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 #23 - Fuel Cost Adjustment
                   (Questions and Answers for Owners)
                             [Revised 2/96]

What is a Fuel Cost Adjustment?

     New York City Local Law 20 of 1980 amended the New York City Rent
Control Law to permit rent adjustments based on the changes, up or down, in
the prices of heating fuels. Beginning in 1981, and for subsequent years, the
rent adjustment is based on fuel price changes between the beginning and end
of the prior year.

Who is covered by the Fuel Cost Adjustment law?

     Only owners and tenants of rent controlled apartments located in New
York City are covered by this law.

What are the Fuel Cost Adjustment filing requirements?

     Building owners must certify that they are maintaining essential
services and that it has been at least 12 months prior to filing that DHCR
ordered a rent restoration for any reduction in rent for failure to provide
heat and hot water or other essential services. Buildings that have not
qualified for Maximum Base Rent increases may be eligible for fuel cost

     To obtain the adjustment, the owner must complete, certify and serve
upon each eligible tenant, a copy of DHCR's Owner's Report, Certification, and
Notice of Fuel Cost Adjustment Eligibility (DHCR Form RA-33.10). The owner
must file with DHCR a master copy of the Report, together with Schedule A or B
where applicable, and a schedule of monthly rent increases for all the rent
controlled tenants who were served with copies of the Report. The rent
adjustment is collectible when the tenant and DHCR are served with the
completed Report forms and schedules. No order from the Rent Administrator is

May the owner collect the Fuel Cost Adjustment from a tenant whose Maximum
Collectible Rent (MCR) equals or exceeds the Maximum Base Rent (MBR) for the

    Yes, however, the owner must certify that the property will not be yielding
an 8 1/2% return on the equalized assessed value after receiving rent increases
for the fuel cost adjustment.

How is the Fuel Cost Adjustment computed?

    The quantity of fuel delivered during the previous year is divided by the
number of rooms in the building, not to exceed the annual maximum consumption
standard per room for the type of fuel used. This figure is then multiplied by
the price change, divided by 12 months and multiplied by 75%. Seventy-five
percent (75%) of the annual fuel cost per room is passed along to the tenant.

May an owner who failed to file for Fuel Cost Adjustments for past years, file
for future adjustments?

    Yes, an owner may file for future fuel cost adjustments; however, the past
fuel cost adjustments are forfeited.

May an owner who failed to file in 1989 for a Fuel Cost Adjustment, file in
1990 for the 1989 adjustment?

    No. To get a rent increase based upon price changes that occurred in 1988,
the owner had to file in 1989. If the owner did not file in 1989, the fuel
cost adjustment for 1989 is forfeited.

Do Fuel Cost Adjustments granted in 1989 terminate at the end of 1989?

    No. These increases continue to be collectible, unless modified or revoked
by order of the Rent Administrator. Any fuel cost adjustment for 1989 must be
added to or subtracted from the 1980 through 1988 adjustments, known as the
cumulative fuel cost adjustment.

Is the Fuel Cost Adjustment retroactive?

    Fuel cost adjustments are retroactive to January 1st of each year provided
the owner files the Report within 60 days after the fuel consumption and price
change standards are released. For reports filed with DHCR after the 60 day
period, the increase is prospective. Where an owner has obtained one or more
fuel cost increases previously and the cost of fuel decreases in a subsequent
year, the owner must file a timely Report and decrease the tenant's fuel cost
adjustment or the entire fuel cost adjustment will be suspended for that 12
month period.

Is there a penalty if an owner does not file a Fuel Cost Adjustment Report
when the cost of fuel decreases?

    Yes. When the cost of fuel decreases, the owner must file a timely Report
and pass the decrease on to the tenants. Failure to serve the tenants and DHCR
within 60 days after the fuel consumption and price change standards are
released will result in the suspension and revocation of all previous fuel
increases for a period of 12 months.

Is the Fuel Cost Adjustment incorporated in the rent for an apartment?

    No. The law states that the fuel cost adjustment is not to be incorporated
in the rent on which Maximum Base Rent increases are computed.

Can the Report be challenged if a tenant has reason to believe that the Report
is not accurate?

    Yes, a tenant has the right to challenge, based on any known error,
omission, or misrepresentation on the Report or any attachments. The tenant
should first contact the owner and attempt to resolve the disagreement. If
differences remain, the tenant has 33 days after receipt of the Report to file
the Tenant's Challenge to Landlord's Report and Certfication of Fuel Cost
Adjustment and Eligibility (DHCR Form RAC-2202.13).

What is the penalty if DHCR finds that an owner falsified a Fuel Cost
Adjustment Report?

    The law prescribes the following penalty for false certification: a refund
of fuel cost increases collected in 2 prior years, plus ineligibility for
future cost adjustments for 2 succeeding years from the date of the
determination that a false certification was made. Other penalties and
sanctions of the law may also be imposed.

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

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

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

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

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