New York Rent Laws
EHRCL Table of Contents

The Emergency Housing Rent Control Law of 1961 [EHRCL]

Section 4. GENERAL POWERS AND DUTIES OF THE COMMISSION. 1. At the time this act shall become effective, the commission shall establish maximum rents which shall be (a) for housing accommodations outside the city of New York, the maximum rent which was established on March first, nineteen hundred fifty, pursuant to the federal act, and shall not include adjustments granted by orders issued under the federal act after that date, regardless of whether they were made effective as of, or retroactive to, that date or a date prior thereto; and (b) for housing accommodations within the city of New York, the maximum rent which was established on March first, nineteen hundred fifty, pursuant to the federal act, and shall not include either, (1) adjustments granted by orders issued under the federal act after that date, regardless of whether they were made effective as of, or retroactive to, that date or a date prior thereto, or (2) adjustments granted by orders increasing the maximum rent, issued after March first, nineteen hundred forty-nine, under the federal act, regardless of whether the order of increase was made effective as of, or retroactive to, March first, nineteen hundred forty-nine, or a date prior thereto, but shall include adjustments for new or additional services or facilities provided by the landlord while the housing accommodations were not rented or where tenant- occupied, to which the tenant then in possession had agreed, either expressly or impliedly; and (c) for housing accommodations within the cities of New York and Buffalo which on March first, nineteen hundred fifty, had no maximum rent established pursuant to the federal act, but which were subject to a maximum rent established pursuant to the local laws of the cities of New York and Buffalo, the maximum rent which was established on March first, nineteen hundred fifty, pursuant to such local laws. 2. Whenever the commission determines that such action is necessary to effectuate the purposes of this act, it may also establish maximum rents for housing accommodations, as that term is defined herein, in municipalities in which no maximum rent was in effect on March first, nineteen hundred fifty. Any housing accommodation for which a maximum rent is so established shall be deemed a housing accommodation for all the purposes, and subject to all the provisions of this act. 2-a. For housing accommodations created by a change from a non- housing to a housing use or by conversion on or after February first, nineteen hundred forty-seven, including those decontrolled by order, and certified by a municipal department having jurisdiction to be a fire hazard or in a continued dangerous condition or detrimental to life or health, the maximum rent shall be the rent charged on January first, nineteen hundred fifty-seven, or the date of first rental, whichever is later. Any housing accommodations for which a maximum rent is so established shall be deemed a housing accommodation for all the purposes, and subject to all the provisions of this act, but only so long as such illegal or hazardous condition continues and further certification with respect thereto shall not be required notwithstanding any inconsistent provision of this act. 2-b. Provision shall be made pursuant to regulations prescribed by the commission for the establishment, adjustment and modification of maximum rents in rooming houses, which shall include those housing accommodations subject to control pursuant to the provisions of paragraph (b) of subdivision two of section two of this act, having regard for any factors bearing on the equities involved, consistent with the purposes of this act to correct speculative, abnormal and unwarranted increases in rent. 3. Whenever the foregoing standard is not susceptible of application to a housing accommodation to which this act applies, and for which no maximum rent was established on March first, nineteen hundred fifty, or where no registration statement had been filed as had been required by the federal act, the maximum rent thereof shall be fixed by the commission, having regard to the maximum rents for comparable housing accommodations or any other factors bearing on the equities involved, consistent with the purposes of this act. 3-a. Notwithstanding the foregoing provisions of this section, on and after May first, nineteen hundred fifty-three, the maximum rent for any housing accommodations shall not be less than the maximum rent in effect on March first, nineteen hundred forty-three (or if there was no such maximum rent then in effect, the maximum rent first established pursuant to the federal act prior to July first, nineteen hundred forty-seven) plus fifteen per centum thereof as such sum is adjusted to reflect: (1) the amount of any decreases in maximum rent required by order because of decreases in dwelling space, services, furniture, furnishings or equipment, or substantial deterioration or failure to properly maintain such housing, and (2) the amount of increases in maximum rent authorized by order because of increases in dwelling space, services, furniture, furnishings or equipment, or major capital improvements. Nothing contained in this subdivision, however, shall have the effect of increasing the maximum rent of any housing accommodation more than fifteen per centum above the maximum rent in effect on April thirtieth, nineteen hundred fifty- three. 