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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 2522. Rent Adjustments
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
2522.8 Rent adjustments upon vacancy or succession
2522.9 Surcharge for the installation and use of washing machines, dryers and dishwashers
2522.10 Surcharges for submetered electricity or other utility service



9 NYCRR Part 2522 Notes

Statutory authority: N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a). Added Part 2522 on 5/01/87; added 2522.8 on 12/20/00; added 2522.9 on 12/20/00; added 2522.10 on 12/20/00.

9 NYCRR § 2522.1

§ 2522.1 Legal regulated rent adjustments

Legal regulated rents may be increased or decreased only as hereinafter specified.

Statutory authority:
N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added § 2522.1 on 5/01/87.

9 NYCRR § 2522.2

§ 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 on the effective date of a lease or other rental agreement providing for the rent guidelines board annual rate of adjustments, or upon vacancy or succession as provided in section 2522.8 of this Part. No rent adjustment may take place during a lease term unless a clause in the lease authorizes such increase, or as otherwise provided by law and this Code.

Statutory authority:
N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added § 2522.2 on 5/01/87; amended § 2522.2 on 12/20/00.

9 NYCRR § 2522.3

§ 2522.3   Fair Market Rent Appeal

(a) Except as provided in section 2521.1(a)(2) of this Title, an appeal of the initial 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. 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 Regulated 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. However, no fair market rent appeal may be filed after four years from the date the housing accommodation was no longer subject to the City Rent Law.

(b) The tenant must allege in such appeal:

(1) that the initial rent is in excess of the fair market rent; and

(2) facts which, to the best of his or her information and belief, support such allegation.

(c) Such appeal shall be dismissed where:

(1) 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; or

(2) the appeal is filed more than four years after the vacancy which caused the housing accommodation to no longer be subject to the City Rent Law.

(d)

(1) 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. In the absence of collusion between the present owner and any prior owner, where no records sufficient to establish the fair market rent were provided at a judicial sale, or such other sale effected in connection with, or to resolve, in whole or in part, a bankruptcy proceeding, mortgage foreclosure action or other judicial proceeding, an owner who purchases upon or subsequent to such sale shall not be liable for excess rent collected by any owner prior to such sale. An owner who did not purchase at such sale, but who purchased subsequent to such sale shall also not be liable for excess rent collected by any prior owner subsequent to such sale to the extent that such excess rent is the result of excess rent collected prior to such sale. 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.

(2) Court-appointed receivers. A receiver who is appointed by a court of competent jurisdiction to receive rent for the use or occupation of a housing accommodation shall not, in the absence of collusion or any relationship between such receiver and any owner or other receiver, be liable for excess rent collected by any owner or other receiver, where records sufficient to establish the fair market rent have not been made available to such receiver.

(e) In determining fair market rent appeals, filed pursuant to paragraph (a)(1) of this section, consideration shall be given to the applicable guidelines promulgated for such purposes by the Rent Guidelines Board and to rents generally prevailing for housing accommodations in buildings located in the same area as the housing accommodation involved. In addition, consideration of the rental history of the subject housing accommodation for the period prior to the four-year period preceding the filing of the fair market rent appeal is precluded. The rents for these comparable housing accommodations may be considered where such rents are:

(1) unchallenged rents in effect for housing accommodations subject to this Code on the date the tenant filing the appeal took occupancy; or

(2) at the owner's option, market rents in effect for other comparable housing accommodations on the date the tenant filing the appeal took occupancy, as submitted by the owner.

Statutory authority:
New York City Administrative Code, § 26-403, §§ 26-511(b), 26-518(a)
History:
Added § 2522.3 on 5/01/87; amended § 2522.3 on 12/20/00.

9 NYCRR§ 2522.4

§ 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, 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 on the following useful life schedule, except with DHCR approval of a waiver, as set forth in clause (e) of this subparagraph.

