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Income Certification Form (ICF)

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Income Certification Form (ICF)

Postby dac10012 » Fri Mar 16, 2018 8:27 am

My landlord's lawyer served my co-tenant and me with an Income Certification Form because our stabilized rent is over the Deregulation Rent Threshold of $2,733.75. (It should be noted that the previous tenant was rent regulated with rent under the High Rent Deregulated Threshold, and, therefore, we were offered a rent regulated lease.) However the combined income for the co-tenant and myself is $180,000, which is under the $200,000 High Rent, High Income Deregulation Threshold.
The ICF asks if we have filed NYS Income taxes for 2016 and 2017. I have but the co-tenant has not because they are a legal alien resident but not a US citizen, so they are not required to pay US or NYS income taxes. However, they have income verification from their employer, if necessary. Such verification was used for the apartment application two years ago and we only need to get last year's verification.
Coincidentally, we have already asked the management company to remove the co-tenant's name from the renewal lease which begins June 1 and she has agreed to surrender the apartment by that date. So, effective with the next lease, her income won't be a factor.
The ICF only asks if our incomes are under or over the $200,000 limit and did we file NYS income taxes in 2016 and 2017. It does not ask for the actual amount of income or income verification. However, it is quite possible the landlord will ask for verification of the co-tenant's income when he sees that no NYS income tax was filed.
So, my questions: 1. What should we enter under co-tenant's reason for not filing NYS income tax? Should resident alien or not US citizen be entered in the inch and a half space provided on the RA-93 CF form? Or perhaps UN employee, which she is?; 2. Should we include income verification from her employer under separate attachment, although it's not required at this time but maybe/probably will be asked for?
By the way, since the co-tenant surrendered the apartment effective with the renewal lease, I received a renewal lease with only my name on it and I am waiting to return it completed 60 days from when it was prepared, well before the due date before the start of renewal lease.
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Re: Income Certification Form (ICF)

Postby TenantNet » Fri Mar 16, 2018 11:31 am

When you say co-tenant, I presume that is an unrelated person with both you and her being on the lease.

As you probably know, there are two types of deregulation: high-rent and high-income. The threshold for HIGH RENT is when the rent is over $2,700 (as of 2015) and that number will increase with the RGB increase percentage. If the rent goes above the threshold, the next tenant can be unregulated, not you.

At the outset, I would do a thorough analysis to see how your rent got that high. Entirely possible there might have been some LL fraud along the way.

On the other hand, HIGH INCOME decontrol is when the income for the household is above that threshold for two continuous years. On the LLs application, DHCR will send the tenant the form to fill out and return to DHCR.

As to who is required to file U.S. or NYS income taxes, I don't know that answer and you should probably consult a tax professional, if you haven't already done so. I do know some resident aliens (green card) and they are required to file U.S. taxes, so I would double-check on that.

Also, while a LL might require income verification in order for you to obtain a lease, once you have a RS lease, the LL cannot require subsequent income verification unless you're under a special program like Section 8 that does require income certification.

As to what DHCR will do if a tenant has not filed taxes, to be honest I do not know the answer to that. DHCR is not the IRS and I do not believe a tenant would be reported to the IRS (or the NYS equivalent) for failing to file a tax return.

But how DHCR considers that lack of information in deciding a high rent deregulation request, I would suggest you consult with a tenant attorney who has experience in how DHCR operates.

As for the co-tenant's lease surrender, understand that while she will no longer be a lease tenant, she can still live in the unit as a roommate. But even with that, DHCR I believe will consider roommate income for high income purposes.

Also, you should know that removing a lease tenant does not create a new vacancy lease, adding a new tenant to the lease will do so, and subject you to vacancy increases. So be prepared to continue as a single lease holder, or be willing to accept a vacancy increase.

If all DHCR does is ask if you are over or under the threshold, and if you've filed taxes, then answer truthfully. I do not know if the LL can demand further verification - but DHCR can. Still, you said the co-tenant's income can be verified. I would only report to DHCR, not the LL.