4. (a) The commission may from time to time adopt, promulgate, amend or rescind such rules, regulations and orders as it may deem necessary or proper to effectuate the purposes of this act, including practices relating to recovery of possession; provided that such regulations can be put into effect without general uncertainty, dislocation and hardship inconsistent with the purposes of this act; and provided further that such regulations shall be designed to maintain a system of rent controls at levels which, in the judgment of the commission, are generally fair and equitable and which will provide for an orderly transition from and termination of emergency controls without undue dislocations, inflationary price rises or disruption. Provision shall be made pursuant to regulations prescribed by the commission, for individual adjustment of maximum rents where the rental income from a property yields a net annual return of less than seven and one-half per centum of the valuation of the property. Such valuation shall be the current assessed valuation established by a city, town or village, which is in effect at the time of the filing of the application for an adjustment under this subparagraph properly adjusted by applying thereto the ratio which such assessed valuation bears to the full valuation as determined by the state board of equalization and assessment on the basis of assessment rolls of cities, towns and villages for the year nineteen hundred fifty-four and certified for such year by such board pursuant to section forty-nine-d of the tax law; provided, however, that where at the time of the filing of the application for an adjustment under this subparagraph such board has computations for such year indicating a different ratio for subclasses of residential property in a city, town or village, the commission shall give due consideration to such different ratio except ratios in excess of one hundred percent, provided, further, that where such board has not determined and certified any ratio pursuant to such section of such law for a city, town or village for such year, the commission shall apply the ratio determined or certified by such board pursuant to section twelve hundred twelve of the real property tax law for the most recent year; except where there has been a bona fide sale of the property within the period between March fifteenth, nineteen hundred fifty-seven, and the time of the filing of the application, as the result of a transaction at arms` length, on normal financing terms at a readily ascertainable price and unaffected by special circumstances such as a forced sale, exchange of property, package deal, wash sale or sale to cooperative; provided, however, that where there has been more than one such bona fide sale within a period of two years prior to the date of the filing of such application the commission shall disregard the most recent of such sales if a prior sale within such two-year period was adopted as the valuation of the property in a proceeding under this subparagraph. In determining whether a sale was on normal financing terms, the commission shall give due consideration to the following factors: (i) The ratio of the cash payment received by the seller to (a) the sales price of the property and (b) the annual gross income from the property; (ii) The total amount of the outstanding mortgages which are liens against the property (including purchase money mortgages) as compared with the equalized assessed valuation of the property; (iii) The ratio of the sales price to the annual gross income of the property, with consideration given to the total amount of rent adjustments previously granted, exclusive of rent adjustments because of changes in dwelling space, services, furniture, furnishings or equipment, major capital improvements, or substantial rehabilitation; (iv) The presence of deferred amortization in purchase money mortgages, or the assignment of such mortgages at a discount; (v) Any other facts and circumstances surrounding such sale which, in the judgment of the commission, may have a bearing upon the question of financing. No application for adjustment of maximum rent based upon a sales price valuation shall be filed by the landlord under this subparagraph prior to six months from the date of such sale of the property. In addition, no adjustment ordered by the commission based upon such sales price valuation shall be effective prior to one year from the date of such sale. Where, however, the assessed valuation of the land exceeds four times the assessed valuation of the buildings thereon, the commission may determine a valuation of the property equal to five times the equalized assessed valuation of the buildings, for the purposes of this subparagraph. The commission may make a determination that the valuation of the property is an amount different from such equalized assessed valuation where there is a request for a reduction in such assessed valuation currently pending; or where there has been a reduction in the assessed valuation for the year next preceding the effective date of the current assessed valuation in effect at the time of the filing of the application. Net annual return shall be the amount by which the earned income exceeds the operating expenses of the property, excluding mortgage interest and amortization, and excluding allowances for obsolescence and reserves, but including an allowance for depreciation of two per centum of the value of the buildings exclusive of the land, or the amount shown for depreciation of the buildings in the latest required federal income tax return, whichever is lower; provided, however, that no allowance for depreciation