CTRC Fact Sheet Index

TenantNet note: These Fact Sheets were published by CTRC in the mid-1990's. Some information will be out-of-date. As far as we know, there have been no updates to these fact sheets. While much of the information may still be valid, the reader should exercise caution.

CTRC Fact Sheets -- reproduced with permission.
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The Community Training Resource Center (CTRC) is a city-wide not-
for-profit organization that champions the rights of modest and
low-income tenants and promotes the preservation, improvement,
and expansion of affordable housing. CTRC provides training and
technical assistance for neighborhood housing groups, community
based organizations, legislative staffs and social service
providers.

CTRC produces fact sheets on tenants' rights, develops and
publishes research reports, and provides a written guide to New
York City government processes. CTRC advocates on budget policies
that affect housing and related services in low-income
neighborhoods. CTRC has led the campaign for the improvement and
expansion of the city's Housing Maintenance Code inspection and
enforcement services.
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CTRC Fact Sheet #101

HOW TENANTS CAN AVOID A NEW EQUIPMENT RENT INCREASE

In New York State all tenants are guaranteed, under Section 235-B
of the Real Property Law, certain basic services in exchange for
rent. The "Warranty of Habitability", as this section of the law
is called, makes it mandatory that each landlord, in every
written or oral lease, maintain the premises and common areas in
a condition that is (a) fit for human habitation, (b) free from
conditions endangering or detrimental to life, health, or safety
and (c) in accordance with required and agreed upon services.

Additionally, the Multiple Dwelling Laws, the Multiple Residence
Laws, the NYC Housing and Maintenance Code and other local codes
spell out in complex and comprehensive detail what landlords are
required to do to lawfully service and maintain their properties.


Rent Regulation and Services

In New York City, the cost of maintaining services in rent
controlled and rent stabilized apartments is included in the
rent. However, both regulatory systems allow for an increase in
rent for certain replacements that fall under the general
categories of new equipment, appliances, improvements, or
furnishings.

Such replacements can substitute for the repair of existing
equipment, especially in cases where the existing equipment is
either beyond repair or has outlived its useful life. Whether
there is a repair, a reconditioning, or a new replacement in an
apartment is the choice of the landlord; the tenant is only
obligated to pay a rent increase for a new replacement item, and
then only if he agrees to it. If a building wide system
replacement is made, the New York State Division of Housing and
Community Renewal (DHCR) has a procedure for processing the
landlord's claim for a rent increase.


Services, Generally

There can be confusion about a landlord's obligation
to provide certain services. "Services" in the Rent Control and
Rent Stabilization Laws are defined to include repairs, services,
and amenities. All must be maintained if they were provided as of
a certain "base date" as designated in those laws. Regulated
tenants may reasonably assume that the landlord is responsible
for all services.


Base Date -- Rent Control

The base date for services in New York City rent controlled
apartments is March 1, 1943.


Base Dates -- Rent Stabilization

There are two base dates for services for most apartments subject
to New York City rent stabilization: May 31, 1968 for apartments
that were stabilized on or before June 30, 1974 (post-1947
construction), and May 29, 1974 for apartments that became
stabilized on or after July 1, 1974 (older, pre-1947
construction).

Services for all regulated tenants, controlled or stabilized, are
divided into building-wide and apartment-specific services.


Building-wide Services for All Regulated Tenants

Building-wide services are those directly shared by all of a
building's tenants, such as heat and hot water, elevator service,
security (doorman, intercom, entrance door locks, mailboxes),
garbage disposal, hallway lighting and ventilation, etc.


Building-wide Systems Replacement

If the landlord replaces a major item of equipment or system
associated with building-wide services (plumbing, boiler and
burner, electrical wiring) and wants a rent increase, he must, as
previously indicated, file a Major Capital Improvement (MCI)
application with the DHCR. Only after processing and approval by
that agency may a rent increase be collected.

Tenants, however, have the right to challenge that rent increase
by providing reasonable grounds for the DHCR to re-consider its
decision.


