New York State
Division of Housing and Community Renewal
Office of Rent Administration
Gertz Plaza, 92-31 Union Hall St.
Jamaica, New York 11433
Public Information: (718)739-6400
Mario M. Cuomo, Governor
Donald M. Halperin, Commissioner
Joseph A. D'Agosta, Deputy Commissioner for Rent Administration
New York City Rent Stabilization Code
New York City Rent and Eviction Regulations
< OPERATIONAL BULLETIN 89-1 (JUNE 15, 1989) >
PROCEDURES PURSUANT TO THE REVISED RENT STABILIZATION CODE
FOR THE FILING OF AN OWNER'S APPLICATION TO REFUSE TO RENEW
LEASES ON THE GROUNDS OF DEMOLITION
INTRODUCTION
This Operational Bulletin is issued pursuant to Sections
2524.5(a)(2) and 2527.11 of the Rent Stabilization Code ("Code").
Section 2524.5(a)(2) of the Code provides that an owner shall not
be required to offer renewal leases to tenants where the DHCR has
granted such owner's application to demolish all of the
apartments located in the subject premises for the purpose of
constructing a new building. Below are the Eligibility, Notice,
Order, Relocation and other provisions relating to the demolition
application process.
SERVICE OF THE APPLICATION
The owner may file the application with DHCR personally or by
mail. At the time the owner files the application, the owner
shall also submit a sufficient number of copies of the
application for each tenant to receive a copy. As promptly as
practicable thereafter, the DHCR shall serve each tenant with
such copy, together with answer forms, and afford the tenant
twenty days to answer. The DHCR will also mail to each tenant a
copy of the Operational Bulletin advising the tenants of the
owner's obligations concerning Termination Notice requirements
pursuant to Code Section 2524.2(c)(3); the owner's obligations
pursuant to Code Section 2524.5(c) to pay certain moving expenses
and relocation benefits and the owner's other obligations,
tenants', rights and procedural advisement contained herein.
ELIGIBILITY
The term "owner" is specifically defined in Code Section
2520.6(i). For the purpose of filing a demolition application,
the proceeding must be instituted in the name, of the owner who
is a principal, as defined in that Code section, and not in the
name of an agent of such principal.
The owner must file the application on a form prescribed by the
DHCR (Form No. RC-50) and submit an affidavit from a licensed
architect that he or she has been retained by the owner and that
the project proposed on the subject site is feasible.
The owner must allege in the application and prove at a hearing
held by the DHCR, that the owner seeks in ''good faith to recover
possession of the housing accommodations for the purpose of
demolishing them and constructing a new building. The phrase
"good faith" means that the owner actually intends to accomplish
the purpose alleged in the application.
Good faith also includes meeting the following requirements:
(a) The New York City Department of Buildings has approved
the owner's plans for a new building on the site, and
the owner has submitted such plans to the DHCR.
(1) An owner, however, may file a demolition
application notwithstanding that at the time of
such filing his or her plans have not been
completed, provided that no hearing will be
conducted until the owner submits to the DHCR the
plans which have been submitted to the New York
City Department of Buildings for approval. No
order shall be issued by the DHCR granting the
owner's demolition application until the plans
have been approved. In the event that the approved
plans are not substantially similar to those
originally submitted to the New York City
Department of Buildings and to the DHCR, the
Administrator may, at his discretion, accept
additional evidence, or if the hearing is closed,
reopen the hearing. A plan shall not be considered
as substantially similar to the original plan
submitted where there is an increase of 25% or
more in the cost.
(2) With the building plans, the owner must submit an
affidavit from the licensed architect who prepared
the plans, specifically stating, in narrative
form, the nature of the project pursuant to the
plans, and based on a technical analysis of the
plans and specifications, the estimated cost of
construction. An architect's affidavit shall also
accompany any amendments to the original building
plan.
(b) The owner must submit proof of financial ability to
complete the project, such as a letter of commitment
from any regulated lending institution, insurance
company, or retirement or welfare fund. Proof of
financial ability may also consist of records of bank
accounts or securities whose values are published
regularly
In no event will a hearing be conducted until the owner has
submitted proof of financial ability to complete the project,
such as a good faith letter of commitment from any regulated
lending institution, together with copies of the plans that have
been submitted to the New York City Department of Buildings. No
order approving the owner's application will be issued until the
building plans have been approved and the owner submits proof of
financial ability to complete the project as specified in plans
which have been approved, such as binding commitments or other
adequate proof that all necessary funding for the proposed
construction has been secured. DHCR may at the discretion of the
Administrator dismiss an application because of the owner's
failure to proceed in a timely fashion.