USEFUL LIFE SCHEDULE
FOR MAJOR CAPITAL IMPROVEMENTS

Replacement Item or Equipment     Years - Estimated Life

1) Boilers and Burners
   (a) Cast Iron Boiler.............................. 35
   (b) Package Boiler................................ 25
   (c) Steel Boiler.................................. 25
   (d) Burners....................................... 20

2) Windows
   (a) Aluminum...................................... 20
   (b) Wood.......................................... 25
   (c) Steel......................................... 25
   (d) Storm......................................... 20
   (e) Vinyl......................................... 15

3) Roofs
   (a) 2-Ply (asphalt)............................... 10
   (b) 3-4 Ply (asphalt)............................. 15
   (c) 5-Ply (asphalt)............................... 20
   (d) Shingle....................................... 20
   (e) Single-Ply Rubber............................. 20
   (f) Single-Ply Modified Bitumen................... 10
   (g) Quarry Tile................................... 20

4) Pointing.......................................... 15

5) Rewiring.......................................... 25

6) Intercom System................................... 15

7) Mailboxes......................................... 25

8) Plumbing/Repiping
   (a) Galvanized Steel.............................. 25
   (b) TP Copper..................................... 30
   (c) Brass cold water.............................. 15
   (d) Fixtures...................................... 25

9) Elevators
   (a) Major Upgrade................................. 25
   (b) Controllers and Selector...................... 25

10) Doors
   (a) Apartment Entrance............................ 25
   (b) Lobby/Vestibule............................... 15

11) Bathroom Upgrading
   (a) Toilets and Valves............................ 20
   (b) Bathroom and Sinks............................ 20
   (c) Vanity........................................ 20

12) Kitchen Upgrading
   (a) Metal/Wood Cabinets........................... 20
   (b) Ranges........................................ 20
   (c) Refrigerators................................. 15
   (d) Sinks......................................... 20

13) Water Tanks
   (a) Metal......................................... 25
   (b) Wood.......................................... 20

14) Waste Compactors................................. 10

15) Air Conditioners
   (a) Individual Units/Sleeves...................... 10
   (b) Central System................................ 15
   (c) Branch Circuitry Fixtures..................... 15

16) Aluminum Siding.................................. 25
    Vinyl Siding..................................... 15

17) Catwalk.......................................... 25

18) Chimney
    (a) Steel........................................ 25
    (b) Brick........................................ 25

19) Courtyards/Walkways/Driveways
    Cement........................................... 15
    Asphalt.......................................... 10

20) Fire Escapes..................................... 25

21) Fuel Oil Tanks
    (a) In Vaults.................................... 25
    (b) Underground.................................. 20

22) Water Heating Units
    (a) Hot Water/Central Heating.................... 20
    (b) Hot Water Heater (Domestic).................. 10

23) Parapets
    Brick............................................ 25

24) Resurfacing Exterior Walls....................... 25

25) Solar Heating System............................. 25

26) Structural Steel................................. 25

27) Television Security.............................. 10

For major capital improvements not listed above, the owner must submit with the application evidence that the useful life of the item or equipment being replaced has expired.

(e)

(1) An owner who wishes to request a waiver of the useful life requirement set forth in clause (d) of this subparagraph must apply to the DHCR for such waiver prior to the commencement of the work for which he or she will be seeking a major capital improvement rental increase. Notwithstanding this requirement, where the waiver requested is for an item being replaced because of an emergency, which causes the building or any part thereof to be dangerous to human life and safety or detrimental to health, an owner may apply to the DHCR for such waiver at the time he or she submits the major capital improvement rent increase application.

(2) If waiver is denied, the owner will not be eligible for an MCI increase. If it is granted, the useful life requirement will not be a factor in the determination of eligibility for the major capital improvement rent increase. However, approval of the waiver does not assure that the application will be granted, as all other requirements set forth in this paragraph must be met.

