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Re: Help decoding 'high rent' deregulation, also RRRA97

Posted by MJ on June 19, 2000 at 13:52:31:

In Reply to: Re: Help decoding 'high rent' deregulation, also RRRA97 posted by Anna on June 15, 2000 at 17:30:45:


Thanks still again for the further help understanding the confusing RRRA 1993/1997.

DHCR responded to my query about "luxury decontrol"; with respect to the question about whether an apartment had to have rented for $2000 before the landlord could apply for deregulation, it states: "If the legal rent for the prior tenant plus the allowable 'vacancy' increase (20% for a two-year lease) plus 1/40 of the cost of any improvements made while the apartment was vacant is equal to or exceeds $2,000 per month, the new tenancy will not be subject to rent stabilization."

So, when you say that "this section of 97 reads the same because it's not in this section: it is in the interplay of several sections," I take it that in other sections the inclusion of the vacancy increase plus 1/40 of renovation costs is allowed as part of the calculation?

There does appear to be disagreement between DHCR and others in interpreting RRRA 1997 because I see that the comment from the various legal groups that you cited to the proposed amendments to the RSC specifically states that the RRRA 1997 revised the code so that if the previous tenant would have paid $2000, then regardless of whether the tenant did in fact then the landlord can apply for deregulation ("Then, as part of the Rent Regulation Reform Act of 1997, the New York State Legislature again expanded the category of deregulated apartments by providing that any apartment that became vacant after June 19, 1997 could be considered deregulated if the legal rent would be $2,000.00 or more per month, whether or not such rent could have been collected from the last tenant prior to vacancy"). If the rent would theoretically have to have been collected from the last tenant, then the landlord would have only been able to raise the rent 2- 4%, not 20%, since 20% is only allowed if the apartment is actually vacated.

And there seems even to be conflict in interpreting RRRA 1997 from within the ranks of DHCR, since Ralph Carbone, who has worked at DHCR for the last 16 years, submitted comments about proposed amendments to the RSC on 25 May 2000 that make it sound like the idea that a landlord can apply for deregulation if he/she can show that the rent would have been $2000 is something now being proposed rather than something that is already law:

"Section 2520.11 permits the luxury decontrol of units regardless of whether a rent of $2000 or more is charged if the owner can demonstrate that such a rent could have been charged! A fundamental principle of rent regulation has always been that the rent charged and paid is to be utilized to determine a legal rent (not a hypothetical rent the owner could have charged but, for market conditions for example, was unable to charge). This language should be excised."


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