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TenantNet note: These Fact Sheets were published by CTRC in the mid-1990's. Some information will be out-of-date.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.

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

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.

CTRC Fact Sheet #102


Of the two rent regulatory laws governing private residential
housing in New York City, only the Rent Control Law, from its
initial enactment, required apartments under its jurisdiction to
be registered with a designated governmental agency. In contrast,
the Rent Stabilization Law, first enacted in 1968 and then re-
enacted in 1974 as the Emergency Tenant Protection Act (ETPA),
did not require registration of any of the units it administered.
Rather leases, lease renewals, rents, rent increases, services,
and repairs were "administered" by landlords themselves who were
merely required to enroll in the Rent Stabilization Association,
a landlord group charged with developing a code of regulations to
guide its members. Without any real enforcement, abuses became
rampant and rents skyrocketed. Tenants who attempted to assert
their rights were increasingly subject to harassment.

Omnibus Act of 1983

Disturbed by the economic disruption resulting from the wholesale
flouting of the Rent Stabilization Law, the state legislature
enacted a series of reforms designed to correct these abuses. The
Omnibus Act of 1983 transferred authority for the administration
of rent regulation to a state agency, the New York State Division
of Housing and Community Renewal (DHCR), and made the following
important revisions in the stabilization laws:

1.   Each housing accommodation (apartment) subject to the law
     had to be registered by the owner with the DHCR by July 1,
     1984, on forms prescribed by the Commissioner. The
     information on these forms would contain:

     o    the address of the building

     o    the name of the owner(s)

     o    the names of tenants in occupancy

     o    the number of units in the building and whether they
          are subject to Rent Control, Rent Stabilization, or are

     o    the rent charged for each unit on the registration date

     o    services provided to individual units

     o    building-wide services

     o    total number of rooms in the building

2.   Copies of the registration pertaining to the tenant's unit
     were to be mailed to the tenant in possession at the time of
     registration or to the first tenant in occupancy if the unit
     was vacant at the time. The tenant then had ninety days to
     challenge the information submitted (Form TC-1) and if no
     challenge was filed, the initial registered rent/services
     became the legal regulated rent/services and could not be
     challenged further.

3.   Apartments that became subject to the Rent Stabilization Law
     subsequent to the initial registration period (formerly rent
     controlled apartments) had to register within ninety days.
     The owners of these units could set a new "Fair Market Rent"
     which then became challengeable by the first stabilized
     tenant provided the tenant filed a timely appeal within
     ninety days of receiving, by certified mail, a copy of the
     initial registration Form (RR-1) filed by the landlord.

4.   An annual statement must be filed with the DHCR containing
     the current rent for each unit and other required
     information. A copy of the statement pertaining to the
     tenant's unit must be sent to each tenant in occupancy.

5.   The owner of the housing accommodation is required to pay an
     annual fee of ten dollars a year per unit.

6.   The owner must include a copy of the Rent Stabilization
     Rider with every new (vacancy) lease and with every lease
     renewal (DHCR Form RTP-8). The rider explains the rights and
     responsibilities of both landlord and tenant. When
     accompanying the vacancy lease, it indicates what the legal
     regulated rent was just prior to the vacancy and explains
     how the current rent was computed.

The 1983 law enforced the above provisions by prohibiting
landlords not in compliance with registration requirements from
collecting any rent increases. If collected, those increases
would be deemed willful overcharges subject to triple damages.
Tenants could recover up to four years of overcharges with a
maximum of two years at the triple rate. The burden of proving
that overcharges were not willful was placed on the landlord.

Furthermore, elimination of these sanctions would be prospective,
that is: penalties would be enforced and rent increases would be
allowable only from the time of compliance forward.

Rent Regulation Act of 1993

Extracted at the last minute from the NY State Legislature at the
price of extending the rent regulatory laws themselves, this act
has dealt a severe blow to rent stabilization. In addition to
installing "luxury" and "high income" decontrol (the first time a
means test has been applied to rent regulation in New York State)
the legislation has seriously weakened the rent registration
process at the core of the system.

The new amendments do not provide a penalty, aside from a trivial
fine (in most cases, five dollars), for the landlord who fails to
initially or annually register his apartments. Previously, all
rent increases were prohibited during this time of non-
registration, and if collected, they were deemed to be
overcharges. Now, other then the fact that the landlord has
failed to register the apartment, if the increases collected are
not in excess of lawfully permitted increases, they are not to be
considered overcharges. In addition the amendments were made
retroactive to July 1, 1991, so that tenant complaints of
overcharge based on non-registration alone, filed subsequent to
that date will be dismissed (complaints docketed on or before
that date, would remain unaffected).