Apartment-specific Services

Apartment-specific services are those that are provided within
each individual apartment and not directly shared by tenants of
other apartments. Some examples are: painting, ordinary repairs
to floors, walls, windows, doors, locks, plumbing, electrical
outlets, and appliances. The landlord is obligated to maintain
existing equipment in good working order which means "operable
for the uses any reasonable person might intend". For example, a
stove with an oven, broiler section, and four top burners, all
ignitable by pilot lights (if applicable), should function for
baking, broiling, frying, etc., with reasonable efficiency and
accuracy.

Apartment-specific new equipment replacements which may lead to
rent increases include stoves, refrigerators, dishwashers and air
conditioners where they are supplied by the landlord and are not
the property of the tenant. Other individual apartment equipment
items are kitchen cabinets, bathroom vanities, sinks, tubs,
related plumbing fixtures, and counter-tops.


New Equipment Rent Hikes -- Rent Control

The landlord and a rent controlled tenant can agree, in writing,
to install new equipment in an individual apartment (DHCR Form RA-
79b), and the rent will be increased by an amount approved by the
DHCR. Even if the tenant has not agreed in writing to an
increase, but has accepted the new equipment, the landlord may
apply to the DHCR and will probably be granted a rent increase.
The amount of that increase is determined by a DHCR schedule of
values, and becomes a permanent part of the Maximum Base
Rent(MBR).


New Equipment Rent Hikes -- Rent Stabilization

Landlords can raise the stabilized rent for installed apartment-
specific new equipment if either (1) the tenant in occupancy at
the time the new equipment is installed agrees to the increase in
writing, or (2) the landlord installs the equipment during a
vacancy. The amount of monthly rent increase allowed is one-
fortieth (2.5%) of the sum of the cost of the equipment plus
installation, if installation was performed by non-building
personnel. Finance costs related to the purchase of the equipment
may not be included in the rent increase. The landlord, unlike
under rent control, is not required to apply to DHCR for approval
of the rent increase which then becomes a permanent part of the
base rent.

The permanency of the rent increase and the lack of a requirement
for DHCR approval (both are loopholes in the law) entice
landlords to try to pass along the costs of normal repairs and
maintenance, costs that do not legally justify any rent increase.

By far the greatest abuse occurs when the landlord claims
extensive equipment replacement and/or renovations in an
apartment during a period of vacancy and then raises the rent,
almost astronomically, for the next tenant . The landlord may
claim that, in fact, he created an entirely new apartment and is
entitled to set a new market rent.

As for the latter claim, even substantial rehabilitation is
subject to the one-fortieth rule and does not justify a market
rent. In addition to new walls, floors, windows, and equipment,
unless the actual dimensions, size, and layout of the unit
(involving the redesign, shaping, and placement of the outside
walls) were changed, the apartment remains subject to the one-
fortieth rule in determining the rent and is not considered a new
apartment.

Since the DHCR does not red-flag sudden, large rent increases
reflected in vacancy leases, the burden falls on the new,
stabilized, tenant to file an overcharge complaint with the DHCR
if the tenant suspects the large increase to be unlawful.

Of course the tenant has to know that he is paying a large
increase over the previous rent in the first place. A rent
history is included in the Rent Stabilization Rider, an official
document spelling out tenants rights, that the tenant should
receive together with the vacancy lease. Most landlords ignore
this legal requirement. The tenant must take the trouble to force
the landlord to supply the rider, or get a rent history of the
apartment, and/or file an overcharge complaint with the DHCR. At
least this procedure will force the landlord to document the
nature, extent, and bonafide costs of the new equipment installed
and/or renovations made, upon which he has based the rent
increase.


To Avoid the Rent Increase

For rent stabilized tenants in occupancy, requests to the
landlord for equipment repairs may motivate the landlord to
pressure the tenant to pay a rent increase for a new replacement.
Many tenants believe they must submit to the demand if they wish
to have the service restored.

Knowing that some tenants are unaware of their rights, landlords
may typically refuse to repair old, broken equipment and insist
that the service can be restored only if the tenant agrees to new
equipment with a rent increase.

