New York Rent Laws
Rent Stab Code (1987) - Table of Contents

NYC Rent Stabilization Code (1987)

Please note: This version of the NYC Rent Stabilziation Code is from 1987 and is not current. The code has been amended several times since 1987. Although much remains the same, there are significant changes that have occurred. This version of the code is maintained for archival purposes.

PART 2522 -- RENT ADJUSTMENTS ----------------------------- TABLE OF CONTENTS Section 2522.1. Legal regulated rent adjustments. 2522.2. Effective date of adjustment of legal regulated rents. 2522.3. Fair Market Rent Appeal. 2522.4. Adjustment of legal regulated rent. 2522.5. Lease agreements. 2522.6. Orders where the legal regulated rent or other facts are in dispute, in doubt, or not known, or where the legal regulated rent must be fixed. 2522.7. Consideration of equities. ----------------------------- Sec. 2522.1. LEGAL REGULATED RENT ADJUSTMENTS. Legal regulated rents may be increased or decreased only as hereinafter specified. Sec. 2522.2. EFFECTIVE DATE OF ADJUSTMENT OF LEGAL REGULATED RENTS. The legal regulated rent shall be adjusted effective the first rent payment date occurring 30 days after the filing of the application, unless otherwise set forth in the order, or as set forth in a Notice of Eligibility pursuant to section 2522.4(a)(3)(ii) of this Part, or on the effective date of a lease or other rental agreement providing for the Rent Guidelines Board annual rate of adjustments. No rent adjustment may take place during a lease term unless a clause in the lease authorizes such increase. Sec. 2522.3. FAIR MARKET RENT APPEAL. (a) Except as provided in section 2521.1(a)(2) of this Title, an appeal of the initial legal registered rent on the ground that it exceeds the fair market rent for the housing accommodation may be filed with the DHCR by the tenant of a housing accommodation which was subject to the City Rent Law on December 31, 1973. If the housing accommodation was registered in accordance with Part 2528 of this Title, this right is limited to the first tenant taking occupancy on or after April 1, 1984, except where such tenant had vacated the housing accommodation prior to the service by the owner of the Notice of initial Legal Registered Rent as required by section 2523.1 of this Title. In such event, any subsequent tenant in occupancy shall also have a right to file a Fair Market Rent Appeal until the owner mails the required notice and 90 days shall have elapsed without the filing of an appeal by a tenant continuing in occupancy during said 90-day period. Once a Fair Market Rent Appeal is filed, no subsequent tenant may file such appeal. Notwithstanding the above, where the first tenant taking occupancy after December 31, 1973, of a housing accommodation previously subject to the City Rent Law, was served with the notice required by section 26 of the former code of the Rent Stabilization Association of New York City, Inc., the time within which such tenant may file a Fair Market Rent Appeal is limited to 90 days after such notice was mailed to the tenant by the owner by certified mail. (b) The tenant need only allege in such appeal: (1) that the initial legal registered rent is in excess of the fair market rent; and (2) such facts which, to the best of his or her information and belief, support such allegation. (c) Such appeal shall be dismissed where: (1) the housing accommodation was subject to the City Rent Law prior to July 1, 1971, and the initial legal registered rent does not exceed the maximum rent as calculated pursuant to the City Rent Law for the period commencing January 1, 1974 and ending December 31, 1975, whether or not the housing accommodation was subject to the City Rent Law on that date, plus the appropriate guidelines allowance permissible for renewal leases pursuant to Guidelines Board Order No. 6 issued June 28, 1974 and effective July 1, 1974, and Order No. 6C issued February 7, 1975 and effective July 1, 1974, for any lease or other rental agreement commencing on or after January 1, 1974; or (2) the appeal is filed more than 90 days after the certified mailing to the tenant of the initial apartment registration, together with the notice pursuant to section 2523.1 of this Title. (d) The order shall direct the affected owner to make the refund of any excess rent to the tenant in cash, check or money order, and to the extent the present owner is liable for all or any part of the refund, such present owner may credit such refund against future rents over a period not in excess of six months. If the refund exceeds the total rent due for six months, the tenant at his or her option may continue to abate his or her rent until the refund is fully credited, or request the present owner to refund any balance outstanding at the end of such six-month period. (e) In determining Fair Market Rent Appeals, consideration shall be given to the applicable guidelines promulgated for such purposes by the Rent Guidelines Board and to rents generally prevailing for substantially similar housing accommodations in buildings located in the same area as the housing accommodation involved. The rents for these comparable housing accommodations may be considered where such rents are: (1) legal regulated rents, for which the time to file a Fair Market Rent Appeal has expired and no Fair Market Rent Appeal is then pending, or the Fair Market Rent Appeal has been finally determined, charged pursuant to a lease commencing within a four-year period prior to, or a one-year period subsequent to, the commencement date of the initial lease for the housing accommodation involved; and (2) at the owner's option, market rents in effect for other comparable housing accommodations on the date of the initial lease for the housing accommodation involved as submitted by the owner. (f) Where the rents of the comparable housing accommodations being considered are legal regulated rents, for which the time to file a Fair Market Rent Appeal has expired, and such rents are charged pursuant to a lease ending more than one year prior to the commencement date of the initial lease for the subject housing accommodation, such rents shall be updated by guidelines increases for one-year renewal leases, commencing with the expiration of the initial lease for the comparable housing accommodation to a date within 12 months prior to the renting of the housing accommodation involved Sec. 2522.4. ADJUSTMENT OF LEGAL REGULATED RENT. (a) INCREASED SPACE AND SERVICES, NEW EQUIPMENT, NEW FURNITURE OR FURNISHINGS; MAJOR CAPITAL IMPROVEMENTS; OTHER ADJUSTMENTS. (1) An owner is entitled to a rent increase where there has been a substantial increase, other than an increase for which an adjustment may be claimed pursuant to paragraph (2) of this subdivision, 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 the tenant's housing accommodation, on written tenant consent to the rent increase. In the case of vacant housing accommodations, tenant consent shall not be required. (2) An owner may file an application to increase the legal regulated rents of the building or building complex on forms prescribed by the DHCR, which the DHCR shall serve upon all affected tenants, on one or more of the following grounds: (i) There has been a major capital improvement, including an installation, which must meet all of the following criteria: (a) deemed depreciable under the Internal Revenue Code, other than for ordinary repairs; (b) is for the operation, preservation and maintenance of the structure; (c) is an improvement to the building or to the building complex which inures directly or indirectly to the benefit of all tenants, and which includes the same work performed in all similar components of the building or building complex, unless the owner can satisfactorily demonstrate to the DHCR that certain of such similar components did not require improvement; and (d) the item being replaced meets the requirements set forth in the useful life schedule, except with DHCR approval of a waiver. Pursuant to section 2527.11 of this Title, the DHCR shall issue a useful life schedule in accordance with manufacturing