other than hotels, upon such
notice as is required by section 2523.5 of this Title,
the tenant shall have the right of selecting at his or
her option a renewal of his or her lease for a one- or
two-year term; except that where a mortgage or a
mortgage commitment existing as of April 1, 1969
prohibits the granting of one-year lease terms or the
tenant is the recipient of a Senior Citizen Rent
Increase Exemption pursuant to section 26-509 of the
Administrative Code of the City of New York, the tenant
may not select a one-year lease. The owner shall
furnish to the tenant signing a renewal lease form,
pursuant to section 2523.5 of this Title, a copy of the
fully executed renewal lease form, bearing the
signatures of the owner and tenant, and the beginning
and ending dates of the lease term, within 30 days from
the owner's receipt of the renewal lease form signed by
the tenant. Such renewal lease form shall conform to
the intent of section 5-702 of the General Obligations
Law.
(2) Upon complaint by the tenant that he or she was not
served with a copy of the fully executed vacancy lease
or renewal lease form pursuant to paragraph (1) of
subdivision (a) or paragraph (1) of this subdivision,
the DHCR shall order the owner to furnish the copy of
the vacancy lease or renewal lease form. In addition to
any other penalties provided under this Code,
noncompliance by the owner within 20 days of such order
shall result in the denial of any rent guideline
increases for vacancy or renewal leases until the fully
executed copy of the vacancy lease or renewal lease
form is furnished by the owner to the tenant.
(c) LEASE RIDER AND NOTICE OF RIGHTS.
(1) For housing accommodations subject to this Code, an
owner shall furnish to each tenant signing a vacancy or
renewal lease, a rider in a form promulgated or
approved by the DHCR, in larger type than the lease,
describing the rights and duties of owners and tenants
as provided for under the RSL. Such rider shall conform
to the plain English requirements of section 5-702 of
the General Obligations Law, shall also be available in
Spanish, and shall be attached as an addendum to the
lease. Upon the face of each lease, in bold print,
shall appear the following: "ATTACHED RIDER SETS FORTH
RIGHTS AND OBLIGATIONS OF TENANTS AND LANDLORDS UNDER
THE RENT STABILIZATION LAW." ("LOS DERECHOS Y
RESPONSABILIDADES DE INQUILINOS Y CASEROS ESTAN
DISPONIBLE EN ESPANOL").
(i) For vacancy leases, such rider shall in addition
also include a notice of the prior legal regulated
rent, if any, which was in effect immediately
prior to the vacancy, an explanation of how the
rental amount provided for in the vacancy lease
has been computed above the amount shown in the
most recent annual registration statement, and a
statement that any increase above the amount set
forth in such registration statement is in
accordance with the adjustments permitted by the
Rent Guidelines Board and this Code.
(ii) For renewal leases, such rider shall be attached
to the form sent to the tenant pursuant to section
2523.5 of this Title.
(2) For housing accommodations in hotels, each owner shall
furnish to each person, at the time of registration, a
Notice of Rights in a form promulgated or approved by
the DHCR, describing the rights and duties of hotel
owners, occupants and tenants as provided for under the
RSL and this Code and a hotel occupant's right to
become a permanent tenant at a legal regulated rent by
requesting a lease for a term of at least six months at
any time during his or her occupancy. Such notice,
which shall conform to the "plain English" requirements
of section 5-702 of the General Obligations Law, shall
also be available in Spanish. Such notice shall be
provided to each hotel occupant in residence on the
effective date of this Code no later than 90 days from
such effective date. An owner who violates the RSL and
this Code by failing to furnish this Notice of Rights,
and/or by engaging in any conduct which compels a
person to rent as a hotel occupant, prevents a hotel
occupant from becoming a permanent tenant, or results
in a hotel occupant vacating a housing accommodation,
shall be subject to a loss of a guidelines adjustment
pursuant to paragraph (3) of this subdivision as well
as penalties pursuant to section 2526.2(b) and (c)(1)
of this Title, and may be subject to a penalty pursuant
to section 2526.2(c)(2) of this Title, in an amount no
less than $1,000.
(3) Upon complaint by the tenant, permanent tenant or hotel
occupant that he or she was not furnished with a copy
of the lease rider pursuant to paragraph (1) or the
notice pursuant to paragraph (2) of this subdivision,
the DHCR shall order the owner to furnish the rider or
notice. In addition to such other penalties provided
for pursuant to section 2526.2 of this Title, if the
owner fails to comply within 20 days of such order, the
owner shall not be entitled to collect any guidelines
lease adjustment authorized for any current lease from
the commencement date of such lease. The furnishing of
the rider or notice by the owner to the tenant or hotel
occupant shall result in the elimination,
prospectively, of such penalty. With respect to housing
accommodations in hotels, noncompliance by the owner
shall not prevent the hotel occupant from becoming a
permanent tenant.
(d) LIMITATIONS.
No provision may be made in any vacancy or renewal lease for
adjustment of the legal regulated rent reserved in the lease
except as follows:
(1) if the applicable rent guidelines rate has not been
fixed by the execution date of the vacancy lease or the
renewal offer, the lease may make provision for the
rent increase, if any, pursuant to the said rate when
filed, to become effective as of the commencement date
of the lease term, unless the Rent Guidelines Board
shall have fixed a later effective date for the said
rate, in which event the adjustment may only be
effective as of the later date;
(2) where such lease provides that the rental reserved
therein may be increased pursuant to an order issued by
the DHCR; or
(3) where such lease provides that a rent increase shall be
in the amount, if any, authorized by the DHCR in the
event an application is filed to establish a hardship
pursuant to section 2522.4(b) or (c) of this Part; and
(4) in the case of a vacancy lease, where an application
for a rent adjustment pursuant to section 2522.4(a)(2)
or (3), (b) or (c) of this Part is pending before the
DHCR, such lease also recites that such application is
pending before the DHCR and the basis for the
adjustment, and that the increase which is the subject
of such application, if granted, may be effective
during the term of the lease.
(e) ESCALATOR CLAUSES.
(1) Regardless of whether an escalator clause was contained
in the last effective lease or other rental agreement
prior to April 1, 1984, no renewal lease or vacancy
lease commencing on or after April 1, 1984 shall
provide for any escalator clause, except that nothing
herein shall prohibit the use of escalator clauses
otherwise required by any other statute or regulation
affecting the housing accommodation.
(2) For buildings receiving benefits pursuant to section
421-a of the Real Property Tax Law and the regulations
promulgated pursuant thereto, such clauses may provide
for an annual or other periodic rent increase over the
initial rent at an average rate of not more than 2.2
percent of the amount of such initial rent per annum
not to exceed the maximum cumulative amount, if any,
permitted under the 421-a program rules and
regulations. After the tax benefits end, such
additional 2.2 percent charges shall no longer be added
but the owner may continue to collect the cumulative
2.2 percent increases charged prior to the termination
of said tax benefits. Any lease containing the
aforementioned provision shall also include a rider
with an endorsement signed by the tenant acknowledging
the owner's right to include such provision and to
collect such rent increase for the tax benefit period.
Such rider shall state the approximate date of the
expiration of such tax benefits.
(3) Nothing in paragraph (2) of this subdivision shall
prohibit the inclusion of a lease provision for an
annual or other periodic rent increa