(3) An owner may apply for, and the DHCR may grant, a waiver of the useful life requirements set forth in the useful life schedule, if the owner satisfactorily demonstrates the existence of one or more of the following circumstances:

(i) The item or equipment cannot be repaired and must be replaced during its useful life because of a fire, vandalism or other emergency, or "act of God" resulting in an emergency.

(ii) The item or equipment needs to be replaced because such item or equipment is beyond repair, or spare parts are no longer available, or required repairs would cost more than 75 percent of the cost of the total replacement of the item or equipment. Certification by a duly licensed engineer or architect, where there is no common ownership or other financial interest with the owner, shall be considered substantial proof of such condition(s). The owner may also be required to submit proof that the item or equipment was properly maintained. Such proof may include receipts for repairs and parts or maintenance logs.

(iii)

(a) An appropriate New York State or local governmental agency has determined that the item or equipment needs to be replaced as part of a government housing program.

(b) For the owner to qualify for a New York State or local government long- term loan or insured loan, the governmental lender or insurer requires the remaining useful life of the building or building complex, as well as the component parts of such building or building complex, to be as great as or greater than the term of the loan agreement.

(iv) The replacement of an item or equipment which has proven inadequate, through no fault of the owner, is necessary, provided that there has been no major capital improvement rent increase for that item or equipment being replaced.

(4) In the event that the DHCR determines that an installation qualifies for a waiver of the useful life requirements, the DHCR may:

(i) where no previous increase was granted within the useful life of the item or equipment being replaced and the cost of repair would equal or exceed the cost of replacement, approve 100 percent of the substantiated cost of the item or equipment, including installation;

(ii) where no previous increase was granted within the useful life of the item or equipment being replaced and the cost of repair is more than 75 percent of the cost of replacement, grant a prorated increase based upon the remaining useful life;

(iii) where it is determined that an item is eligible to be replaced during its useful life, grant an increase based upon the difference between the substantiated cost of the item or equipment, including installation, and (a) the amount reimbursed from other sources, such as insurance proceeds or any other form of commercial guarantee, and (b) the amount of any increase previously granted for the same item or equipment either as a major capital improvement, or pursuant to other governmental programs, if such item or equipment has not exhausted at least 75 percent of its useful life at the time of the installation;

(iv) where it is determined that an item is eligible to be replaced even though it has not exhausted 75 percent of its useful life and that it was installed as part of a substantial rehabilitation or the new construction of a building for which the owner set initial building-wide rents, the DHCR may reduce the increase granted for a major capital improvement by a proportion of the remaining useful life of such item or equipment.

(5) Notwithstanding the provisions of subclause (4) of this clause, where an owner had substantially commenced work on the major capital improvement installation before February 1, 1991, based on prior DHCR decisions and policies, and where adherence to useful life requirements or to the conditions of the waiver would create an undue hardship, the owner's application will be determined in accordance with those prior decisions and policies.

(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 the grounds; 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) Improvements or installations for which the DHCR may grant applications for rent increases based upon major capital improvements pursuant to paragraph (2) of this subdivision are described on the following schedule. Other improvements or installations that are not included may also qualify, where all requirements of paragraph (2) of this subdivision have been met.

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; or any individual component or fixture if done building wide.

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, driveways and walkways -- 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, including new sinks, counter tops and cabinets in every housing accommodation; or any individual component or fixture if done building-wide.

17. Mailboxes -- new replacements and relocated from outer vestibule to an area behind locked doors to increase security.

18. Parapet -- complete replacement.

19. Pointing and waterproofing -- as necessary on exposed sides of the building.

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 sprinkler system (for fire control purposes) -- new installation(s).

30. Water tank -- new installation(s).

31. Windows -- new framed windows.

(4) The increase in the monthly stabilization rent for the affected housing accommodations when authorized pursuant to paragraph (1) of the subdivision shall be 1/40th of the total cost, including installation but excluding finance charges; and any increase pursuant to paragraph (2) of this subdivision shall be 1/84th 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) 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 paragraph (2) 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 paragraph (2) 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 paragraph (2) of this subdivision 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 paragraph (2) of 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 set 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 paragraph (2) of this subdivision be collected in the same year.