industry standards, which shall also set forth the conditions under which a useful life requirement may be waived. (ii) There has been other necessary work performed in connection with, and directly related to a major capital improvement, which may be included in the computation of an increase in the legal regulated rent only if such other necessary work was completed within a reasonable time after the completion of the major capital improvement to which it relates. Such other necessary work must: (a) improve, restore or preserve the quality of the structure; and (b) have been completed subsequent to, or contemporaneously with, the completion of the work for the major capital improvement. (iii) With approval by the DHCR, there has been an increase in services or improvement, other than repairs, on a building-wide basis, which the owner can demonstrate are necessary in order to comply with a specific requirement of law. (iv) With approval by the DHCR, there have been other improvements made or services provided to the building or building complex, other than those specified in subparagraphs (i)-(iii) of this paragraph, with the express consent of the tenants in occupancy of at least 75 percent of the housing accommodations. (3) An owner who files a complete application with the DHCR for an increase authorized pursuant to subparagraph (2)(i) of this subdivision which meets the requirements of such subparagraph may begin to collect such increase in the legal regulated rent prior to the issuance of an order granting the increase, provided that: (i) to be complete, such application must: (a) contain an itemized list of the work performed; (b) contain a certification of the cost of such work from the contractors, architect, certified public accountant, engineer or governmental agency; and that the item meets the requirements set forth in the useful life schedule, or a copy of a DHCR approval of a waiver of such useful life requirement is attached; (c) contain proof of payment for such work the cost of which is certified pursuant to clause (b) of this subparagraph; (d) contain the owner's sworn affidavit as to the completion of the installation or improvement in accordance with the itemization list and the certified costs, that all applicable governmental codes and regulations have been complied with, the installation or improvement has been properly performed in a workmanlike manner, and the truthfulness of all information submitted with the application; (e) contain copies of all necessary governmental agency approvals or self-certification by a duly licensed architect or engineer as may be permitted by such governmental agency; and (f) be for an improvement or installation of an item which is included on the following schedule, or such other improvement or installation to the building or building complex for the operation, preservation and maintenance of the structure as may be deemed necessary by the DHCR for the continued viability of the building as specified in an operational bulletin issued pursuant to section 2527.11 of this Title. ----------------------------- SCHEDULE OF MAJOR CAPITAL IMPROVEMENTS 1. Air conditioner--new central system; or individual units set in sleeves in the exterior wall of every housing accommodation; or, air conditioning circuits and outlets in each living room and/or bedroom (see Rewiring). 2. Aluminum siding--installed in a uniform manner on all exposed sides of the building (see Resurfacing). 3. Bathroom modernization--complete renovation, including new sinks, toilets, bathtubs and/or showers and all required trims in every housing accommodation. 4. Boiler and/or burner--new unit(s) including electrical work and additional components needed for the installation. 5. Boiler room--new room where none existed before; or enlargement of existing one to accommodate new boiler. 6. Catwalk--complete replacement. 7. Chimney--complete replacement, or new one where none existed before, including additional components needed for the installation. 8. Courtyard and walkways--concrete resurfacing of entire original area within the property lines of the premises. 9. Doors--new lobby front entrance and/or vestibule doors; or entrance to every housing accommodation, or fireproof doors for public hallways, basement, boiler room and roof bulkhead. 10. Elevator upgrading--including new controllers and selectors; or new electronic dispatch overlay system; or new elevator where none existed before, including additional components needed for the installation. 11. Fire escapes--complete new replacement, including new landings. 12. Gas heating units--new individual units with connecting pipes to every housing accommodation. 13. Hot water heater--new unit for central heating system. 14. Incinerator upgrading--including a new scrubber. 15. Intercom system--new replacement; or one where one existed before, with automatic door locks and push-button speaker boxes and/or telephone communication, including security locks on all entrances to the building. 16. Kitchen modernization--complete renovation, in eluding new sinks, counter tops and cabinets in every housing accommodation. 17. Mailboxes--new replacements and relocated from outer vestibule to an area behind locked doors to increase security. 18. Painting and waterproofing--as necessary on exposed sides of the building. 19. Parapet--complete replacement. 20. Repiping--new hot and/or cold water risers, returns, and branches to fixtures in every housing accommodation, including shower bodies, and/or new hot and/or new cold water overhead mains, with all necessary valves in basement. 21. Resurfacing of exterior walls--consisting of brick or masonry facing on entire area of all exposed sides of the building. 22. Rewiring--new copper risers and feeders extending from property box in basement to every housing accommodation; must be of sufficient capacity (220 volts) to accommodate the installation of air conditioner circuits in living room and/or bedroom. 23. Roof--complete replacement or roof cap on existing roof installed after thorough scraping and leveling as necessary. 24. Solar heating system--new central system, including additional components needed for the system. 25. Structural steel--complete new replacement of all beams including footing and foundation. 26. Television system--new security monitoring system, including additional components needed for the system. 27. Waste compactor--new installation(s) serving entire building. 28. Waste compactor room--new room where none existed before. 29. Water tank--new installation(s) serving entire building. 30. Windows--new aluminum framed windows. Wood framed windows allowed only for landmark buildings. ----------------------------- (ii) The owner or his or her representative has personally filed the completed application with the DHCR, the DHCR has served such application upon all affected tenants, the owner has thereafter received a Notice of Eligibility from the DHCR stating that the application is complete, and the DHCR has served such Notice of Eligibility upon such tenants. For the purposes of an application filed pursuant to this paragraph, the DHCR shall, within 90 days of such filing, fully review such application to insure completion pursuant to subparagraph (i) of this paragraph and shall conduct inspections where appropriate, and thereafter shall provide an owner with a Notice of Eligibility stating that the application is complete, and the effective date of the notice for the purposes of collecting the increase, or a notice of deficiency determining that the application is incomplete, and setting forth the grounds for such determination. A Notice of Eligibility shall be subject to a tenant challenge and subsequent audit by the DHCR. A tenant may file a challenge to the owner's eligibility to collect the rent increase within 60 days after the DHCR has served the tenant with a copy of the Notice of Eligibility by setting forth the grounds of his or her challenge in an answer filed with the DHCR. (iii) An owner, who on the effective date of this Code, has an application pending before the DHCR for an increase pursuant to subparagraph (2)(i) of this subdivision, may begin to collect such increase upon compliance with the procedure set forth in subparagraphs (i) and (ii) of this paragraph, provided that the retroactive collectibility of the increase shall be no earlier than the first rent payment date one year prior to the filing of an application completed pursuant to such subparagraphs (i) and (ii), and shall not be collected until the DHCR has issued an order granting the increase. (iv) An owner who is found by the DHCR to have knowingly filed a false affidavit pursuant to clause (i)(d) of this paragraph shall not be entitled to file any future application under this paragraph, and shall be denied the increase for which the owner submitted the application. Any increased rent shall be returned to the tenant and, in addition to any penalty contained in any other provision of law, the DHCR may also impose treble damages for the rent increase collected pursuant to the Notice of Eligibility described in subparagraph (ii) of this paragraph. (4) The increase in the monthly stabilization rent for the affected housing accommodations when authorized pursuant to paragraph (1) of the subdivision shall be l/40th of the total cost, including installation but excluding finance charges; and any increase pursuant to paragraphs (2) and (3) shall be 1/60th of the total cost, including installation but excluding finance charges as allocated in accordance with paragraph (12) of this subdivision. For increases pursuant to subparagraphs (2)(iii) and (iv) of this subdivision, in the discretion of the DHCR, an appropriate charge may be imposed in lieu of an amortization charge when an amortization charge is insignificant or inappropriate. (5) Such increases shall not be collectible during the term of a lease then in effect, unless a specific provision in the tenant's lease authorizes an increase during its term pursuant to an order issued by the DHCR, except that increases pursuant to paragraph (1) of this subdivision may be collected upon installation. (6) The determination of the appropriate adjustment of a legal regulated rent shall take into consideration all factors bearing on the equities involved, subject to the general limitation that the adjustment can be put into effect without dislocation and hardship inconsistent with the purposes of the RSL, and including as a factor a return of the actual cost to the owner, exclusive of interest or other carrying charges, and the increase in the rental value of the housing accommodations. (7) Except for applications made pursuant to paragraph (3) of this subdivision, an owner may apply for the DHCR's advisory prior opinion pursuant to section 2527.11 of this Title, as to whether the proposed work qualifies for an increase in the legal regulated rent. (8) No increase pursuant to paragraphs (2) and (3) of this subdivision shall be granted by the DHCR, unless an application is filed no later than two years after the completion of the installation or improvement unless the applicant can demonstrate that the application could not be made within two years due to delay, beyond the applicant's control, in obtaining required governmental approvals for which the applicant has applied within such two-year period. No increase pursuant to paragraphs (2) and (3) of this subdivision shall be granted within the useful life of an improvement or installation for which an increase was previously granted except with prior DHCR approval for required improvements. In addition, an increase pursuant to paragraphs (2) and (3) shall not be collectible from a tenant to whom there has been issued a currently valid senior citizen rent increase exemption pursuant to section 26-509 of the Administrative Code of the City of New York, to the extent such increase causes the legal regulated rent of the housing accommodation to exceed one third of the aggregate disposable income of all members of the household residing in the housing accommodation. The collection of any increase in the legal regulated rent for any housing accommodation pursuant to paragraphs (2) and (3) shall not exceed six percent in any year from the effective date of the Notice of Eligibility or of the order granting the increase over the rent set forth in the schedule of gross rents with collectibility of any dollar excess above said sum to be spread forward in similar increments and added to the legal regulated rent as established or set in future years. In no event shall more than one six- percent increase in the legal regulated rent pursuant to paragraphs (2) and (3) be collected in the same year for the permanent, prospective rent increase, and no more than an additional six-percent increase for the temporary retroactive portion of such rent increase. (9) An increase for an improvement made pursuant to paragraphs (2) and (3) of this subdivision shall not be granted by the DHCR to the extent that, after a plan for the conversion of a building to cooperative or condominium ownership is declared effective, such improvement is paid for out of the cash reserve fund of the cooperative corporation or condominium association. Nothing in this paragraph shall prevent an owner from applying for, and the DHCR from granting, an increase for such improvement to the extent that the cost thereof is otherwise paid for by an owner. (10) The DHCR shall not grant an application pursuant to this subdivision for an increase for any improvement made pursuant to paragraphs (2) and (3) of this subdivision to the extent that the cost of such improvement is paid for by an owner with funds received pursuant to a grant from any governmental agency or entity. A low interest loan or subsidy shall not be considered a grant for the purposes of this paragraph. Nothing in this paragraph shall prevent an owner from applying for, and the DHCR from granting, an increase for such improvement to the extent that the cost thereof is otherwise paid for by an owner. (11) An owner who is entitled to a rent increase based upon the installation of new equipment, or new furniture or furnishings pursuant to paragraph (1) of this subdivision 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. (12) Rent adjustments pursuant to paragraphs (2) and (3) of this subdivision and subdivisions (b) and (c) of this section shall be allocated as follows: The DHCR shall determine the dollar amount of the monthly rent adjustment. Such dollar amount shall be divided by the total number of rooms in the building. The amount so derived shall then be added to the rent chargeable to each housing accommodation in accordance with the number of rooms contained in such housing accommodation. (13) The DHCR shall not grant an owner's application for a rental adjustment pursuant to this subdivision, in whole or in part, if it is determined by the DHCR prior to the granting of approval to collect such adjustment that the owner is not maintaining all required services, or that there are current immediately hazardous violations of any municipal, county, State or Federal law which relate to the maintenance of such services. However, as determined by the DHCR, such application may be granted upon condition that such services will be restored within a reasonable time, and certain tenant-caused violations may be excepted. (14) In the case of an improvement constituting a moderate rehabilitation as defined in subdivision 2.1(6) of the Rules and Regulations Governing Tax Exemption and Tax Abatement pursuant to title 11 of the Administrative Code of the City of New York, an owner may elect that the total cost for such improvement be deemed to be the amount certified by the Tax Abatement/Tax Exemption Unit of HPD in the certificate of eligibility issued by such office with respect to such improvement. Such election shall be binding on the DHCR and shall waive any claim for a rent increase by reason of any difference between the total cash paid by the owner and such lesser certified amount. (b) COMPARATIVE HARDSHIP. (1) An owner may file an application on forms prescribed by the DHCR, and the DHCR shall grant, on the application of an owner, appropriate rent adjustments as hereinafter provided, where