A copy of all plans, statements or other documentation, and any
amendments thereto, which have been submitted to the DHCR, shall
simultaneously be made available for review by the tenants,
either in the office of the superintendent or such other area
readily accessible to all tenants.
Any harassment proceeding(s) pending against the owner with
respect to the subject premises shall be consolidated with the
owner's application and determined at the demolition application
hearing. A finding of harassment shall result in the denial of
the application.
NOTICE PROVISIONS
Once an application has been filed, the owner may refuse to renew
tenants' leases until a determination of the owner's application
is made pursuant to Code Section 2524.2(c)(3). The tenant may
remain in occupancy during such period and the owner may not
increase the rent.-Should the application be denied or withdrawn,
the owner must again offer prospective renewal leases to the
tenants as directed in the DHCR's order of denial or withdrawal.
Pursuant to Code Section 2524.2(c)(3), after filing a demolition
application, the owner must serve each tenant with a Termination
Notice at least 120 and not more than 150 days prior to the
expiration of the tenant's lease term ("window period"), or in
the case of a hotel permanent tenant without a lease, at least
120 and not more than 150 days prior to the commencement of a
court proceeding. With limited exceptions as explained below (see
page 4), provided each tenant whose 120-150 day window period
occurs prior to issuance of the Order is served with a timely
Termination Notice, the Order granting the application may be
issued conditioned upon further compliance with the service of
Termination Notices on all other tenants, and the compliance with
stipends and other conditions set. Such order shall also provide
that all remaining tenants may continue in occupancy at no
increase in rent until the expiration date of the last lease to
expire of any such tenants remaining in occupancy.
The Termination Notice may be served personally or by mail. An
affidavit by the person making the service or mailing shall
constitute sufficient proof of service. When service is by
registered or certified mail, the stamped post office receipt
shall also constitute sufficient proof of service. Once such
proof of service has been submitted, the burden of proving non-
receipt shall be on the party denying receipt. (Code Section
2527.9[a]).
The Termination Notice shall state:
(1) that the owner will not renew the tenant's lease because the
owner has filed an application pursuant to Code Section
2524.5(a)(2) for permission to recover possession of all of
the housing accommodations in the building for the purpose
of demolishing them and constructing a new building;
(2) that while the application is pending, the tenant may remain
in occupancy at no increase in rent;
(3) the facts necessary to establish eligibility (good faith
including financial ability, and approved plans);
(4) that the tenant shall not be required to vacate until the
DHCR has issued a final order approving the application and
setting forth the time for vacating, stipends and other
relocation conditions, and the owner has obtained a warrant
of eviction from a court of competent jurisdiction based
upon such order; and
(5) that the tenant must be offered a prospective renewal lease
if the application is withdrawn or denied
HEARING
A hearing will be scheduled as promptly as practicable upon the
owner's submission of substantial evidence of financial ability
to complete the project together with copies of the building
plans that have been submitted to the New York City Department of
Buildings. The hearing shall be held as promptly as practicable.
At the hearing, both the owner and tenants will be afforded an
opportunity to testify and submit proof on all relevant issues as
may be determined by the Administrative Law Judge. The
affirmative burden of proving good faith, the approval of plans.
and financial ability always rests upon the owner.
ADMINISTRATOR'S ORDER
The DHCR will evaluate the entire record of the proceeding and
will determine whether the owner's application should be granted.
The DHCR shall issue an order determining the owner's application
as promptly as practicable. If the DHCR issues an order denying
the application, or if the application is withdrawn by the owner,
prospective renewal leases must be offered to all affected
tenants as directed in the order of denial or withdrawal.
Where, however, the owner's application for permission to
demolish is not denied, an order granting the owner's application
will not be issued until:
(1) the approved plans have been filed with the DHCR; and
(2) the necessary funding for the proposed construction has been
secured.
The Order shall also be conditioned upon the compliance by the
owner with such terms as shall be set by the Administrator
relating to stipends and moving expenses and the compliance by
the owner with service of Termination Notices
In the event that the owner does not serve each tenant whose
window period occurred prior to the administrator's order with a
Termination Notice, but can establish before the Administrator
that such failure was not the result of a willful attempt to
evade this obligation, and if the owner can establish that he or
she has otherwise substantially complied with the obligation to
serve every such tenant, the DHCR shall not be required to
terminate the proceeding and may issue the order. Nevertheless,
any such tenant who is not served with the Termination Notice
will be entitled to remain in occupancy at no increase in rent
pursuant to a two year "deemed lease" commencing on the date
following the expiration date of the prior lease, plus 4 months.
