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2520 Scope
2521 Legal Rents
2522 Rent Adjustments
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State of New York Codes, Rules and Regulations (NYCRR)
Title 9. Executive Department
Subtitle S. Division of Housing and Community Renewal
Chapter VIII. Rent Stabilization Regulations
Subchapter B. Rent Stabilization Code

Part 2521. Legal Registered and Regulated Rents
2521.1 Initial legal regulated rents for housing accommodations
2521.2 Preferential Rents
2521.3 Classification of buildings



9 NYCRR Part 2521 Notes

Statutory authority: N.Y.C. Administrative Code, 26-511(b), 26-518(a) Added Part 2521 on 5/01/87.

9 NYCRR 2521.1

2521.1  Initial legal regulated rents for housing accommodations

(a)

(1) For housing accommodations which on March 31, 1984 were subject to the City Rent Law, and became vacant after that date, and which are no longer subject to the City Rent Law, and are rented thereafter subject to the RSL, the initial legal regulated rent shall be the rent agreed to by the owner and the tenant and reserved in a lease or provided for in a rental agreement subject to the provisions of this Code, and subject to a tenant's right to a Fair Market Rent Appeal to adjust such rent pursuant to section 2522.3 of this Title.

(2) For housing accommodations which on March 31, 1984 were subject to the penalties provided in former section YY51-4.0 of the Administrative Code of the City of New York, and which become vacant thereafter, the initial legal regulated rent for the first rent stabilized tenant shall be the rent established by the DHCR for the prior tenant, increased by the guidelines rate of rent adjustments applicable to the new lease plus such other rent increases as are authorized pursuant to section 2522.4 of this Title, and shall not be subject to a Fair Market Rent Appeal pursuant to section 2522.3 of this Title.

(b)

(1) The initial legal regulated rent for a housing accommodation for which an overcharge complaint or a Fair Market Rent Appeal was filed by a tenant prior to April 1, 1984, and not finally determined prior thereto, shall be the April 1, 1984 rent as subsequently determined by the DHCR. Such determination will be based upon the law or code provision in effect on March 31, 1984.

(2) Upon determination of the initial legal regulated rent in paragraph (1) of this subdivision, legal regulated rents subsequent to April 1, 1984 shall be determined in accordance with section 2520.6(e) of this Title.

(c) The initial legal regulated rent for a housing accommodation first made subject to the RSL and this Code pursuant to article 7-C of the MDL shall be the rent established by the Loft Board under section 286(4) of the MDL applicable to a lease offered pursuant to MDL section 286(3). Such rent shall not be subject to the proceedings described in section 2522.3 of this Title. Notwithstanding that the rent charged and paid during the first lease term may have been less than such initial legal regulated rent, the owner may request that the next lease rental be the initial legal regulated rent plus the allowable increase established by the Rent Guidelines Board, and such other rent increases as are authorized pursuant to section 2522.4 of this Title.

(d) Notwithstanding the provisions of any outstanding lease or other rental agreement, the initial legal regulated rent for a housing accommodation in a multiple dwelling for which a loan is made under the PHFL shall be the initial rent established pursuant to such law. Such rent, whether or not the housing accommodation was previously subject to the RSL, shall not be subject to the proceeding described in section 2522.3 of this Title. Such rent for housing accommodations occupied prior to the granting of the loan made pursuant to the PHFL shall take effect on the date specified in the order establishing the rent. Notwithstanding any other provision of the RSL or this Code, the owner of such housing accommodation shall offer any tenant in occupancy on such effective date or upon initial occupancy a one- or two-year lease at the tenant's option at such rent, which offer shall be made as soon as practicable after such rent is established, whether or not the rent has taken or is then permitted to take effect; and refusal of such tenant to sign such lease, at such rent, and otherwise upon the same terms and conditions as the expiring lease, if any, shall constitute grounds for an action or proceeding to evict and recover possession of the housing accommodation; provided, however, that following the tenant's receipt of the offer of such lease at such rent as lawfully established, a tenant in occupancy on such date shall be allowed 30 days to sign such lease and, if during such 30-day period, such tenant gives the owner written notice of an intention to terminate such tenancy and pays the rent established pursuant to law for such month and for any extended period, the tenant shall not be required to surrender the housing accommodation until 60 days after receipt of such offer. Notwithstanding that the rent charged and paid during the first lease term may have been less than such initial legal regulated rent, the owner may request that the next lease rental be the initial legal regulated rent plus the allowable increase established by the Rent Guidelines Board.