the gross rental income is insufficient to yield to the owner an average annual net income (which shall be computed without regard to debt service, financing costs or management fees), for the three-year period ending on or within six months of the date of the filing of the owner's application, equal to the annual average net income of the property for: (i) the period 1968-1970; or (ii) the first three years of operation, if the building was completed after 1 968; or (iii) the first three fiscal years after a transfer of title to a new owner who acquired title to the building as a result of a bona fide sale of the entire building, and who has been unable to obtain requisite records for the fiscal years between 1968 through 1970, despite diligent efforts to obtain the same from predecessors in title, provided that such new owner submits financial data for not less than six years of continuous and uninterrupted operation of the property under his or her ownership. (2) Notwithstanding anything to the contrary herein, no increase granted pursuant to this subdivision shall, when added to the annual gross rents as determined by the DHCR, exceed the sum of: (i) the annual operating expenses; (ii) an allowance for management services as determined by the DHCR; (iii) actual annual mortgage debt service (interest and amortization) on its indebtedness to a lending institution, an insurance company, a retirement fund or welfare fund under the supervision of the banking or insurance laws of the State of New York or the United States; and (iv) 8 1/2 percent of that portion of the fair market value of the property which exceeds the unpaid principal amount of the mortgage indebtedness referred to in subparagraph (iii) of this paragraph. Fair market value for this subparagraph shall be six times the annual gross rent. (3) Restrictions. (i) The collection of any increase in the legal regulated rent for any housing accommodation pursuant to this subdivision shall not exceed six percent in any year from the effective date of the order granting the increase over the rent set forth in the schedule of gross rents, with collectibility of any dollar excess above said sum to be spread forward in simila rents for similar or comparable housing accommodations subject to this Code in the building during the test year; (vii) each owner who files an application for a hardship rent increase shall be required to maintain all records as submitted with the subject application, and further be required to retain same for a period of three years after the effective date of the order; (viii)each application under this subdivision shall be certified by the owner or his or her duly authorized agent as to its accuracy and compliance with this subdivision, under the penalty of perjury; (ix) the annual gross rent income collectible for the test year does not exceed the annual operating expenses of such building by a sum equal to at least five percent of such annual gross rental income collectible; (x) the owner or a related entity owned by the same principals acquired the building at least 36 months prior to the date of application. A cooperative corporation or the board of managers of a condominium association shall not be considered the owner of the building, nor are individual shareholders or unit owners building owners for the purpose of eligibility for the alternative hardship, and as such are not permitted to file alternative hardship applications: (xi) the owner's equity in the building exceeds five percent of the sum of: (a) the arm's-length purchase price of the property; (b) the cost of any capital improvements for which the owner has not collected an increase in rent pursuant to paragraph (a)(2) of this section; (c) any repayment of principal of any mortgage or loan used to finance the purchase of the property or any capital improvements for which the owner has not obtained an adjustment in rent pursuant to paragraph (a)(2) of this section; and (d) any increase in the equalized assessed value of the property which occurred subsequent to the first valuation of the property after purchase by the owner; and (xii) the maximum amount of hardship increase to which an owner shall be entitled shall be the difference between the threshold income and the annual gross rent income collectible for the test year. (3) RIGHT OF TENANT TO CANCEL LEASE WHERE RENT INCREASE BASED UPON HARDSHIP IS GRANTED. In the event that an order is issued increasing the legal regulated rent because of owner hardship, the tenant may within 30 days of his or her receipt of a copy of the DHCR order, cancel his or her lease on 60 days' written notice to the owner. Until such tenant vacates, he or she continues in occupancy at the approved increase in rent. (d) An owner may file an application to decrease required services for a reduction of the legal regulated rent on forms prescribed by the DHCR on the grounds that: (1) the owner and tenant, by mutual voluntary written agreement, consent to a decrease in dwelling space, or a decrease in the services, furniture, furnishings or equipment provided in the housing accommodation; or (2) such decrease is required for the operation of the building in accordance with the specific requirements of law; or (3) such decrease is not inconsistent with the RSL or this Code. No such reduction in rent or decrease in services shall take place prior to the approval by the DHCR of the owner's application, except that a service decrease pursuant to paragraph (2) of this subdivision may take place prior to such approval. (e) An owner may file an application to modify or substitute required services, at no change in the legal regulated rent, on forms prescribed by the DHCR on the grounds that: (1) the owner and tenant, by mutual voluntary written agreement, consent to a modification or substitution of the required services provided in the housing accommodation; (2) such modification or substitution is required for the operation of the building in accordance with the specific requirements of law; or (3) such modification or substitution is not inconsistent with the RSL or this Code. No such modification or substitution of required services shall take place prior to the approval of the owner's application by the DHCR, except that a service modification or substitution pursuant to paragraph (2) of this subdivision may take place prior to such approval. (f) Pursuant to section 452(7) of the PHFL, as an alternative to the rental adjustments for which an owner may file an application under subdivision (a) of this section, upon the completion of the rehabilitation of a multiple dwelling which is aided by a loan made pursuant to article VIII-A of the PHFL, HPD may adjust the rent for each housing accommodation within the multiple dwelling pursuant to such law. Any work required pursuant to or as a condition of an article VIII-A loan for which a rent adjustment is granted under section 452(7) of the PHFL is not eligible for an increase pursuant to paragraph (a)(2) or (3) of this section. Sec. 2522.5. LEASE AGREEMENTS. (a) VACANCY LEASE OR RENTAL. (1) For housing accommodations other than hotels, upon the renting of a vacant housing accommodation, the owner shall provide to the tenant a copy of the fully executed lease for a one- or two-year term, at the tenant's option (except where a mortgage or mortgage commitment existing as of April 1, 1969 prohibits the granting of one-year lease terms), bearing the signature of the owner and tenant and the beginning and ending dates of the lease term, within 30 days from the owner's receipt of the vacancy lease signed by the tenant. Such lease shall conform to the intent of section 5-702 of the General Obligations Law (plain English). The rent provided therein may not exceed the last legal regulated rent in addition to all increases authorized by this Code. For a housing accommodation subject to the City Rent Law which becomes vacant after March 31, 1984, the owner may not increase the rent charged in the initial lease or other rental agreement pursuant to annual guidelines for a period of one year or until the expiration date of the initial lease or