George E. Pataki, Governor         Joseph H. Holland, Commissioner

                     A publication of New York State
                 Division of Housing and Community Renewal
                        Office of Rent Administration

               Fact Sheet #6 - Fair Market Rent Appeals
                            [Revised 2/96]

     In NYC, when a tenant moves out of a rent controlled apartment, the
  apartment becomes decontrolled. If that apartment is in a building
  built before January 1, 1974 containing six or more units, it becomes
  rent stabilized. The owner must register the unit with the NYS Division
  of Housing and Community Renewal (DHCR) by completing the Initial
  Apartment Registration, (DHCR Form RR-1) and must provide the tenant
  with a copy by certified mail.  The owner may charge the first
  stabilized tenant a rent negotiated between them, which is subject to
  the tenant's right to file a "Fair Market Rent Appeal" (FMRA).

     An FMRA is a challenge to that negotiated rent, and it must be filed
  by the tenant within ninety days after the notice to the tenant of the
  initial legal  registered rent.  This notice is accomplished when the
  owner properly serves the tenant with the initial registration (DHCR
  Form RR-1) within ninety days of the commencement of the occupancy.  If
  the tenant challenges this initial legal registered rent and the rent is
  found to be excessive, the rent as adjusted by DHCR will become the
  Adjusted Initial Legal Rent, or the Legal Regulated Rent.  If the appeal
  is denied or if no appeal is filed within the ninety-day period, then
  the negotiated initial legal registered rent becomes the lawful rent,
  not subject to challenge.  All future rent increases, whether for a
  renewal or vacancy lease,  are subject to limitations provided under the
  Rent Stabilization Law.

     The formula for determining FMRAs consists of averaging the greater of
  the maximum collectible rent or maximum base rent under rent control as
  adjusted by the Special Guidelines for determining Fair Market Rent
  Appeals promulgated each year by the NYC Rent Guidelines Board, with the
  rents of qualifying comparable apartments, updated if appropriate.  To
  the average of these two factors, an adjustment is added for any new
  equipment installed in the apartment.  The FMRA procedure is
  specifically described in Section 2522.3 of the Rent Stabilization Code.

     Orders determining Fair Market Rent Appeals in which the legal rent is
  established at an amount lower than that being paid by the tenant
  usually direct the owner to make the refund of any excess rent to the
  tenant in cash, check, or money order.  The owner may, however, credit
  the refund against future rents over a period of up to six months.  If
  the required refund is greater than six months' rent, the tenant at his
  or her option may continue to credit the rent until the refund is fully
  credited, or request the owner to refund any balance outstanding at the
  end of the six-month period. Unlike "overcharge" cases, the penalties of
  treble damages and interest may not be imposed on an owner in Fair
  Market Rent Appeal cases.

     For more information or assistance, call the DHCR  Rent InfoLine (718)
  739-6400, or visit your Borough or County Rent Office.

  Central
  92-31 Union Hall Street
  4th Floor
  Jamaica, NY 11433
  (718) 739-6400

  Brooklyn
  250 Schermerhorn Street
  3rd Floor
  Brooklyn, NY 11201

  Upper Manhattan
  163 W. 125th Street
  5th Floor
  New York, NY 10027
  North side of 110th St. and above

  Nassau County
  50 Clinton Street
  6th Floor
  Hempstead, NY 11550

  Westchester County
  55 Church Street
  White Plains, NY 10601

  Lower Manhattan
  156 William Street
  9th Floor
  New York, NY 10038
  South side of 110th St. and below

  Bronx
  1 Fordham Plaza
  2nd Floor
  Bronx, NY 10458

  Staten Island
  60 Bay Street
  7th Floor
  Staten Island, NY 10301

  Rockland County
  94-96 North Main Street
  Spring Valley, NY 10977