(e) Notwithstanding any other provision of this Code, the initial legal regulated rent for a housing accommodation first made subject to the RSL and this Code pursuant to article XIV of the PHFL or section 2429 of article 8 of the Public Authorities Law shall be the rent established pursuant to law which reflects the improvements or rehabilitation and shall be subject to subsequent adjustment by the DHCR. Such rent shall not be subject to the proceedings described in section 2522.3 of this Title. Notwithstanding any other provision of the RSL or this Code: the owner of such housing accommodation shall offer a tenant in occupancy who first became subject to the RSL and this Code on the effective date of such rent a one- or two-year lease at the tenant's option at such rent, which offer shall be made as soon as practicable after such rent is effective; and refusal of such tenant to sign such lease at such rent, and otherwise upon the same terms and conditions as the expiring lease, if any, shall constitute grounds for an action or proceeding to evict and recover possession of the housing accommodation; provided, however, that following tenant's receipt of the offer of such lease at such rent, a tenant in occupancy on such effective date shall be allowed 30 days to sign such lease and, if during such 30-day period, such tenant gives the owner written notice of an intention to terminate such tenancy and pays the rent established pursuant to law while in occupancy, the tenant shall not be required to surrender the housing accommodation until 60 days after receipt of such offer. Notwithstanding that the rent charged and paid during the first lease term may have been less than such initial legal regulated rent, the owner may request that the next lease rental be the initial legal regulated rent plus the allowable increase established by the Rent Guidelines Board.

(f) If a housing accommodation is rehabilitated pursuant to either article XIV of the PHFL or section 2429 of article 8 of the Public Authorities Law, and article XV of the PHFL, the provisions in subdivision (d) of this section shall apply, rather than the provisions of subdivision (e), if HPD elects to establish rents for the housing accommodation pursuant to article XV of the PHFL.

(g) The initial legal regulated rent for a housing accommodation constructed pursuant to section 421-a of the Real Property Tax Law shall be the initial adjusted monthly rent charged and paid but not higher than the rent approved by HPD pursuant to such section for the housing accommodation or the lawful rent charged and paid on April 1, 1984, whichever is later.

(h) The initial legal regulated rent for housing accommodations subject this Code solely as a condition of receiving or continuing to receive benefits pursuant to section 11-243 (formerly J51-2.5) or 11-244 (formerly J51-5.0) of the Administrative Code, as amended, shall be the rent charged the initial rent-stabilized tenant or the lawful rent charged and paid on April 1, 1984, whichever is later, and shall not be subject to a Fair Market Rent Appeal pursuant to section 2522.3 of this Title. However, as to any housing accommodation which previously received tax benefits pursuant to section 11- 243 (formerly J51-2.5) or 11-244 (formerly J51-5.0), was not covered by the provisions of the RSL on June 18, 1985, and was made subject to such law by the provisions of chapters 288 and 289 of the Laws of New York for the year 1985 (as amended), the initial legal regulated rent shall be the rent charged and paid on May 30, 1985, or the maximum rent which could have been charged if the housing accommodation had been continuously subject to the RSL for the entire tenancy of the tenant in occupancy on May 30, 1985, whichever is greater.

(i) Notwithstanding the provisions of the RSL or any other provision of this Code, the initial legal regulated rent upon completion of the rehabilitation of a Class B multiple dwelling, Class A multiple dwelling used for single-room occupancy purposes, lodging house or a substantially vacant building intended to be used after rehabilitation for single-room occupancy purposes for which a loan is made for such rehabilitation on or after September 1, 1985, under article VIII or VIII-A of the PHFL, shall be the initial rent established by HPD pursuant to such law. Such rent, whether or not the housing accommodation was previously subject to the RSL, shall not be subject to the proceeding described in section 2522.3 of this Title. Such rent shall take effect on the date specified in the order establishing the rent. Notwithstanding the provisions of the RSL or any other provision of this Code, the owner of such housing accommodation shall offer any tenant in occupancy on such effective date a one- or two-year lease, at the tenant's option, at such rent, which offer shall be made as soon as practicable after such rent is established. Refusal of such tenant to sign such lease at such rent, and otherwise upon the same terms and conditions as the expiring lease, if any, shall constitute grounds for an action or proceeding to evict and recover possession of the housing accommodation; provided, however, that following the tenant's receipt of the offer of such lease at such rent as lawfully established, a tenant in occupancy on such date shall be allowed 30 days to sign such lease and, if during such 30-day period, such tenant gives the owner written notice of an intention to terminate such tenancy and pay the rent established pursuant to law for such month and for any extended period, the tenant shall not be required to surrender the housing accommodation until 60 days after receipt of such lease offer. Notwithstanding that the rent charged and paid during the first lease term may have been less than such initial legal regulated rent, the owner may request that the next lease rental be the initial legal regulated rent plus the allowable increase established by the Rent Guidelines Board, and such other rent increases as are authorized pursuant to section 2522.4 of this Title.

(j) For housing accommodations whose rentals were previously regulated under the PHFL, or any other State or Federal law, other than the RSL or the City Rent Law, upon the termination of such regulation, the initial legal regulated rent shall be the rent charged to and paid by the tenant in occupancy on the date such regulation ends. For housing accommodations which are vacant on the date the building first becomes subject to the RSL and this Code, such rent shall be the most recent rent approved by the supervising agency, which shall be subject to all increases permitted by law and this Code, and which shall not be subject to a Fair Market Rent Appeal pursuant to section 2522.3 of this Title.