Thereafter, during the pendancy of the proceedings no additional
renewal rights vest pursuant to the "deemed lease." The
Administrator's Order shall provide that alternatively, the owner
may, at his or her option, elect as part of the compliance
proceeding to pay a stipend based on an additional two year
period for any tenant remaining in occupancy who was not served
with a timely Notice of Termination as required.
In no event may any tenant be required to move out of an
apartment before the expiration date of the last lease to expire
of any tenant remaining in occupancy, or the date the owner's
application is finally determined, whichever is later. Where the
DHCR determines that an owner's failure to serve a timely Notice
of Termination occurred but was not willful, and where such owner
does not pay an additional two year stipend, such affected tenant
may remain in occupancy for the deemed two year lease term plus 4
months, if later than such periods.
STIPENDS AND OTHER RELOCATION CONDITIONS
Any order granting an owner's application shall require the owner
to pay all reasonable moving expenses. The tenant shall also be
afforded a reasonable period of time within which to vacate the
apartment.
The order granting the owner's application shall also provide
that, at the owner's option, the owner may:
(1) Relocate the tenant to a suitable housing accommodation at
the same or lower regulated rent in a closely proximate area
which may include an accommodation in the new residential
building if constructed on the site provided suitable
interim housing is provided to the tenant at no additional
cost; plus, in addition to reasonable moving expenses,
payment of a $5000 stipend. Where an owner provides
relocation of the tenant to a suitable housing accommodation
at a rent in excess of that for the subject housing
accommodation, in addition to the tenant's reasonable moving
expenses, the owner shall be required to pay the tenant a
stipend equal to the difference in rent between the subject
housing accommodation and the housing accommodation to which
the tenant is relocated multiplied by 84 months (7 years).
Where the tenant is in occupancy for longer than 7 years,
this period shall be extended 1 year for each additional
year of occupancy up to a maximum of 15 years. In no event
shall the 7 year stipend period be extended for any year of
occupancy occurring after the issuance of a final order, as
defined by Code Section 2520.6(t), determining the date on
which the owner is authorized to obtain possession of the
apartment. To offset a potential tax liability of 28% which
the recipient of such stipend may incur, the amount of the
stipend (exclusive of moving expenses) should be divided by
0.72. The resulting figure is the total amount of the
stipend.
or
(2) Pay the tenant a stipend which shall be the difference
between the tenant's current rent and an amount to be
calculated as follows: $314 per room per month multiplied by
the actual number of rooms in the tenant's current housing
accommodation, but no less than three rooms. This difference
is to be multiplied by 84 months (7 years). Where the tenant
is in occupancy for longer than 7 years, this period shall
be extended 1 year for each additional year of occupancy up
to a maximum of 15 years. However, the number of rooms would
be limited to 3 for the purposes of calculating the maximum
rent for each year above 7 years. Note: To offset the
potential tax liability, an increase of 28% has been
included in the stipends listed below (exclusive of moving
expenses).
Please consult the following Demolition Stipend Charge for sample
calculations of stipends:
[note: the following table is split for display purposes.]
Num. Maximum Monthly Allowance By Current
of Monthly Rent If Rent Equals:
Rooms Allowance
$200 $500 $1,000 $1,500
$ $ $ $ $
3 942 742 442 0 0
4 1,256 1,056 756 256 0
5 1,570 1,370 1,070 570 70
6 1,884 1,684 1,384 884 384
7 2,198 1,998 1,698 1,198 698
8 2,512 2,312 2,012 1,512 1,012
9 2,826 2,626 2,326 1,826 1,326
10 3,140 2,940 2,640 2,140 1,640
Num. Maximum Total Stipend By Current
of Monthly Monthly Rent for Tenancies
Rooms Allowance up to and including 7 years,
and including 28% tax adjustment
$200 $500 $1,000 $1,500
$ $ $ $ $
3 942 86,567 51,567 0 0
4 1,256 123,200 88,200 29,867 0
5 1,570 159,833 124,833 66,500 8,167
6 1,884 196,467 161,467 103,133 44,800
7 2,198 233,100 198,100 139,767 81,433
8 2,512 269,733 234,733 176,400 118,067
9 2,826 306,367 271,367 213,033 154,700
10 3,140 343,000 308,000 249,667 191,333
Note: The dollar value of the stipend will be fixed as of the
date of issuance of the order
* Definition of a room:
(1) A windowless kitchen containing at least 59 square feet
(2) An enclosed area with window containing at least 60 square
feet
(3) An enclosed area without window containing at least 80
square feet
(4) Does not include bathroom, walk-in closet, etc.