(9) An increase for an improvement made pursuant to paragraph (2) 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. however, where prior to the issuance of an order granting the increase, the funds taken from the reserve fund are returned to it by the sponsor or holder of unsold shares or units or through a special assessment of all shareholders or unit owners, the increase may be based upon the total cost of the improvement. 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 paragraph (2) 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 paragraph (2) 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 no 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.

(15) Where during the processing of a rent increase application filed pursuant to paragraph (2) of this subdivision, tenants interpose answers complaining of defective operation of the major capital improvement, the complaint may be resolved in the following manner:

(i) Where municipal sign-offs (other than building permits) are required for the approval of the installation, and the tenants' complaints relate to the subject matter of the sign-off, the complaints may be resolved on the basis of the sign-off, and the tenants referred to the approving governmental agency for whatever action such agency may deem appropriate.

(ii) Where municipal sign-offs are not required, or where the alleged defective operation of the major capital improvement does not relate to the subject matter of the sign-off, the complaint may be resolved by the affidavit of an independent licensed architect or engineer that the condition complained of was investigated and found not to have existed, or if found to have existed, was corrected. Such affidavit, which shall be served by the DHCR on the tenants, will raise a rebuttable presumption that the major capital improvement is properly operative. Tenants may rebut this presumption only on the basis of persuasive evidence, for example, a counter affidavit by an independent licensed architect or engineer, or an affirmation by 51 percent of the complaining tenants. Except for good cause shown, failure to rebut the presumption within 30 days will result in the issuance of an order without any further physical inspection of the premises by DHCR.

(iii) General requirements. There must be no common ownership, or other financial interest, between such architect or engineer and the owner or tenants. The affidavit shall state that there is no such relationship or other financial interest. The affidavit must also contain a statement that the architect or engineer did not engage in the performance of any work, other than the investigation, relating to the conditions that are the subject of the affidavit. The affidavit submitted must contain the original signature and professional stamp of the architect or engineer, not a copy. DHCR may conduct follow-up inspections randomly to ensure that the affidavits accurately indicate the condition of the premises. Any person or party who submits a false statement shall be subject to all penalties provided by law.

(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 1968; 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 similar increments and added to the legal regulated rent as established or set in future years.

(ii) If the building was previously granted a hardship increase, such increase must have become effective more than 36 months prior to the filing date of the application.

(iii) The owner has resolved all legal objections to any real estate taxes and water and sewer charges for the test period. However, if there is a pending certiorari proceeding relating to the real estate tax expense for the test period, an owner may be permitted to file a hardship application. In such cases, the amount of real estate tax expense that will be recognized for purposes of the test period will be based upon the amount of proposed assessed value set forth by the owner in the certiorari petition; provided, however, that the owner submits proof of actual payment of all taxes due on the owner's proposed assessed value, in accordance with applicable law. If after such tax objection is resolved, the owner's actual and reasonable tax expense allocable to the test period exceeds the amount the DHCR used in determining the hardship application, an additional increase may be granted prospectively by the DHCR in its discretion. The DHCR may also, in its discretion, accept reasonable alternatives as to unresolved water and sewer charges.

(iv) The DHCR shall not grant an owner an increase as provided, in whole or in part, if it is determined prior to the granting of approval to collect an increase pursuant to this subdivision that the owner is not maintaining all required services or 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, where the DHCR determines that insufficient income is the cause of such failure to maintain required services, hardship increases may be granted upon condition that such services will be restored within a reasonable time, and certain tenant- caused violations may be excepted.

(v) In buildings that also contain housing accommodations subject to the City Rent Law, appropriate adjustments for both income and expenses will be made by the DHCR in order to calculate the pro rata share for those housing accommodations subject to this application.