rental agreement, whichever is later. (2) For housing accommodations in hotels rented to an occupant who has never had a lease, such occupant may at any time during his or her occupancy request a lease and the owner must, within 15 days after such request, grant a lease commencing on the date such request was made at a rent which does not exceed the legal regulated rent, for a term of at least six months. The hotel occupant who requests such a lease becomes a permanent tenant but the lease need not be renewed. Notwithstanding the above, an owner shall not refuse to grant a lease or to extend or continue a tenancy in order to prevent the hotel occupant from becoming a permanent tenant, except to the extent that the owner may be permitted to do so by law pursuant to a warrant of eviction, or other order of a court of competent jurisdiction, or a governmental vacate order. (3) In addition, where a hotel occupant has not requested a lease, an owner shall not refuse to extend or continue a tenancy solely in order to prevent the hotel occupant from becoming a permanent tenant. (b) RENEWAL LEASE (1) For housing accommodations other than hotels, upon such notice as is required by section 2523.5 of this Title, the tenant shall have the right of selecting at his or her option a renewal of his or her lease for a one- or two-year term; except that where a mortgage or a mortgage commitment existing as of April 1, 1969 prohibits the granting of one-year lease terms or the tenant is the recipient of a Senior Citizen Rent Increase Exemption pursuant to section 26-509 of the Administrative Code of the City of New York, the tenant may not select a one-year lease. The owner shall furnish to the tenant signing a renewal lease form, pursuant to section 2523.5 of this Title, a copy of the fully executed renewal lease form, bearing the signatures of the owner and tenant, and the beginning and ending dates of the lease term, within 30 days from the owner's receipt of the renewal lease form signed by the tenant. Such renewal lease form shall conform to the intent of section 5-702 of the General Obligations Law. (2) Upon complaint by the tenant that he or she was not served with a copy of the fully executed vacancy lease or renewal lease form pursuant to paragraph (1) of subdivision (a) or paragraph (1) of this subdivision, the DHCR shall order the owner to furnish the copy of the vacancy lease or renewal lease form. In addition to any other penalties provided under this Code, noncompliance by the owner within 20 days of such order shall result in the denial of any rent guideline increases for vacancy or renewal leases until the fully executed copy of the vacancy lease or renewal lease form is furnished by the owner to the tenant. (c) LEASE RIDER AND NOTICE OF RIGHTS. (1) For housing accommodations subject to this Code, an owner shall furnish to each tenant signing a vacancy or renewal lease, a rider in a form promulgated or approved by the DHCR, in larger type than the lease, describing the rights and duties of owners and tenants as provided for under the RSL. Such rider shall conform to the plain English requirements of section 5-702 of the General Obligations Law, shall also be available in Spanish, and shall be attached as an addendum to the lease. Upon the face of each lease, in bold print, shall appear the following: "ATTACHED RIDER SETS FORTH RIGHTS AND OBLIGATIONS OF TENANTS AND LANDLORDS UNDER THE RENT STABILIZATION LAW." ("LOS DERECHOS Y RESPONSABILIDADES DE INQUILINOS Y CASEROS ESTAN DISPONIBLE EN ESPANOL"). (i) For vacancy leases, such rider shall in addition also include a notice of the prior legal regulated rent, if any, which was in effect immediately prior to the vacancy, an explanation of how the rental amount provided for in the vacancy lease has been computed above the amount shown in the most recent annual registration statement, and a statement that any increase above the amount set forth in such registration statement is in accordance with the adjustments permitted by the Rent Guidelines Board and this Code. (ii) For renewal leases, such rider shall be attached to the form sent to the tenant pursuant to section 2523.5 of this Title. (2) For housing accommodations in hotels, each owner shall furnish to each person, at the time of registration, a Notice of Rights in a form promulgated or approved by the DHCR, describing the rights and duties of hotel owners, occupants and tenants as provided for under the RSL and this Code and a hotel occupant's right to become a permanent tenant at a legal regulated rent by requesting a lease for a term of at least six months at any time during his or her occupancy. Such notice, which shall conform to the "plain English" requirements of section 5-702 of the General Obligations Law, shall also be available in Spanish. Such notice shall be provided to each hotel occupant in residence on the effective date of this Code no later than 90 days from such effective date. An owner who violates the RSL and this Code by failing to furnish this Notice of Rights, and/or by engaging in any conduct which compels a person to rent as a hotel occupant, prevents a hotel occupant from becoming a permanent tenant, or results in a hotel occupant vacating a housing accommodation, shall be subject to a loss of a guidelines adjustment pursuant to paragraph (3) of this subdivision as well as penalties pursuant to section 2526.2(b) and (c)(1) of this Title, and may be subject to a penalty pursuant to section 2526.2(c)(2) of this Title, in an amount no less than $1,000. (3) Upon complaint by the tenant, permanent tenant or hotel occupant that he or she was not furnished with a copy of the lease rider pursuant to paragraph (1) or the notice pursuant to paragraph (2) of this subdivision, the DHCR shall order the owner to furnish the rider or notice. In addition to such other penalties provided for pursuant to section 2526.2 of this Title, if the owner fails to comply within 20 days of such order, the owner shall not be entitled to collect any guidelines lease adjustment authorized for any current lease from the commencement date of such lease. The furnishing of the rider or notice by the owner to the tenant or hotel occupant shall result in the elimination, prospectively, of such penalty. With respect to housing accommodations in hotels, noncompliance by the owner shall not prevent the hotel occupant from becoming a permanent tenant. (d) LIMITATIONS. No provision may be made in any vacancy or renewal lease for adjustment of the legal regulated rent reserved in the lease except as follows: (1) if the applicable rent guidelines rate has not been fixed by the execution date of the vacancy lease or the renewal offer, the lease may make provision for the rent increase, if any, pursuant to the said rate when filed, to become effective as of the commencement date of the lease term, unless the Rent Guidelines Board shall have fixed a later effective date for the said rate, in which event the adjustment may only be effective as of the later date; (2) where such lease provides that the rental reserved therein may be increased pursuant to an order issued by the DHCR; or (3) where such lease provides that a rent increase shall be in the amount, if any, authorized by the DHCR in the rents for similar or comparable housing accommodations subject to this Code in the building during the test year; (vii) each owner who files an application for a hardship rent increase shall be required to maintain all records as submitted with the subject application, and further be required to retain same for a period of three years after the effective date of the order; (viii)each application under this subdivision shall be certified by the owner or his or her duly authorized agent as to its accuracy and compliance with this subdivision, under the penalty of perjury; (ix) the annual gross rent income collectible for the test year does not exceed the annual operating expenses of such building by a sum equal to at least five percent of such annual gross rental income collectible; (x) the owner or a related entity owned by the same principals acquired the building at least 36 