As for the reason for not filing, again, give the true answer. I do not know what DHCR will do based on various possible responses. Do not send additional information unless DHCR follows up and asks for more information (and also get a second - and preferably legal - opinion if the lack of filing will trigger anything with DHCR).

For forum readers see the form at http://www.nyshcr.org/Forms/Rent/ra93CF.pdf
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Re: Income Certification Form (ICF)

Postby dac10012 » Fri Mar 16, 2018 12:26 pm

The co-tenant is my girlfriend. As a UN employee, she is not required to pay US, NYS or NYC income taxes. The UN pays for her.

I was given a Vacancy Lease Calculation at the time I originally signed a lease, which included a detailed explanation of how the rent was raised from the previous tenant's rent, mostly from a gut renovation and some from the statutory vacancy increase. It looks OK, despite the high cost of the reno. I've moved on from this.

Since the co-tenant is not on the renewal lease,her income and taxes won't be an issue next year. Which brings me to another question. If you apply for a rent stabilized apt with a co-tenant and their income is used to determine if your income meets the landlord's requirements, what happens if they surrender their interest in the lease after tenancy?
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Re: Income Certification Form (ICF)

Postby TenantNet » Fri Mar 16, 2018 12:35 pm

You can't say a lease "looks OK" You need to go back to 1984 and get the DHCR rent history, and look at each rent increase and compare it to RGB allowable percentages for each period. There might be other issues, for example if the building gets J51 tax abatements. For any renovation, many LLs claim the increase but don't always do the work.

She won't be on the lease starting in June, but doesn't DHCR look for the last 2 years?

As I said, unless you're on a special program like Section 8 that requires yearly recertification, once you pass the LL's income requirements, and once you have the lease, the loss of household income does not mean the LL can refuse to renew your lease.
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Re: Income Certification Form (ICF)

Postby dac10012 » Fri Mar 16, 2018 12:54 pm

You're on the money. The Registration Apartment Information I have from DHCR goes back to 1984. The prior tenant not only had an ultra low rent stabilized rent but also a preferred rent that was $406 lower than that for the last five years of the lease. Nice. I know preferred rents are supposed to be "bad" but not in this case.

Getting back to the co-tenant and her income going forward, is there any advantage to indicating a prospective vacancy date of 5/31(the end of the current lease), even though the ICF only asks for vacancy dates of tenants who have already vacated?
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Re: Income Certification Form (ICF)

Postby TenantNet » Fri Mar 16, 2018 1:16 pm

So you need to find out how the ultra-low RS rent suddenly became this ultra-high rent that appears to exceed the deregulation trigger. Something is indeed fishy there.

Preferential rents are bad no matter what. They can screw up the rent history and hit tenants with unconscionable increases. And in most cases the higher "legal" amounts are not really legal.

Again, look at the time period in which DHCR looks at the income. I don't think DHCR looks at future household income.
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Re: Income Certification Form (ICF)

Postby dac10012 » Fri Mar 16, 2018 1:53 pm

OK, no point in noting she will be off the lease on the ICF.

I thought about challenging the $60K reno but they put a new floor in, now appliances a fixtures and even remodeled the layout of the apt.
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Re: Income Certification Form (ICF)

Postby TenantNet » Fri Mar 16, 2018 3:05 pm

Remodeled the layout? Did they have building permits? How much did they add on to the rent for all that? Was it done before you moved in, or at some other time in the past? If the former, you should have received a RS rider that details how much money they spent on everything. There are limits on how much they can add to the rent based on what they spend, and you can challenge that. Some items might not qualify for improvement costs.

See http://www.nyshcr.org/Rent/OperationalB ... o20161.pdf

If the building has 35+ units, they can only take 1/60th of the total costs of the improvements 1/60 x $60K = $1,000 that can be added to the rent. So if you're paying $2,700, that means the legal rent (after the vacancy increase of 18-20%) would have been in the $1,700 neighborhood. And that is not "ultra-low" as you describe it earlier.
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Re: Income Certification Form (ICF)

Postby dac10012 » Fri Mar 16, 2018 3:43 pm

Remodeling and reno were done after apt was vacated.