(vi) The DHCR shall set a rental value for any housing accommodation occupied by the owner or managing agent, a person related to, or an employee of the owner or managing agent, or unoccupied at the owner's choice for more than one month at the last legal regulated rent plus the minimum number of guidelines increases. If no such legal regulated rent existed or is known, the DHCR shall impute a rent equal to the average of rents for similar or comparable housing accommodations subject to this Code in the building during the test period.

(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 penalties of perjury.

(ix) The maximum amount of hardship increase to which an owner shall be entitled shall be the difference between the average annual net income for the three-year base period and the average annual net income for the three- year current period.

(4) 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.

(c) Alternative hardship.

As an alternative to the hardship application provided under subdivision (b) of this section, owners of buildings, not owned as cooperatives or condominiums, acquired by the same owner or a related entity owned by the same principals three years prior to the date of application, may apply to the DHCR, on forms prescribed by the DHCR, for increases in excess of the level of applicable guidelines increases established under the RSL, based on a finding by the DHCR that such guidelines increases are not sufficient to enable the owner to maintain an annual gross rent income collectible for such building which exceeds the annual operating expenses of such building by a sum equal to at least five percent of such annual gross rent income collectible, subject to the definitions and restrictions provided for herein.

(1) Definitions. The following terms shall mean:

(i) Annual gross rental income collectible shall consist of the actual income receivable per annum arising out of the operation and ownership of the property, including but not limited to rental from housing accommodations, stores, professional or business use, garages, parking spaces, and income from easements or air rights, washing machines, vending machines and signs, plus the rent calculated under subparagraph (2)(vi) of this subdivision. In ascertaining income receivable, the DHCR shall determine what efforts, if any, the owner has followed in collecting unpaid rent.

(ii) Operating expenses shall consist of the actual, reasonable costs of fuel, labor, utilities, taxes (other than income or corporate franchise taxes), fees (not including attorney's fees related to refinancing of the mortgage), permits, necessary contracted services and noncapital repairs for which an owner is not eligible for an increase pursuant to this Part, insurance, parts and supplies, reasonable management fees, mortgage interest, and other reasonable and necessary administrative costs applicable to the operation and maintenance of the property.

(iii) Mortgage interest shall be deemed to mean interest on that portion of the principal of an institutional or a bona fide mortgage, including an allocable portion of the charges related to the refinancing of the balance of an existing mortgage or a purchase-money mortgage. Criteria to be considered in determining a bona fide mortgage other than an institutional mortgage shall include, but shall not be limited to, the following: the condition of the property, the location of the property, the existing mortgage market at the time the mortgage is placed, the principal amount of the mortgage, the term of the mortgage, the amortization rate, security and other terms and conditions of the mortgage.

(iv) Institutional mortgage shall include a mortgage given to any insurance company, licensed by the State of New York or authorized to do business in the State of New York, or any commercial bank, trust company, savings bank or savings and loan association (which must be licensed under the laws of any jurisdiction within the United States and authorized to do business in the State of New York). The DHCR may determine in its discretion that any other mortgage issued by a duly licensed lending institution is an institutional mortgage.

(v) Owner's equity shall mean the sum of:

(a) the purchase price of the property less the principal of any mortgage or loan used to finance the purchase of the property;

(b) the cost of any capital improvement for which the owner has not collected an increase in rent less the principal of any mortgage or loan used to finance said improvement;

(c) any repayment of the principal of any mortgage or loan used to finance the purchase of the property or any capital improvement for which the owner has not collected an increase in rent; 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.

(vi) Threshold income shall mean that annual gross rental income collectible for such building which exceeds the annual operating expense for such building by a sum equal to five percent of such annual gross rental income collectible.