For orders issued during a period commencing October 1, 1989, and
on or after October 1st of each subsequent year, the $314 per
month base will be raised by the applicable guidelines increase
available for a one year renewal lease. The $314 per month base,
plus annual adjustments, shall remain in effect until the release
of a new Housing and Vacancy Survey for the City of New York, at
which time the base rent per room shall be adjusted to reflect
the rent in those categories which fall below the 80th percentile
in that next Survey.* In any event, the minimum stipend hereunder
shall be the tenant's reasonable moving expenses plus $6944 (or
$5000 divided by 0.72).
Wherever a stipend would result in any tenant losing a subsidy or
other governmental benefit which is income dependent, at the
tenant's option, the owner must at his or her own expense,
relocate the tenant to a suitable housing accommodation at the
same or lower regulated rent in a closely proximate area
"SUITABLE HOUSING ACCOMMODATIONS" as used in this Operational
Bulletin shall mean apartments which are similar in size and
feature to the respective apartments now occupied by the tenants.
Such apartments shall be freshly painted before the tenant takes
occupancy and shall be provided with substantially the same
required services and equipment tenants now receive in their
present apartments. The building containing such accommodations
shall be free from violations of law recorded by a city agency
having jurisdiction, which constitute fire hazards or conditions
dangerous or detrimental to life or health, or which affect the
maintenance of required services.
If the tenant vacates the apartment on or before the date upon
which the DHCR order (the Administrator's order, if a PAR is
filed, the Commissioner's order), authorizes the owner to obtain
possession of the apartment, and the owner chooses the option of
paying a stipend to the tenant, such tenant shall be entitled to
the entire stipend.
If the tenant does not vacate the apartment on or before the date
upon which a final DHCR order authorizes the owner to obtain
possession of the apartment, the stipend shall be reduced. The
reduction of the stipend shall be calculated as follows:
The number of years used to calculate the amount of the stipend
will be multiplied by 12 to obtain the total number of months.
The formula for determining the stipend is based on data
derived from the 1987 New York City Housing and Vacancy
Survey. The stipend compensates for a reasonably expected
alternative rent ($314 per room per month), multiplied by
the typical length of tenure (84 months). While the
$314/month rent remains constant for the projected period of
time, it is deemed to be equivalent to taking the present
value of such rent with projected guidelines increases over
time.
Since the actual enumeration for the Survey occurred between
January and March of 1987, the rent level was increased by
3% (one year lease renewal guideline for 1987-1988) and by
6% (one year lease renewal guideline for 1988-1989) over
which the stipend would be paid. The amount of the total
stipend will be divided by such number of months to
determine a monthly stipend. The number of months during
which the tenant remains in occupancy of the apartment after
the date on which the owner is authorized by a final order,
as defined in Code Section 2520.6(t), to obtain possession
thereof will be multiplied by the monthly stipend. The
resulting figure will be subtracted from the total stipend
to determine the reduced stipend to which the tenant is
entitled.
Where the order of the DHCR granting the owner's demolition
application is conditioned upon the owner's compliance with
specified terms and conditions, if such terms and conditions have
not been complied with, the order may be modified or revoked.
COMPLIANCE PROCEDURES
1. Within thirty days after the issuance of the Administrator's
Order the owner shall notify the Compliance Unit of the DHCR
of the following:
(a) the name and apartment number of each tenant in
occupancy on the date of the Administrator's Order;
(b) the expiration date of each tenant's lease;
(c) proof of the service of a timely Termination Notice on
all remaining tenants where the period of time for
serving such notice has occurred prior to the issuance
of the order. Such period of time is at least 120 and
not more than 150 days prior to the expiration of the
lease term;
2. For the following requirements, the Compliance Unit must be
notified within 30 days after the owner has:
(a) served a timely Termination Notice on all tenants where
the period of time for service of the Termination
Notice did not occur before the issuance of the order.
(Such period of time for serving the Termination Notice
is at least 120 and not more than 150 days prior to the
expiration of the lease term.) The owner must submit
proof of such service;
(b) complied with the relocation requirements as set forth
in the order. The owner must submit proof of such
compliance;
(c) arranged for the payment of stipends as set forth in
the order. The owner must submit proof of such payment
arrangement.