of the buildings shall be included where the buildings have been fully depreciated for federal income tax purposes or on the books of the owner; or (2) the landlord who owns no more than four rental units within the state has not been fully compensated by increases in rental income sufficient to offset unavoidable increases in property taxes, fuel, utilities, insurance and repairs and maintenance, excluding mortgage interest and amortization, and excluding allowances for depreciation, obsolescence and reserves, which have occurred since the federal date determining the maximum rent or the date the property was acquired by the present owner, whichever is later; or (3) the landlord operates a hotel or rooming house or owns a cooperative apartment and has not been fully compensated by increases in rental income from the controlled housing accommodations sufficient to offset unavoidable increases in property taxes and other costs as are allocable to such controlled housing accommodations, including costs of operation of such hotel or rooming house, but excluding mortgage interest and amortization, and excluding allowances for depreciation, obsolescence and reserves, which have occurred since the federal date determining the maximum rent or the date the landlord commenced the operation of the property, whichever is later; or (4) the landlord and tenant voluntarily enter into a valid written lease in good faith with respect to any housing accommodation, which lease provides for an increase in the maximum rent not in excess of fifteen per centum and for a term of not less than two years, except that where such lease provides for an increase in excess of fifteen per centum, the increase shall be automatically reduced to fifteen per centum; or (5) the landlord and tenant by mutual voluntary written agreement agree to a substantial increase or decrease in dwelling space or a change in the services, furniture, furnishings or equipment provided in the housing accommodations; provided that an owner shall be entitled to a rent increase where there has been a substantial modification or increase of dwelling space or an increase in the services, or installation of new equipment or improvements or new furniture or furnishings provided in or to a tenant's housing accommodation. The permanent increase in the maximum rent for the affected housing accommodation shall be one-fortieth of the total cost incurred by the landlord in providing such modification or increase in dwelling space, services, furniture, furnishings or equipment, including the cost of installation, but excluding finance charges provided further that an owner who is entitled to a rent increase pursuant to this clause shall not be entitled to a further rent increase based upon the installation of similar equipment, or new furniture or furnishings within the useful life of such new equipment, or new furniture or furnishings. The owner shall give written notice to the commission of any such adjustment pursuant to this clause; or (6) there has been, since March first, nineteen hundred fifty, an increase in the rental value of the housing accommodations as a result of a substantial rehabilitation of the building or housing accommodation therein which materially adds to the value of the property or appreciably prolongs its life, excluding ordinary repairs, maintenance and replacements; or (7) there has been since March first, nineteen hundred fifty, a major capital improvement required for the operation, preservation or maintenance of the structure; or (8) there has been since March first, nineteen hundred fifty, in structures containing more than four housing accommodations, other improvements made with the express consent of the tenants in occupancy of at least seventy-five per centum of the housing accommodations, provided, however, that no adjustment granted hereunder shall exceed fifteen per centum unless the tenants have agreed to a higher percentage of increase, as herein provided; or (9) there has been, since March first, nineteen hundred fifty, a subletting without written consent from the landlord or an increase in the number of adult occupants who are not members of the immediate family of the tenant, and the landlord has not been compensated therefor by adjustment of the maximum rent by lease or order of the commission or pursuant to the federal act; or (10) the presence of unique or peculiar circumstances materially affecting the maximum rent has resulted in a maximum rent which is substantially lower than the rents generally prevailing in the same area for substantially similar housing accommodations. In addition to the filing of written statements setting forth the final rate of equalization concerning assessment rolls of cities, towns and villages, after determination thereof by the state board of equalization and assessment, with the appropriate officials as now required by law, such board shall also file a copy of each such statement, duly certified, in so far as they relate to cities, towns and villages subject to rent control pursuant to this act, with the state rent administrator and the chairman of the temporary state commission to study rents and rental conditions. Where such board has made computations indicating a different ratio for subclasses of residential property, such information shall also be filed with such rent administrator and the chairman of such temporary state commission. (b) The total of all adjustments ordered by the commission pursuant to (1) and (3) of paragraph (a) of subdivision four hereof for any individual housing