(vii) Test year shall mean any one of the following:

(a) the most recent calendar year (January 1st to December 31st); or

(b) the most recent fiscal year (one year ending on the last day of a month other than December 31st, provided that books of account are maintained and closed accordingly; or

(c) any 12 consecutive months ending within 90 days prior to the date of filing of the hardship application. Such period must end on the last day of a month. Nothing herein shall prevent the DHCR from comparing and adjusting expenses and income during the test year with expenses and income occurring during the three years prior to the date of application in order to determine the reasonableness of such expenses and income.

(2) Restrictions. No owner may file an application, nor may an owner be granted an increase in excess of the level of applicable guidelines increases, unless:

(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 similar increments and added to the legal regulated rent as established or set in future years;

(ii) if the building was previously granted a hardship increase, such increase must have become effective more than 36 months prior to the filing date of the application;

(iii) the owner has resolved all legal objections to any real estate taxes and water and sewer charges for the test year. However, if there is a pending certiorari proceeding relating to the real estate tax expense for the test year, an owner may be permitted to file a hardship application. In such cases, the amount of real estate tax expense that will be recognized for purposes of the test year will be based upon the amount of proposed assessed value set forth by the owner in the certiorari petition; provided, however, that the owner submits proof of actual payment of all taxes due on the proposed assessed value, in accordance with applicable law. If after such tax objection is resolved, the owner's actual and reasonable tax expense allocable to the test year exceeds the amount the DHCR used in determining the hardship application, an additional increase may be granted prospectively by the DHCR in its discretion. The DHCR may also, in its discretion, accept reasonable alternatives as to unresolved water and sewer charges;

(iv) the DHCR shall not grant an owner an increase as provided, in whole or in part, if it is determined prior to the granting of approval to collect an increase pursuant to this subdivision that the owner is not maintaining all required services or 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, where the DHCR determines that insufficient income is the cause of such failure to maintain required services, hardship increases may be granted upon condition that such services will be restored within a reasonable time, and certain tenant- caused violations may be excepted;

(v) in buildings that also contain housing accommodations subject to the City Rent Law, appropriate adjustments for both income and expenses will be made by the DHCR in order to calculate the pro rata share for those housing accommodations subject to this application;

(vi) the DHCR shall set a rental value for any housing accommodation occupied by the owner or managing agent, or a person related to, or an employee of the owner or managing agent, or unoccupied at the owner's choice for more than one month at the last regulated rent plus the minimum number of guidelines increases or, if no such regulated rent existed or is known, the DHCR shall impute a rent equal to the average of 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; or

(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.

Statutory authority:
New York City Administrative Code, § 26-509, § T11; Private Housing Finance Law, § A8-A, § 452, N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added 2522.4 on 5/01/87; amended 2522.4 (a)(2) opening paragraph on 12/20/00; repealed and added 2522.4 (a)(2)(i)(d) on 12/20/00; added 2522.4 (a)(2)(i)(e) on 12/20/00; amended 2522.4 (a)(2)(ii)(a) on 12/20/00; repealed and added 2522.4 (a)(3) on 12/20/00; amended 2522.4 (a)(4) on 12/20/00; amended 2522.4 (a)(7) on 12/20/00; amended 2522.4 (a)(8) on 12/20/00; amended 2522.4 (a)(9) on 12/20/00; amended 2522.4 (a)(10) on 12/20/00; amended 2522.4 (a)(12) on 12/20/00; added 2522.4 (a)(15) on 12/20/00; added 2522.4 (d)(3) on 12/20/00; relettered 2522.4 (d)(3) to be (4) on 12/20/00.

9 NYCRR § 2522.5

§ 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), (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.

(1) For leases entered into on or before June 15, 1997, 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:

(i) be in accordance with and at the guidelines rate of rent adjustment applicable to the new lease;

(ii) shall be computed upon the legal regulated rent charged and paid on the last day of the immediately preceding guidelines year; and

(iii) may include such other rent increases as are authorized pursuant to the RSL or this Code.

(2) For leases entered into after June 15, 1997, the rental provided in the new lease shall be in accordance with section 2522.8 of this Part. The length of the occupancy by the tenant vacating prior to the expiration of the lease term shall have no bearing on the availability of lawful rent increases.

