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 #29 - Conversion from Electric Inclusion to Exclusion
in Rent Stabalized Apartments, New York City
When a building converts from master metering of electricity (the cost
of electricity is included in the monthly rent) to individual metering, the
tenant becomes responsible for paying for the cost of electricity used in the
apartment directly to the public utility providing the electricity. This cost
was previously included in the tenant's rent but was billed directly to the
owner and it is now charged separately and directly to each apartment by the
In order to convert from master metering to individual metering, an
owner must first receive permission from the New York State Division of
Housing and Community Renewal (DHCR), Office of Rent Administration, by
submitting Owner's Application for Termination of Rent Inclusion of Electric
Current (DHCR Form RA-70) for Rent Stabilized Apartments. If the request is
granted, the owner may then proceed with the conversion. After the conversion
is completed, the owner is required to reduce the tenants rents on the first
rent payment following the conversion.
The new rent established would be the result of two (2) reductions. The
first would involve removing prior rent guidelines adjustments for electrical
inclusion and the second would require owners to reduce the stabilized rent of
each apartment by specific amounts based on usage.
The first adjustment, a weighted average based on lease terms,
guidelines increases by lease term, vacancy increases, and the electrical
inclusion adjustments was constructed to determine the increase in rent from
1974 to 1990. On average, DHCR found that the rent would have to be reduced by
6.6% to remove all guidelines adjustments previously built into the rent for
electrical inclusion. These adjustments, ordered by the New York City Rent
Guidelines Board, date back to the 1974/75 guidelines year.
After the rent stabilized tenants rents are permanently reduced by this
6.6% factor, DHCR then computes the tenants second rent reduction, which is
based on usage, in two stages.
Stage 1 - Temporary
Stage 1 lasts for one year and becomes effective on the same date that
the 6.6% reduction in the rent stabilized rent becomes effective. The rents
are reduced as follows:
1) $25 per month for each studio apartment.
2) $30 per month for each 1 bedroom apartment.
3) $35 per month for each 2 bedroom apartment.
4) $5.00 more for each additional bedroom.
Stage 2 - Permanent
Stage 2 is a permanent reduction (like the 6.6% reduction) and becomes
effective on the exact date that the Stage 1 reduction ends. The owner must
file a Stage 2 application after one year of converted status. The rent
reduction determined in Stage 2 replaces the standard rent reduction
determined in Stage 1. In this stage, the rents are reduced as a result of
the owner's monthly savings due to the building's conversion from master
metering to individual metering. The owner's monthly savings due to individual
metering conversion is determined by a formula based on the pre- and
post-conversion cost of electricity, energy conservation, and the differing
electrical rate structures. The owner's monthly savings are then shared among
all the apartments in the building and the rents of the tenants are adjusted
appropriately from the Stage 1 level. This adjustment may result in an
increase or decrease from the Stage 1 level.
Owners who fail to file for the permanent Stage 2 reduction may be
subject to overcharge findings and other penalties.
For more information or assistance, call the DHCR Rent InfoLine,
(718) 734-6400, or visit your Borough or County Rent Office.
92-31 Union Hall Street
Jamaica, NY 11433
250 Schermerhorn Street
Brooklyn, NY 11201
163 W. 125th Street
New York, NY 10027
North side of 110th St. and above
50 Clinton Street
Hempstead, NY 11550
55 Church Street
White Plains, NY 10601
156 William Street
New York, NY 10038
South side of 110th St. and below
1 Fordham Plaza
Bronx, NY 10458
60 Bay Street
Staten Island, NY 10301
94-96 North Main Street
Spring Valley, NY 10977