The rent regulatory laws, as previously stated, require the
maintenance of services; every tenant has the right to the
repair, or fully functional reconditioned replacement, of failed
or defective equipment, without a rent increase. If a landlord
demands an increase for new equipment, the tenant may lawfully
refuse to pay that increase. The tenant should continue to demand
a restoration of the service by repair or reconditioned
replacement. If the landlord insists on the increase, the tenant
should then file a complaint of service reduction with DHCR,
asking for a rent reduction and rent freeze. (Use DHCR Form RA-
81, and see our fact sheet, Rent Reductions for Lack of
Services.) Some landlords, facing a possible rent reduction and
freeze, might install a new equipment item and drop the demand
for a rent increase. The tenant may accept the landlord's new
item so long as there is written evidence that the tenant had
already refused to pay a rent increase for it.

A tenant cannot demand new equipment replacement and at the same
time refuse the landlord's demand for a rent increase. Also,
landlords are not obligated to give new replacements, not even if
the tenant offers to pay the "one-fortieth" rent increase.


Tenant Self-help

Sometimes, to avoid dealing with the landlord, a tenant might
replace or repair a broken item at his own expense. The tenant
will not then be able to get a rent reduction from the DHCR for
the landlord's failure to provide a service or repair. The DHCR
takes the position that if the tenant supplies the deleted
service, the landlord's obligation temporarily ceases.
Additionally, this method may encourage the landlord to withdraw
other services in the hope that the tenant will also replace
them.

New York State has no "repair and deduct" law that automatically
allows the tenant to recover the costs of doing what the landlord
fails to do. Nevertheless, the courts have generally allowed
tenants to deduct the cost of repairs in circumstances where the
tenant's expense was for restoring an essential service, such as
heat and hot water, and the landlord was given adequate notice of
the need to act but failed to do so. Whatever the circumstances,
tenants should seek expert advice before paying for costs that,
legally, are the landlord's responsibility.

Sometimes, extensive renovations may be undertaken within an
apartment with the permission of the tenant in occupancy. In such
situations the tenant should allow the work to be done only if
the landlord agrees in writing that the rent will not be
increased, or if the tenant negotiates an increase to his, the
tenant's, satisfaction. The tenant might also negotiate to get
reimbursed for expenses incurred during the course of the work.


Complaints to DHCR

Complaints of overcharge to the DHCR must be filed on their Form
RA-89. Also see our fact sheet, Overcharges Under NYC Rent
Stabilization. To challenge the cost of the installation of new
equipment, the tenant should state in the complaint that the rent
is in general above that allowed by law, and that one of the
reasons is that the landlord claims the installation of new
equipment. Many tenants sign a rider attached to their vacancy
lease conceding that new equipment was (or is being) installed.
If this was signed because the landlord insisted, with perhaps,
only superficial inspection of the apartment, the rider may be
challenged on the grounds that it was signed with no direct
knowledge of its claims.

In response to a tenant's overcharge complaint, the landlord must
submit evidence in the form of clearly itemized bills for the new
equipment and the apartment in which the equipment was installed.
He must also show proof of payment that corresponds with the
bills. Cash payments to contractors must be proven as well. All
landlord evidence should be scrutinized for inconsistencies,
omissions, and authenticity. Conventional repairs are not
eligible. If there is doubt about a item, it should be
challenged.

New equipment replacements are also ruled by DHCR's "useful life"
list that requires an item of equipment to have been used for a
minimum number of years before its replacement can be the basis
for a rent increase. Complaints should therefore request that the
landlord submit proof that the replaced equipment was, in fact,
beyond its useful life period.

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These article are Copyright 1995 and 1996 by Community Training Resource
Center (CTRC) and reproduced by TenantNet. They may be freely
redistributed in their entirety provided they are reproduced exactly
as in the originals, including this copyright notice, the opening and
closing informational banners and any references to either CTRC
or TenantNet must be included.

These article are provided as is without any express or implied
warranty. While any information in these article is believed to be
correct at the time of writing, these articles are for educational
purposes only and do not purport to provide legal advice. If
you require legal advice, you should consult with a legal
practitioner licensed to practice in your jurisdiction.

Community Training Resource Center                (212)964-7200
47 Ann Street
New York, NY 10038

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