months prior to the date of application. A cooperative corporation or the board of managers of a condominium association shall not be considered the owner of the building, nor are individual shareholders or unit owners building owners for the purpose of eligibility for the alternative hardship, and as such are not permitted to file alternative hardship applications: (xi) the owner's equity in the building exceeds five percent of the sum of: (a) the arm's-length purchase price of the property; (b) the cost of any capital improvements for which the owner has not collected an increase in rent pursuant to paragraph (a)(2) of this section; (c) any repayment of principal of any mortgage or loan used to finance the purchase of the property or any capital improvements for which the owner has not obtained an adjustment in rent pursuant to paragraph (a)(2) of this section; and (d) any increase in the equalized assessed value of the property which occurred subsequent to the first valuation of the property after purchase by the owner; and (xii) the maximum amount of hardship increase to which an owner shall be entitled shall be the difference between the threshold income and the annual gross rent income collectible for the test year. (3) RIGHT OF TENANT TO CANCEL LEASE WHERE RENT INCREASE BASED UPON HARDSHIP IS GRANTED. In the event that an order is issued increasing the legal regulated rent because of owner hardship, the tenant may within 30 days of his or her receipt of a copy of the DHCR order, cancel his or her lease on 60 days' written notice to the owner. Until such tenant vacates, he or she continues in occupancy at the approved increase in rent. (d) An owner may file an application to decrease required services for a reduction of the legal regulated rent on forms prescribed by the DHCR on the grounds that: (1) the owner and tenant, by mutual voluntary written agreement, consent to a decrease in dwelling space, or a decrease in the services, furniture, furnishings or equipment provided in the housing accommodation; or (2) such decrease is required for the operation of the building in accordance with the specific requirements of law; or (3) such decrease is not inconsistent with the RSL or this Code. No such reduction in rent or decrease in services shall take place prior to the approval by the DHCR of the owner's application, except that a service decrease pursuant to paragraph (2) of this subdivision may take place prior to such approval. (e) An owner may file an application to modify or substitute required services, at no change in the legal regulated rent, on forms prescribed by the DHCR on the grounds that: (1) the owner and tenant, by mutual voluntary written agreement, consent to a modification or substitution of the required services provided in the housing accommodation; (2) such modification or substitution is required for the operation of the building in accordance with the specific requirements of law; or (3) such modification or substitution is not inconsistent with the RSL or this Code. No such modification or substitution of required services shall take place prior to the approval of the owner's application by the DHCR, except that a service modification or substitution pursuant to paragraph (2) of this subdivision may take place prior to such approval. (f) Pursuant to section 452(7) of the PHFL, as an alternative to the rental adjustments for which an owner may file an application under subdivision (a) of this section, upon the completion of the rehabilitation of a multiple dwelling which is aided by a loan made pursuant to article VIII-A of the PHFL, HPD may adjust the rent for each housing accommodation within the multiple dwelling pursuant to such law. Any work required pursuant to or as a condition of an article VIII-A loan for which a rent adjustment is granted under section 452(7) of the PHFL is not eligible for an increase pursuant to paragraph (a)(2) or (3) of this section. Sec. 2522.5. LEASE AGREEMENTS. (a) VACANCY LEASE OR RENTAL. (1) For housing accommodations other than hotels, upon the renting of a vacant housing accommodation, the owner shall provide to the tenant a copy of the fully executed lease for a one- or two-year term, at the tenant's option (except where a mortgage or mortgage commitment existing as of April 1, 1969 prohibits the granting of one-year lease terms), bearing the signature of the owner and tenant and the beginning and ending dates of the lease term, within 30 days from the owner's receipt of the vacancy lease signed by the tenant. Such lease shall conform to the intent of section 5-702 of the General Obligations Law (plain English). The rent provided therein may not exceed the last legal regulated rent in addition to all increases authorized by this Code. For a housing accommodation subject to the City Rent Law which becomes vacant after March 31, 1984, the owner may not increase the rent charged in the initial lease or other rental agreement pursuant to annual guidelines for a period of one year or until the expiration date of the initial lease or rental agreement, whichever is later. (2) For housing accommodations in hotels rented to an occupant who has never had a lease, such occupant may at any time during his or her occupancy request a lease and the owner must, within 15 days after such request, grant a lease commencing on the date such request was made at a rent which does not exceed the legal regulated rent, for a term of at least six months. The hotel occupant who requests such a lease becomes a permanent tenant but the lease need not be renewed. Notwithstanding the above, an owner shall not refuse to grant a lease or to extend or continue a tenancy in order to prevent the hotel occupant from becoming a permanent tenant, except to the extent that the owner may be permitted to do so by law pursuant to a warrant of eviction, or other order of a court of competent jurisdiction, or a governmental vacate order. (3) In addition, where a hotel occupant has not requested a lease, an owner shall not refuse to extend or continue a tenancy solely in order to prevent the hotel occupant from becoming a permanent tenant. (b) RENEWAL LEASE (1) For housing accommodations other than hotels, upon such notice as is required by section 2523.5 of this Title, the tenant shall have the right of selecting at his or her option a renewal of his or her lease for a one- or two-year term; except that where a mortgage or a mortgage commitment existing as of April 1, 1969 prohibits the granting of one-year lease terms or the tenant is the recipient of a Senior Citizen Rent Increase Exemption pursuant to section 26-509 of the Administrative Code of the City of New York, the tenant may not select a one-year lease. The owner shall furnish to the tenant signing a renewal lease form, pursuant to section 2523.5 of this Title, a copy of the fully executed renewal lease form, bearing the signatures of the owner and tenant, and the beginning and ending dates of the lease term, within 30 days from the owner's receipt of the renewal lease form signed by the tenant. Such renewal lease form shall conform to the intent of section 5-702 of the General Obligations Law. (2) Upon complaint by the tenant that he or she was not served with a copy of the fully executed vacancy lease or renewal lease form pursuant to paragraph (1) of subdivision (a) or paragraph (1) of this subdivision, the DHCR shall order the owner to furnish the copy of the vacancy lease or renewal lease form. In addition to any other penalties provided under this Code, noncompliance by the owner within 20 days of such order shall result in the denial of any rent guideline increases for vacancy or renewal leases until the fully executed copy of the vacancy lease or renewal lease form is furnished by the owner to the tenant. (c) LEASE RIDER AND NOTICE OF RIGHTS. (1) For housing accommodations subject to this Code, an owner shall furnish to each tenant signing a vacancy or renewal lease, a rider in a form promulgated or approved by the DHCR, in larger type than the lease, describing the rights and duties of owners and tenants as provided for under the RSL. Such rider shall