accommodations shall not exceed fifteen per centum for any twelve month period; provided, however, that in ordering an adjustment pursuant to (1), the commission may waive this limitation where a greater increase is necessary to make the earned income of the property equal to its operating expense; provided further, however, that the maximum rents subject to the allocation requirement of paragraph (c) hereof shall be increased by such further additional amount during each succeeding twelve-month period, not exceeding fifteen per centum of the maximum rent in effect on the effective date of the original order of adjustment, until the maximum rents for the property shall reflect the net annual return provided for pursuant to (1) hereof, but in no event, however, shall the total increase ordered for a succeeding twelve-month period be more than an additional three per centum of the maximum rent in effect on the effective date of the original order of adjustment unless a new application be filed by the landlord. The commission shall compile and make available for public inspection at reasonable hours at its principal office and at each appropriate local office, and shall file with the chairman of the temporary state commission to study rents and rental conditions the manual of accounting procedures and advisory bulletins applicable to applications under (1), (2) and (3) hereof, and all amendments thereto. (c) Any increase in maximum rent shall be apportioned equitably among all the controlled housing accommodations in the property. In making such apportionment and in fixing the increases in maximum rents the commission shall give due consideration (1) to all previous adjustments or increases in maximum rents by lease or otherwise; and (2) to all other income derived from the property, including income from space and accommodations not controlled, or the rental value thereof if vacant or occupied rent-free, so that there is allocated to the controlled housing accommodations therein only that portion of the amount of increase necessary pursuant to (1), (2) or (3) of paragraph (a) of subdivision four hereof, as is properly attributable to such controlled accommodations. (d) No landlord shall be entitled to any increase in the maximum rent unless he certifies that he is maintaining all essential services furnished or required to be furnished as of the date of the issuance of the order adjusting the maximum rent and that he will continue to maintain such services so long as the increase in such maximum rent continues in effect; nor shall any landlord be entitled to any increase in the maximum rent in any case where a municipal department having jurisdiction certifies that the housing accommodation is a fire hazard or is in a continued dangerous condition or detrimental to life or health, or is occupied in violation of law. (e) Before ordering any adjustment in maximum rents, a reasonable opportunity to be heard thereon shall be accorded the tenant and the landlord. 5. (a) Whenever in the judgment of the commission such action is necessary or proper in order to effectuate the purposes of this act, the commission may, by regulation or order, regulate or prohibit speculative or manipulative practices or renting or leasing practices, including practices relating to recovery of possession, which in the judgment of the commission are equivalent to or are likely to result in rent increases inconsistent with the purposes of this act. (b) Whenever in the judgment of the commission such action is necessary or proper in order to effectuate the purposes of this act, the commission may provide regulations to assure the maintenance of the same living space, essential services, furniture, furnishings and equipment as were provided on the date determining the maximum rent, and the commission shall have power by regulation or order to decrease the maximum rent for any housing accommodation with respect to which a maximum rent is in effect, pursuant to this act if it shall find that the living space, essential services, furniture, furnishings or equipment to which the tenant was entitled on such date has been decreased. (c) Whenever any municipal department having jurisdiction certifies that any housing accommodation is a fire hazard or is in a continued dangerous condition or detrimental to life or health, or is occupied in violation of law, the commission may issue an order decreasing the maximum rent of such housing accommodation in such amount as it deems necessary or proper, until the said municipal department has certified that the illegal or hazardous condition has been removed. 6. Any regulation or order issued pursuant to this section may be established in such form and manner, may contain such classifications and differentiations, and may provide for such adjustments and reasonable exceptions as in the judgment of the commission are necessary or proper in order to effectuate the purposes of this act. No increase or decrease in maximum rent shall be effective prior to the date on which the order therefor is issued. 7. Regulations, orders, and requirements under this act may contain such provisions as the commission deems necessary to prevent the circumvention or evasion thereof. 8. The powers granted in this section shall not be used or made to operate to compel changes in established rental practices, except where such action is affirmatively found by the commission to be necessary to prevent circumvention or evasion of any regulation, order, or requirements under this act.


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