(g) Same terms and conditions.

(1) 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.

(2) Where an owner has filed an owner's petition for decontrol (OPD) with the DHCR, as provided for in section 2531.3 of this Title, and the period during which the owner must offer a renewal lease pursuant to section 2523.5(a) of this Title has not expired, and the proceeding for decontrol is pending, the owner shall be permitted to attach a rider to the offered renewal lease, on a form prescribed or a facsimile of such form approved by the DHCR, containing a clause notifying the tenant that the offered renewal lease, if accepted, shall nevertheless no longer be in effect after 60 days from the issuance by the DHCR of an order of decontrol, or, in the event that a petition for administrative review (PAR) is filed against such order of decontrol, after 60 days from the issuance by the DHCR of an order dismissing or denying the PAR.

(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 tenant remains a rent-stabilized tenant.

(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.

Statutory authority:
New York City Administrative Code, § 26-509; General Business Law, § 352-EEEE; General Obligations, § 5-702; Real Property Tax Law, § 421-A, § 423, N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added § 2522.5 on 5/01/87; amended § 2522.5(d)(4) on 12/20/00; amended § 2522.5(f) on 12/20/00; amended 2522.5(g) on 12/20/00.

9 NYCRR § 2522.6

§ 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 the provisions of this Code. 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, or such other sale effected in connection with, or to resolve, in whole or in part, a bankruptcy proceeding, mortgage foreclosure action or other judicial proceeding, and no records sufficient to establish the legal regulated rent were made available to such purchaser, such orders shall establish the legal regulated rent on the date of the inception of the complaining tenant's tenancy, or the date four years prior to the date of the filing of an overcharge complaint pursuant to section 2526.1 of this Title, whichever is most recent, based on either:

(1) documented rents for comparable housing accommodations, whether or not subject to regulation pursuant to this Code, submitted by the owner, subject to rebuttal by the tenant; or

(2) if the documentation set forth in paragraph (1) of this subdivision is not available or is inappropriate, data compiled by the DHCR, using sampling methods determined by the DHCR, for regulated housing accommodations; or

(3) in the event that the information described in both paragraphs (1) and (2) of this subdivision is not available, the complaining tenant's rent reduced by the most recent guidelines adjustment.

This subdivision shall also apply where the owner purchases the housing accommodations subsequent to such judicial or other sale. Notwithstanding the foregoing, this subdivision shall not be deemed to impose any greater burden upon owners with regard to record keeping than is provided pursuant to RSL section 26-516(g). In addition, where the amount of rent set forth in the rent registration statement filed four years prior to the date the most recent registration statement was required to have been filed pursuant to Part 2528 of this Title is not challenged within four years of its filing, neither such rent nor service of any registration shall be subject to challenge any time thereafter.

Statutory authority:
New York City Administrative Code, § 26-516, N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added 2522.6 on 5/01/87; amended 2522.6 on 12/20/00.

9 NYCRR § 2522.7

§ 2522.7  Consideration of equities

In issuing any order adjusting or establishing any legal regulated rent, 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.

Statutory authority:
N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added § 2522.7 on 5/01/87; amended § 2522.7 on 12/20/00.

9 NYCRR § 2522.8

§ 2522.8  Rent adjustments upon vacancy or succession

(a) The legal regulated rent for any vacancy lease entered into after June 15, 1997 shall be as hereinafter provided in this subdivision. The previous legal regulated rent for such housing accommodation shall be increased by the following:

(1) if the vacancy lease is for a term of two years, 20 percent of the previous legal regulated rent; or

(2) if the vacancy lease is for a term of one year, the increase shall be 20 percent of the previous legal regulated rent less an amount equal to the difference between:

(i) the two year renewal lease guideline promulgated by the rent guidelines board applied to the previous legal regulated rent; and