From the RS rider: prev reg rent $1,371; inc based on 2 yr lease $1,371x20%) = $274; inc based on 18 yrs since last vac allow 18x0.6%x$1,371 = $148; bathrm + kitchen reno $51,890 + appliances $2,392 = $54,282 x 1/60 = $905; floors, subfloors $7,950 x 1/60 = $133. New reg rent = $1,371 + $274 + $148 + $905 + $133 = $2,831.

I could have requested documentation but after much advice I learned that kitchen and bathroom renovation costs were pretty subjective. The math they used looks correct.
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Re: Income Certification Form (ICF)

Postby dac10012 » Wed Mar 21, 2018 4:41 pm

We've gotten way off topic but now I'm out of time. I tried to get into Met Council's rent clinic Tuesday night but they were full, so I'm supposed to go to Housing Conservation Coordinators intake tomorrow morning but with the snow, I'm pretty sure they'll be closed. The date on the ICF is March 8, so I assume my 30 day deadline for replying is Apr 7. Unfortunately, I will be out of town for the next two weeks, so I want to mail the completed form back to the landlord's attorney by Friday, March 23, day after tomorrow. It all boils down to how I explain my co-tenant's not filing NYS income tax. Without saying more than I'm required to, I'm thinking "United Nations employee." What do you think?
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Re: Income Certification Form (ICF)

Postby TenantNet » Wed Mar 21, 2018 5:28 pm

We always express caution about HCC's clinic. While there may be individual attorneys who volunteer there and who will have good information and advice, we've found HCC as an organization to be pretty bad and unreliable. BTW, even lawyers sometimes have to go research things.

What do you still need to know that you haven't looked at already?

One strategy - which we discussed is to challenging the rent increases over time. The legal rent has to be above the threshold in order for the High Income to even be considered.

Follow the instructions on the form exactly. Do not deviate. Make copies of everything and send all communication by certified mail (RRR).

How does she know she is not required to file NYS taxes? Did the UN tell her? Does she have it on paper (if so submit that). Does she have diplomatic status? I am assuming that she filed federal taxes with the IRS. If she's a green card holder, fed. taxes are still required.

To be honest, I don't think it's such a big deal. Just explain the situation. The LL will either buy it, or not. DHCR will decide on the information that's available to them.
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Re: Income Certification Form (ICF)

Postby dac10012 » Wed Mar 21, 2018 6:11 pm

Without going into details, UN employees pay taxes through the organization. And my co-tenant has diplomatic status.
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Re: Income Certification Form (ICF)

Postby TenantNet » Wed Mar 21, 2018 6:29 pm

You don't need to prove it to me, but I would have documentation of all that ready to substantiate the claim if needed. In general I would only give the LL the bare minimum that DHCR requires you to give to him ... not what he asks for. If the LL feels a three-word explanation is not sufficient, they will make a stink and then you can give it, preferably to DHCR. Never, ever, give a LL anything more than you absolutely must.
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Re: Income Certification Form (ICF)

Postby dac10012 » Wed Mar 21, 2018 6:43 pm

Agree 100% on bare minimum. I don't think paying taxes is the issue, just the standard and easiest way for DHCR to verify income. I guess they will have to ask us for documentation if the landlord doesn't believe our statement of income below the threshold. We have it if necessary. I guess it's SOP for landlords to ask DHCR to verify income is below the deregulation threshold when the rent is above the deregulation threshold?
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Re: Income Certification Form (ICF)

Postby TenantNet » Mon May 07, 2018 1:56 pm

Came across and posted this article: http://tenant.net/phpBB3/viewtopic.php?f=15&t=12683

I don't think it addresses any aspect of your situation described above, but still nice to know next time you want to open an embassy.
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