(k) Notwithstanding any other provision of this Code, except as provided in paragraph (2) of this subdivision, governmental agencies or public benefit corporations may enter into an agreement with the DHCR, which shall be incorporated into an order of the DHCR, setting forth the conditions under which:

(1) projects receiving assistance or financing from such agencies may register higher and lower initial legal rents for units subject to occupancy and rent restrictions by such agencies, which rents may then be adjusted pursuant to the RSL and this Code, and shall not be subject to the proceedings described in section 2522.3 of this Title; or

(2) projects whose rentals were previously regulated under the PHFL or any other State or Federal law, other than the RSL or the City Rent Law, upon the date when such regulation ends, may register higher and lower initial legal rents for units which have been subject to occupancy and rent restrictions pursuant to such laws, which rents may then be adjusted pursuant to the RSL and this Code, and shall not be subject to the proceedings described in section 2522.3 of this Title. Where the DHCR was the agency regulating rentals pursuant to the PHFL, such terms and conditions shall be incorporated into an order of the DHCR.

Such agreement or order shall also set forth the conditions under which the higher and lower legal regulated rents may be charged, with due consideration of equities as set forth in section 2522.7 of this Title. No further agreements shall be entered into pursuant to this subdivision on or after January 1, 2000.

Statutory authority:
Multiple Dwelling, A7-C, 286; Public Authorities, 2429, A8; Private Housing Finance Law, A8, A8-A; New York City Administrative Code, 11-243, 11-244, 26-404; Private Housing Finance Law, A15; Real Property Tax Law, 421-A, N.Y.C. Administrative Code, 26-511(b), 26-518(a)
History:
Added § 2521.1 on 5/01/87; amended § 2521.1 on 12/20/00.

9 NYCRR 2521.2

2521.2  Preferential Rents

Where the legal regulated rent is established and documented in a manner prescribed by the DHCR, and a rent lower than such rent is charged and paid by the tenant, such lower rent shall be a preferential rent, which shall be subject to all adjustments provided by law and this Code. Upon vacancy of the tenant who pays a preferential rent, the legal regulated rent shall be the legal regulated rent previously established by record within four years prior thereto, plus all intervening guidelines increases, plus such other rent increases as are authorized by law and this Code.

Statutory authority:
N.Y.C. Administrative Code, 26-511(b), 26-518(a)
History:
Added § 2521.2 on 5/01/87; amended § 2521.2 on 12/20/00.

9 NYCRR 2521.3

2521.3  Classification of buildings

(a) Upon application by a tenant or owner, the DHCR shall issue an order determining a building's classification based upon the services provided and other relevant factors. Except as provided in subdivisions (c) and (d) of this section, if it is determined that such building is not a hotel, the DHCR shall classify the building as an apartment building unless the owner restores sufficient services to maintain a hotel classification in accordance with subdivision (b) of this section. If the building is reclassified, then the housing accommodations therein shall thereafter be subject to the provisions of this Code applicable to apartment buildings, at the legal regulated rent for each housing accommodation as determined by the order of the DHCR, plus lawful increases and adjustments allowed pursuant to this Code. In order for an owner to retain or continue the building's classification as a hotel, he or she must provide, in addition to any other services he or she is or was providing pursuant to section 2520.6(r) of this Title, all four of the following services:

(1) maid service, consisting of general housecleaning at a frequency of at least once a week;

(2) linen service, consisting of providing clean linens at a frequency of at least once a week;

(3) furniture and furnishings, including at a minimum a bed, lamps, storage facilities for clothing, chair and mirror in a bedroom; such furniture to be maintained by the hotel owner in reasonable condition; and

(4) lobby staffed 24 hours a day, seven days a week by at least one employee.

(b) A building's classification as a hotel will not be retained or continued where the DHCR determines that 51 percent of the permanent tenants are not receiving maid and linen service, except that all tenants receiving such services shall be entitled to receive the services for the duration of their occupancy. Where an owner is providing maid and linen service to 51 percent of the permanent tenants and the owner wishes to maintain the building's classification as a hotel, the owner shall be afforded 90 days to restore all four hotel services described above, without any additional rent increase for such services, to all of the building's permanent tenants, except that those tenants whose housing accommodations were rented to them as apartment (not hotel) housing accommodations shall have the option of rejecting restoration of hotel services and be subject to the RSL, pursuant to the provisions of this Code applicable to apartment buildings, until they vacate, at which time the owner shall be required to restore hotel services to the housing accommodations.

(c) Notwithstanding the provisions of subdivision (a) of this section, single-room occupancy facilities such as single-room occupancy hotels or rooming houses, as defined in the MDL, shall not be subject to reclassification pursuant to this section. However, such housing accommodations shall be included in the definition of hotel as set forth in section 2520.6(b) of this Title for all other purposes of this Code, except that the four minimum services enumerated in such section shall not be required to be provided unless such services were provided on the applicable base dates pursuant to section 2520.6(r)(4) of this Title.

(d) Notwithstanding the provisions of subdivision (a) of this section, the DHCR may decline to reclassify a hotel to apartment building status if it finds that the owner has reduced any of the four hotel services listed in such subdivision (a) for the purpose of reclassification of the building.

Statutory authority:
N.Y.C. Administrative Code, 26-511(b), 26-518(a)
History:
Added § 2521.3 on 5/01/87.

 

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