A tenant may file an objection with the DHCR challenging the
suitability of an apartment offered by the owner for relocation,
within ten (10) days after the owner identifies the apartment and
makes it available for the tenant to inspect and consider the
suitability thereof. The apartment will then be inspected by the
staff of the DHCR, on notice to both sides, so that the DHCR may
determine whether the offered apartment was suitable. The DHCR
will make such determination as promptly as practicable
thereafter. In the event the DHCR determines that the apartment
is not suitable, the tenant shall be offered another apartment
and have ten (10) days after it is made available by the owner
for the tenant's inspection to consider its suitability.
In the event the DHCR determines that the apartment is suitable,
the tenant shall have thirty (30) days thereafter within which to
accept the apartment or lose the right to relocation by the
owner.
The DHCR will consider proposed apartments for relocation which
are not presently subject to rent regulation provided the owner
will submit such units to regulation by contract with the DHCR.
If the owner does not serve every tenant whose window period
occurred subsequent to the Administrator's Order with a
Termination Notice and can establish at the Compliance Proceeding
that such failure was not the result of a willful attempt to
evade this obligation, and if the owner can establish that he or
she has otherwise substantially complied with the obligation to
serve every tenant. the DHCR will not find the owner to be in
noncompliance. Instead, the owner shall be required to pay a
stipend based on an additional two year period for any tenant
remaining in occupancy who was not served with a timely Notice of
Termination as required.
Any determination issued by the Compliance Unit pursuant to this
Operational Bulletin shall be a Commissioner's Order.
ADMINISTRATIVE REVIEW
Any party aggrieved by the Administrator's determination may file
a Petition for Administrative Review (PAR) in accordance with
Part 2529 of the Rent Stabilization Code. The filing of a PAR
shall stay such order until the final determination of the PAR by
the Commissioner. Upon a showing of good faith, the Commissioner
may entertain requests for expedited processing of the PAR where:
1) the proposed new building will contain at least twenty
percent (20%) more housing accommodations than the existing
structure;
2) the owner is providing actual relocation to a suitable
housing accommodation at the same or lower rent to the
tenants as provided in this Operational Bulletin;
3) there are other equitable grounds.
Elliot G. Sander
Deputy Commissioner for Rent Administration
--------------------------------------------------------------
DHCR Operational Bulletins are issued by the New York State
Division of Housing and Community Renewal (DHCR) and update
agency administration of the rent laws.
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
of DHCR policy. The reader is advised to obtain true copies of
these documents from DHCR. Also see DHCR Policy Statements,
DHCR Advisory Opinions, the Rent Stabilization Code, the Rent
Stabilization Law and various Rent Control Statutes.
Every attempt has been made to conform to the original Operational
Bulletins as issued by DHCR; 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. (rev. 3/13/96) DHCR documents
are public documents; the electronic version of such documents
have been developed by TenantNet and any added value, enhancements
and/or proprietary features are copyright 1994, 1995 and 1996 by
TenantNet. These documents may be freely distributed provided they
remain intact as herein presented, including this and the top
informational banner referencing TenantNet as the original provider.
------------------------------------------------------------
For more information or assistance. call the DHCR Rent Infoline
at (718) 739-6400, or visit your Borough Rent Office.
Queens Central Office
92-31 Union Hall St. 4th Fl.
Jamaica, NY 11433
(718) 739-6400
Bronx
One Fordham Plaza
Bronx, NY 10458
(718) 563-5678
Brooklyn
250 Schermerhorn St.
3rd Floor
Brooklyn, NY 11201
(718) 780-9246
Lower Manhattan
156 William Street
9th Floor
NY, NY 10038
(212) 240-6011, 6012
South side of 110th St. and below
Upper Manhattan
163 W. 125th St.
5th Floor
NY, NY 10027
(212) 961-8930
North side of 110th St. and above
Staten Island
350 St. Mark's Place
Room 105
Staten island, NY 10301
(718) 816-0277
Nassau County District Rent Office
50 Clinton Street, 6th Floor
Hempstead, NY 11550
(516) 481-9494
Westchester County District Rent Office
55 Church Street, 3rd Floor
White Plains, NY 10601
(914) 948-4434
Rockland County District Rent Office
94-96 North Main St.
Spring Valley, NY 10977
(914) 425-6575
Albany Regional Office
119 Washington Avenue
Albany, NY 12210
(518) 432-0596
Buffalo Regional Office
Ellicot Square Building
295 Main St., Room 438
Buffalo, NY 14203
(716) 856-1382
------------------------------------------------------------
