Met Council Fact Sheet

NYC Rent Guidelines Board Adjustments (Order No. 29) for Rent Stabilized Leases commencing Oct. 1, 1997 through Sept. 30, 1998, including the Pataki vacancy bonuses adopted by the State Legislature on June 19, 1997

The above rent guidelines are the maximum increases landlords in New York City can legally charge for rent stabilized apartments on all leases commencing in the twelve- month period beginning October 1, 1997. Increases in rent based on the 1- or 2-year renewal guidelines can be charged only once during the period covered by the guidelines, and must be applied to the legal stabilized rent on September 30, 1997. The above guidelines and vacancy bonuses do not apply to an apartment which was rent controlled on that date.

Vacancy Leases

In June 1997, Governor George Pataki as a part of his efforts to destroy rent regulation forced changes that gave landlords large vacancy bonuses. A provision of his Rent Regulation Reform Act of 1997 allows the rents of apartments which have had a vacancy allowance within the previous 8 years to rise by a statutory percentage: 20 percent for a 2-year lease, and 20 percent minus the difference between the 1- and 2-year renewal guidelines for 1-year leases. The new law also allows additional vacancy increases for apartments which have had no vacancy allowance in eight or more years.

The Pataki vacancy bonuses were made effective June 15, 1997, overlapping the 9 percent vacancy allowance of the previous RGB Order 28 in the three-and-a-half month period June 15 through September 30, 1997. A dispute arose over whether the 9 percent can be added to the Pataki vacancy bonuses in that period. Pataki and his agency, the Division of Housing and Community Renewal, have taken the position that the 9 percent can be added.

This interpretation will certainly be challenged in the courts over time. Meanwhile, new tenants signing vacancy leases in that period can expect their landlords to charge 27 and 29 percent increases over the prior legal rent for 1- and 2-year vacancy leases, respectively. The above table does not include the disputed 9 percent; the RGB did not pass a separate vacancy allowance under Order 29, so that the Pataki vacancy bonuses alone apply on or after October 1, 1997.

Rent Overcharges

Tenants should be aware that many landlords will exploit the complexities of these guidelines and bonuses, and the tenant's unfamiliarity with the apartment's rent history, to charge an illegal rent. After taking occupancy, the tenant can choose between filing an overcharge complaint with the Division of Housing and Community Renewal or challenging the rent in Housing Court to get a determination of the legal rent. A DHCR complaint of overcharge is processed entirely through the mails, where a Housing Court challenge requires the tenant to appear during workdays before a judge and have some knowledge of court procedures. Most tenants get into Housing Court by withholding rent and being sued by their landlords for non-payment.

A new tenant negotiating a lease on a vacant apartment should be prepared to pay what the landlord demands (if affordable) without raising questions about the legality of the rent directly with the landlord, broker, or managing agent. A prospective tenant who expresses knowledge of their rights will probably not be given a lease to sign. Landlords avoid renting to tenants who may be troublesome. Overcharging is very common. Every tenant should challenge possible overcharge. With DHCR, obtain and fill out Form RA-89 to determine the correct rent from official records. Call DHCR at (718) 739-6400 to obtain the form.

Fair Market Rent Appeal

Another type of overcharge frequently occurs at the time that a previously rent controlled apartment becomes vacant and is re-rented as a stabilized unit. The first stabilized rent charged by the landlord is allowed to be what the market will bear, but, to encourage fair levels of rent increase, the tenant has the corresponding right to challenge that market rent as being unfairly high over the prior rent controlled rent. The Rent Guidelines Board annually sets what they call the "Special Fair Market Rent Guideline" that is used by DHCR to lower unfair market rents for tenants who file the Fair Market Rent Appeal (FMRA). Under Order 29, it is the greater of either 50 percent above the rent-controlled maximum collectible rent or 40 percent above the maximum base rent, plus the fuel cost adjustment. Because rent controlled rents are so far below the sky-high market rents, tenants who are wise enough to file often get large rent reductions and recover tens of thousands of dollars.

No stabilized tenant of a apartment that was decontrolled on or after April 1,1984 should fail to challenge the so-called Initial Legal Regulated Rent (market rent) that landlords charge upon decontrol. Use DHCR Form RA-89. Indicate clearly that your complaint is both a complaint of "overcharge" and "Fair Market Rent Appeal." The Housing Court cannot determine a Fair Market Rent Appeal. Formerly controlled vacant apartments in buildings converted to co-ops or condos do not become stabilized and are not eligible for a Fair Market Rent Appeal.

Senior Citizen Rent Increase Exemption

Rent stabilized seniors, 62 years or older, whose disposable annual family income is $20,000 or less and who pay (or face a rent increase that would cause them to pay) one-third or more of that income in rent may be eligible for a Senior Citizen Rent Increase Exemption (SCRIE) if they apply to the NYC Dept of the Aging, SCRIE Unit at 2 Lafayette Street, NY, NY 10007. If an otherwise eligible tenant's current rent level is already above one-third of income, it cannot be rolled back, but future rent increases may be waived. Obtain Form C1- Rev. 1/93. Order the form by calling (212) 240-7000.

Loft Units

Legalized loft unit increases above the base rent are the same as the renewal percentages for regular apartments. However, no vacancy allowance is permitted on vacant lofts.

Hotels and SROs

The guideline is 0 percent for Class A apartment hotels, lodging houses, Class B hotels (30 rooms or more) and single room occupancy (SROs) hotels, and 2 percent for rooming houses (Class B, 6-29 rooms), above the legal rent paid on September 30, 1995. No vacancy allowance is permitted. The rooming house guideline is not collectible if (1) 1 percent or more of the units have been held off the rental market for more than 30 days, or (2) 20 percent or more of the units are not registered with DHCR, or (3) 50 percent or more of the units are used or held for other than permanent residential housing at the legal rent. Further, no increase is allowed when the landlord has failed to provide the new occupant a copy of the Rights and Duties of Hotel Owners and Tenants.

High-rent, High-income Deregulation

(1) Apartments legally renting for $2000 or more a month that became vacant from July 7, 1993 through October 1, 1993, or on April 1, 1994 and thereafter are subject to deregulation. (2) The same deregulation applies in the time periods set forth in (1) above to apartments legally renting for $2000 or more a month without their becoming vacant if the total household income exceeds $250,000 on average in the prior two consecutive years. The income threshold of $250,000 is lowered to $175,000 effective January 1, 1998. To be eligible for this second form of deregulation, the landlord must send an income certification form to the tenant between January 1 and May 1 and file it with and get the approval of DHCR.