These changes effectively remove any incentive for landlords to
comply with the registration requirements so crucial to the
effective administration of the rent regulatory laws and the
important economic and social needs they serve. The landlord may
now, almost with impunity, ignore the requirements for apartment
registration and only after a tenant has filed an official
complaint, be forced by the DHCR to register. Once again, the
burden of enforcing the law will fall squarely on tenants, who
historically, because of fear, intimidation, or lack of
familiarity with their rights, have filed very few overcharge


Rent in excess of the Legal Regulated Rent is an overcharge. The
Legal Regulated Rent as defined in the Rent Stabilization Law
Section 26-516(a)(i) is the rent recorded in the annual
registration statement filed four years prior to the most recent
registration statement (or, if more recently filed, the initial
registration statement) plus [in each case] any subsequent lawful
increases and adjustments. How then is the tenant to determine if
there is an overcharge?

1.   Long Term Tenants

These tenants were in occupancy either when the apartment was
initially registered or prior to the four year period mentioned
in the above definition, and therefore, the legal rent should be
known to them. Overcharges then, would most likely result from
other subsequent impermissible increases and adjustments. These
might include:

     o    Improper guideline increases

     o    More than one guideline increase within a specific
          lease term

     o    Rent increases without a properly executed lease

     o    A "Major Capital Improvement Rent Increase" not
          authorized by the DHCR

     o    Increases based on insupportable, inflated, or
          fraudulent costs claimed for apartment renovations or
          new equipment installation

     o    Unlawful fees (legal fees, late payment of rent fees,

     o    Increases in violation of a DHCR "order" reducing or
          freezing the rent

     o    Increases not allowable because of the landlord's
          failure to pay annual registration fees

2.   New Tenants

Most unlawful rents are imposed when a new tenant signs a vacancy
lease to a rent stabilized apartment. The tenant, probably
feeling fortunate that a rent regulated accommodation was found
at all, is, generally, either not inclined or not sufficiently
knowledgeable to question the legality of the rent being charged.
A rent stabilization rider, listing the previous legal rent and
how the current rent was computed must by law be provided to the
tenant along with the vacancy lease. The rider is almost never
attached to the vacancy lease that the new tenant receives.

The landlord can be forced to deliver the rider by the tenant
filing DHCR Form RA-90. If the information in the rider discloses
an enormous increased rent without justification or if it bases
the increase on extensive renovations which obviously have not
been carried out or, at least, not to the extent claimed, might
provide the basis for the tenant to initiate an overcharge

New tenants might also inquire among the "old time" tenants in
the building what renovations were completed, if any, and the
rent levels for other apartments in the same line or with
comparable characteristics and amenities. Large discrepancies in
rent should prompt the tenant to get an official computer
printout of the rent history of the apartment from the DHCR at
one of its borough offices. Since the DHCR considers this
information to be confidential, the tenant should bring some
proof of tenancy, e.g., a copy of the current lease, or the
information will be denied.

The DHCR rent history should contain, starting July 1984, the
initial legal regulated rent, all new or vacancy leases, lease
renewals, annual registrations and all rent increases and
adjustments. Considerable expertise in analyzing this information
is required, and the tenant is advised to consult with a
community housing organization or a qualified tenant attorney.

The Complaint Process

Tenants who wish to file an overcharge complaint with the DHCR
may do so on Form RA-89. The complaint should be filed in person
at any of its borough offices or at the main office at Gertz
Plaza in Jamaica, Queens. A time and date stamped copy of the
complaint should be kept as proof of filing. Alternatively,
tenants may file by certified mail with return receipt requested.
Within two weeks, the DHCR should respond by mail with a docket
form and number.

It is important to retain this docket number as it will be
necessary for all correspondence and submissions until the
ultimate resolution of the claim.

It can take two or three years before the DHCR reaches an initial
decision and issues a Rent Administrator's "Order". During this
process, tenants are advised to pay strict attention to all
correspondence from the agency and comply in a timely fashion to
all requests for additional information, especially in response
to landlord submissions that may raise new and/or false claims
such as: fictitious leases misrepresenting rents of previous
tenants, fictitious tenants, false or exaggerated renovation or
new equipment claims, and miscalculations of guideline increases,
vacancy allowances and supplemental increases. Even repeat
requests for material already submitted must be honored.

Tenants are often worn down by agency red tape and delay and
should be prepared to exercise patience and vigilance in pursuing
their claim. At all times tenants have the right to examine the
documents and registration materials in their complaint file. If
it becomes necessary to consult with a tenant advocate or tenant
attorney, the tenant will be familiar with all the official
documents and materials of the case.