conform to the plain English requirements of section 5-702 of the General Obligations Law, shall also be available in Spanish, and shall be attached as an addendum to the lease. Upon the face of each lease, in bold print, shall appear the following: "ATTACHED RIDER SETS FORTH RIGHTS AND OBLIGATIONS OF TENANTS AND LANDLORDS UNDER THE RENT STABILIZATION LAW." ("LOS DERECHOS Y RESPONSABILIDADES DE INQUILINOS Y CASEROS ESTAN DISPONIBLE EN ESPANOL"). (i) For vacancy leases, such rider shall in addition also include a notice of the prior legal regulated rent, if any, which was in effect immediately prior to the vacancy, an explanation of how the rental amount provided for in the vacancy lease has been computed above the amount shown in the most recent annual registration statement, and a statement that any increase above the amount set forth in such registration statement is in accordance with the adjustments permitted by the Rent Guidelines Board and this Code. (ii) For renewal leases, such rider shall be attached to the form sent to the tenant pursuant to section 2523.5 of this Title. (2) For housing accommodations in hotels, each owner shall furnish to each person, at the time of registration, a Notice of Rights in a form promulgated or approved by the DHCR, describing the rights and duties of hotel owners, occupants and tenants as provided for under the RSL and this Code and a hotel occupant's right to become a permanent tenant at a legal regulated rent by requesting a lease for a term of at least six months at any time during his or her occupancy. Such notice, which shall conform to the "plain English" requirements of section 5-702 of the General Obligations Law, shall also be available in Spanish. Such notice shall be provided to each hotel occupant in residence on the effective date of this Code no later than 90 days from such effective date. An owner who violates the RSL and this Code by failing to furnish this Notice of Rights, and/or by engaging in any conduct which compels a person to rent as a hotel occupant, prevents a hotel occupant from becoming a permanent tenant, or results in a hotel occupant vacating a housing accommodation, shall be subject to a loss of a guidelines adjustment pursuant to paragraph (3) of this subdivision as well as penalties pursuant to section 2526.2(b) and (c)(1) of this Title, and may be subject to a penalty pursuant to section 2526.2(c)(2) of this Title, in an amount no less than $1,000. (3) Upon complaint by the tenant, permanent tenant or hotel occupant that he or she was not furnished with a copy of the lease rider pursuant to paragraph (1) or the notice pursuant to paragraph (2) of this subdivision, the DHCR shall order the owner to furnish the rider or notice. In addition to such other penalties provided for pursuant to section 2526.2 of this Title, if the owner fails to comply within 20 days of such order, the owner shall not be entitled to collect any guidelines lease adjustment authorized for any current lease from the commencement date of such lease. The furnishing of the rider or notice by the owner to the tenant or hotel occupant shall result in the elimination, prospectively, of such penalty. With respect to housing accommodations in hotels, noncompliance by the owner shall not prevent the hotel occupant from becoming a permanent tenant. (d) LIMITATIONS. No provision may be made in any vacancy or renewal lease for adjustment of the legal regulated rent reserved in the lease except as follows: (1) if the applicable rent guidelines rate has not been fixed by the execution date of the vacancy lease or the renewal offer, the lease may make provision for the rent increase, if any, pursuant to the said rate when filed, to become effective as of the commencement date of the lease term, unless the Rent Guidelines Board shall have fixed a later effective date for the said rate, in which event the adjustment may only be effective as of the later date; (2) where such lease provides that the rental reserved therein may be increased pursuant to an order issued by the DHCR; or (3) where such lease provides that a rent increase shall be in the amount, if any, authorized by the DHCR in the event an application is filed to establish a hardship pursuant to section 2522.4(b) or (c) of this Part; and (4) in the case of a vacancy lease, where an application for a rent adjustment pursuant to section 2522.4(a)(2) or (3), (b) or (c) of this Part is pending before the DHCR, such lease also recites that such application is pending before the DHCR and the basis for the adjustment, and that the increase which is the subject of such application, if granted, may be effective during the term of the lease. (e) ESCALATOR CLAUSES. (1) Regardless of whether an escalator clause was contained in the last effective lease or other rental agreement prior to April 1, 1984, no renewal lease or vacancy lease commencing on or after April 1, 1984 shall provide for any escalator clause, except that nothing herein shall prohibit the use of escalator clauses otherwise required by any other statute or regulation affecting the housing accommodation. (2) For buildings receiving benefits pursuant to section 421-a of the Real Property Tax Law and the regulations promulgated pursuant thereto, such clauses may provide for an annual or other periodic rent increase over the initial rent at an average rate of not more than 2.2 percent of the amount of such initial rent per annum not to exceed the maximum cumulative amount, if any, permitted under the 421-a program rules and regulations. After the tax benefits end, such additional 2.2 percent charges shall no longer be added but the owner may continue to collect the cumulative 2.2 percent increases charged prior to the termination of said tax benefits. Any lease containing the aforementioned provision shall also include a rider with an endorsement signed by the tenant acknowledging the owner's right to include such provision and to collect such rent increase for the tax benefit period. Such rider shall state the approximate date of the expiration of such tax benefits. (3) Nothing in paragraph (2) of this subdivision shall prohibit the inclusion of a lease provision for an annual or other periodic rent increase over the legal regulated rent at such rate of rental increase as is provided for and authorized by section 423 of the Real Property Tax Law. Such additional charges pursuant to such section 423 shall no longer be added after the tax benefits end. Any lease containing the aforementioned provision shall also include a rider with an endorsement signed by the tenant acknowledging the owner's right to include such provision and to collect such rent increase for the tax benefit period. Such rider shall state the approximate date of the expiration of such tax benefits. (4) No additional charge which became effective on or after November 19, 1982, pursuant to paragraph (2) of this subdivision, shall become part of the legal regulated rent. (f) VACANCY PRIOR TO EXPIRATION OF LEASE TERM. Where the tenant vacates prior to the expiration of the term of the lease, and the housing accommodation is rented to a new tenant pursuant to a lease commencing during the same guidelines period as the prior lease, the rental provided in the new lease shall: (1) be in accordance with and at the guidelines rate of rent adjustment applicable to the new lease; (2) shall be computed upon the legal regulated rent charged and paid on the last day of the immediately preceding guidelines year; and (3) may include such other rent increases as are authorized pursuant to section 2522.4 of this Part. (g) SAME TERMS AND CONDITIONS. The lease provided to the tenant by the owner pursuant to subdivision (b) of this section shall be on the same terms and conditions as the expired lease, except where the owner can demonstrate that the change is necessary in order to comply with a specific requirement of law or regulation applicable to the building or to leases for housing accommodations subject to the RSL, or with the approval of the DHCR. Nothing herein may limit the inclusion of authorized clauses otherwise permitted by this Code or by order