(ii) the one year renewal lease guideline promulgated by the rent guidelines board applied to the previous legal regulated rent. In addition, if the legal regulated rent was not increased with respect to such housing accommodation by a permanent vacancy allowance within eight years prior to a vacancy lease executed on or after June 15, 1997, the legal regulated rent may be further increased by an amount equal to the product resulting from multiplying such previous legal regulated rent by six tenths of one percent and further multiplying the amount of rent increase resulting therefrom by the greater of:

(a) the number of years since the imposition of the last permanent vacancy allowance; or

(b) if the rent was not increased by a permanent vacancy allowance since the housing accommodation became subject to the RSL and this Code, the number of years that such housing accommodation has been subject to the RSL and this Code. Provided that if the previous legal regulated rent was less than $300, the total increase shall be as calculated above, plus $100 per month. Provided further, that if the previous legal regulated rent was at least $300 and no more than $500, in no event shall the total increase pursuant to this subdivision be less than $100 per month.

All such increases shall be in lieu of any allowance authorized for the one or two year renewal component of the guideline promulgated by the rent guidelines board, but shall be in addition to any other increases authorized pursuant to the RSL and this Code, including adjustments pursuant to section 2522.4(a) of this Part, and any applicable vacancy allowance authorized by the rent guidelines board.

(b) Any provision of this Code to the contrary notwithstanding, where all tenants named in a lease have permanently vacated a housing accommodation, and a primary-resident family member of such tenant or tenants (first successor) is entitled to and executes a renewal lease for the housing accommodation, as provided in section 2523.5 of this Title, and thereafter permanently vacates the housing accommodation, if such housing accommodation continues to be subject to the RSL and this Code after such first successor vacates, and a primary-resident family member (second successor) is entitled to and executes a renewal lease for the housing accommodation as provided in section 2523.5 of this Title, the legal regulated rent shall be increased by a sum equal to the allowance then in effect for vacancy leases, including the amount allowed by subdivision (a) of this section. Such increase shall be in addition to any other increases provided for in the RSL and this Code, including adjustments pursuant to section 2522.4(a) of this Part, and any applicable vacancy allowance authorized by the rent guidelines board, and shall be applicable in like manner to the renewal lease of each second subsequent succeeding family member.

Statutory authority:
N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added § 2522.8 on 12/20/00.

9 NYCRR § 2522.9

§2522.9   Surcharge for the installation and use of washing machines, dryers and dishwashers

(a) Where a tenant requests permission from the owner to install a washing machine, dryer or dishwasher, whether permanently installed or portable, and the owner consents, the owner may collect surcharges, without notification to or approval by the DHCR in an amount specified in an operational bulletin to be issued by the DHCR pursuant to section 2527.11(b) of this Title. The surcharges authorized by this section shall not be part of the legal regulated rent.

(b)

(1) Where a prior installation by a tenant of a washing machine, dryer or dishwasher comes to the attention of the owner and the owner consents to the continued use of the washing machine, dryer or dishwasher, the surcharges provided for in this section shall only be available prospectively.

(2) Under no circumstances shall servicing or replacement of such washing machine, dryer or dishwasher become a service required to be provided by the owner pursuant to this Code.

(3) Where there is in effect a prior practice of charging for installation of a tenant-owned washing machine, dryer or dishwasher, the owner may continue the charge, which may also continue to be included in the legal regulated rent, if such was the prior practice.

Statutory authority:
N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added § 2522.9 on 12/20/00.

9 NYCRR § 2522.10

§ 2522.10   Surcharges for submetered electricity or other utility service

Where an owner acts as a provider of a utility service (including, but not limited to electricity, gas, cable, or telecommunications), the owner may collect surcharges which shall not be part of the legal regulated rent, and shall not be subject to this Code.

Statutory authority:
N.Y.C. Administrative Code, §§ 26-511(b), 26-518(a)
History:
Added § 2522.10 on 12/20/00.

 

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