of the DHCR not contained in the expiring lease. Notwithstanding the foregoing, the tenant shall have the right to have his or her spouse, whether husband or wife, added to the lease or any renewal thereof as an additional tenant where said spouse resides in the housing accommodation as his or her primary residence. (h) LEASES FOR HOUSING ACCOMMODATIONS IN COOPERATIVE - OR CONDOMINIUM-OWNED BUILDINGS, OR IN A BUILDING FOR WHICH THE ATTORNEY GENERAL HAS ACCEPTED FOR FILING A PLAN TO CONVERT THE BUILDING TO COOPERATIVE OR CONDOMINIUM OWNERSHIP. (1) An owner of one or more housing accommodations subject to this Code may evict the tenant of such housing accommodation and/or refuse to renew a lease therefor, if such housing accommodation is in a building, group of buildings or development which is the subject of an Eviction Plan for conversion to cooperative or condominium ownership under General Business Law, section 352-eeee (hereinafter "section 352-eeee"), provided: (i) the Attorney General has accepted for filing a plan to convert the building, group of buildings or development to cooperative or condominium ownership and an amendment declaring the plan effective as an Eviction Plan has been accepted for filing and a closing has been held thereunder; and (ii) three years have elapsed from the date on which the Attorney General has accepted for filing an amendment declaring the plan effective as an Eviction Plan, and at such time or thereafter the tenant's lease has expired or has been canceled pursuant to paragraph (2) of this subdivision. (2) Until the conditions set forth in paragraph (1) of this subdivision have been met, a tenant in occupancy of a housing accommodation subject to this Code shall have the right to a renewal lease or in the case of a permanent tenant, to continue his or her tenancy on the terms and conditions and at the rent and adjustments thereto as otherwise provided for in this Code. Notwithstanding the foregoing, any vacancy or renewal lease, entered into after the plan is accepted for filing by the Attorney General and such plan has been presented to the tenants in occupancy, may contain a provision authorizing the owner to cancel the lease as of a date not less than three years after the date an Eviction Plan has been declared effective (providing that title has passed to the cooperative corporation or condominium unit owners) on 90 days' notice to the tenant. In order to cancel a lease pursuant to such provision, the owner must give the tenant written notice of such election by certified mail no less than 90 days prior to the date upon which the cancellation is to become effective. (3) For the purposes of this section, "filing date" shall mean the date on which a letter was issued by the Attorney General accepting a plan for filing. (4) After the filing date, and prior to the plan being declared effective, if a housing accommodation subject to this Code is vacated, such housing accommodation may only be rented at a rent and upon such terms and conditions as are authorized under this Code for a vacancy lease. Notwithstanding the foregoing, if a vacancy lease herein called an interim lease for such housing accommodation is executed in connection with an agreement to purchase such housing accommodation or the shares allocated thereto, pursuant to any Eviction Plan or Non- Eviction Plan, as defined by section 352-eeee, such interim lease: (i) may provide that once the plan has been declared effective, if the tenant fails to purchase his or her housing accommodation or the shares allocated thereto on the terms set forth in the subscription or purchase agreement, or otherwise terminates or defaults on the subscription or purchase agreement, such tenant may be evicted; and (ii) may provide for a rental below the legal regulated rent which may, upon the abandonment or withdrawal of the plan, be increased to the legal regulated rent, provided the interim lease or other agreement clearly notifies the tenant of what that higher rental will be; If the plan is abandoned or withdrawn, such (5) If a housing accommodation which was subject to this Code is vacated or is rented to a new tenant after any plan which affects such housing accommodation has been declared effective, and a closing thereunder has occurred, such housing accommodation shall not be subject to this Code. (6) If a building, group of buildings or development containing units to which this Code applies is converted to cooperative or condominium ownership, whether or not such conversion is pursuant to an Eviction Plan or a Non- Eviction Plan as defined by section 352-eeee, the services which shall be required to be maintained under this Code with respect to housing accommodations which remain subject to this Code shall not be diminished or modified without the approval of the DHCR as provided for in section 2522.4(d) or (e) of this Part. (7) The provisions of paragraph (h)(1) of this section, and the right to include a cancellation clause as provided by paragraph (h)(2), shall not apply to a housing accommodation of which the tenant is a senior citizen or disabled person on the filing date. Until such time as the appropriate agency determines that such tenant is not eligible for such status, such tenant shall continue to be subject to the provisions of this Code. Sec. 2522.6. ORDERS WHERE THE LEGAL REGULATED RENT OR OTHER FACTS ARE IN DISPUTE, IN DOUBT, OR NOT KNOWN, OR WHERE THE LEGAL REGULATED RENT MUST BE FIXED. (a) Where the legal regulated rent or any fact necessary to the determination of the legal regulated rent, or the dwelling space, required services or equipment required to be provided with the housing accommodation is in dispute between the owner and the tenant, or is in doubt, or is not known, the DHCR at any time upon written request of either party, or on its own initiative, may issue an order in accordance with the applicable provisions of this Code determining the facts, including the legal regulated rent, the dwelling space, required services, and equipment required to be provided with the housing accommodations. (b) Such order shall determine such facts or establish the legal regulated rent in accordance with section 2521.2 of this Title. Where such order establishes the legal regulated rent, it shall contain a directive that all rent collected by the owner in excess of the legal regulated rent established under this section for such period as is provided in section 2526.1(a) of this Title, or the date of the commencement of the tenancy, if later, either be refunded to the tenant, or be enforced in the same manner as prescribed in section 2526.1(e) and (f) of this Title. Orders issued pursuant to this section shall be based upon the law and Code provisions in effect on March 31, 1984, if the complaint was filed prior to April 1, 1984. However, in the absence of collusion or any relationship between an owner and any prior owner, where such owner purchases the housing accommodations upon a judicial sale and no records sufficient to establish the legal regulated rent were made available to such purchaser, such orders shall establish the legal regulated rent with due consideration of equities pursuant to section 2522.7 of this Part. Sec. 2522.7. CONSIDERATION OF EQUITIES. In issuing any order adjusting or establishing any legal regulated rent, or in determining any applications by tenants pursuant to section 2523.5(f) of this Title, or in determining when a higher or lower legal regulated rent shall be charged pursuant to an agreement between the DHCR and governmental agencies or public benefit corporations, the DHCR shall take into consideration all factors bearing upon the equities involved, subject to the general limitation that such adjustment, establishment or determination can be put into effect with due regard for protecting tenants and the public interest against unreasonably high rent increases inconsistent with the purposes of the RSL, for preventing imposition upon the industry of any industry-wide schedule of rents or minimum rents, and for preserving the regulated rental housing stock.


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