Statute of Limitations

The Omnibus Act of 1983 provided for a severe penalty, i.e.,
triple damages, to landlords who willfully overcharged, but
unlike previous legislation, placed a limit on recovering
overcharges to a maximum of four years. The Act also provided,
unfortunately, two contrasting definitions of "legal regulated
rent" to be used in determining an overcharge. One definition is
"the initial legal regulated rent and any subsequent lawful
increases and adjustments" and the other is merely "the rent
indicated in the annual registration filed four years prior to
the most recent registration statement plus allowable increases
and adjustments since then".

The latter definition, which the DHCR has chosen to use, states
that if a rent remains unchallenged for more than four
consecutive annual registration periods then it becomes the legal
rent and can no longer be challenged. In affect, a four year
statute of limitations on filing an overcharge complaint is
established. The DHCR will dismiss any filing as being untimely
if the date of the alleged overcharge commenced four years prior
to the filing.

The use of this interpretation of "legal regulated rent" has
allowed for severe types of abuse. Landlords may unlawfully jump
the rent two or three hundred percent and because of apathy or
collusion on the part of the tenant, after a four-year period,
institutionalize an illegal rent. Worse, the landlord may falsely
register the apartment at, or close to, $2,000 per month, the
rental figure that triggers "luxury" decontrol, wait out the four
year period, and upon vacancy, permanently deregulate the

Critics point out that the Omnibus Act of 1983 has already
allowed the institutionalization of approximately 400,000
inflated rents because the rents remained unchallenged by tenants
after initial registration in 1984. Certainly, they argue, it
could not be the intention of the lawmakers to allow the further
establishment of illegal rents by unscrupulous landlords every
four years.

Recently, in Manhattan Housing Court, which has concurrent
jurisdiction with the DHCR in deciding rent stabilization
overcharge cases, Judge Howard Malatzky came to a similar
conclusion. In the case of Hart-Zafra v. Pilkes he commented that
although the Rent Stabilization Law and Code bar tenants from
collecting refunds or damages for overcharges that occurred more
than four years prior to the filing of a complaint, the court
could nonetheless inquire beyond the four-year period in
determining what the current legal rent should be. Judge Malatzky
rejected the landlords defense that the "four-year rule"
protected inquiry into an unexplained 250% jump in the rent and

     "in light of the fraud inherent in rent increases
     based on alleged renovations made to vacant
     apartments (or on consent of a prior tenant who
     has long since vacated), the court must rely on
     public policy considerations which underlie rent
     regulation... this court is of the opinion that
     each monthly payment of an unlawful rent...
     represents a continuing interference with a
     statutory right and the cause of action accrues on
     a continuing basis rather than at the time of the
     initial violation."

This is, of course, good news for tenants, but the decision is
not binding in other courts and jurisdictions and is currently
being appealed. Furthermore, the DHCR is not, as yet, under any
compulsion to change its procedure in determining overcharge
complaints. Tenants would be wise to consider the four-year rule
as an operating statute of limitations and act accordingly if
they plan to challenge, what they have reason to believe is, an
illegal rent.

Decision and Order

When the DHCR completes its processing of an overcharge complaint
it issues a Rent Administrator's order stating a finding of
denial or support of the claim. If in support, the DHCR sets a
reduced rent and provides a calculation of all overcharges,
including penalties and interest. However, while a reduced rent
is effective immediately, collecting an overcharge award must
await a possible appeal of the order. Any party aggrieved by the
order, in this case the landlord, has 35 days to appeal by filing
a Petition for Administrative Review (PAR) on DHCR Form RAR-2.
The petition must state the errors and issues to be considered
and present the facts and evidence which will comprise the scope
of the administrative review.

The DHCR will send a copy of the PAR to all affected parties
along with a response form, which in turn will be made available
to the other parties. Currently the DHCR has a backlog of PAR
cases and estimates are for up to two years or more before a
final determination can be expected. If the PAR is denied, the
petitioner (landlord) has 60 days to file an Article 78 in Civil
Court; if the landlord does not file, the tenant can proceed to
collect the overcharge award.

Collecting the Overcharge Award

If the review and appeals process has run its course and the
tenant has been awarded an overcharge amount, the tenant may use
one of two methods to collect it as provided by the NYC Rent
Stabilization Laws.

A.   Offset Method

The tenant may deduct 20% of the awarded amount from the monthly
rent until the total is paid. If 20% exceeds the monthly rent
then no rent is paid until the full amount of the award is

B.   Judgment Method

An eligible tenant should file the following form: Notice to Rent
Stabilized Tenant Concerning Payment of Penalties which Landlord
has been Directed to Pay by an Administrator's Order (DHCR Form
RN-14) along with the Judgment (DHCR Form RN-14).

Both are included with the overcharge order and should be sent

DHCR Docketing /Screening Section
Gertz Plaza
92-31 Union Hall Street
Jamaica, NY 11433

The DHCR will certify these documents and the tenant will sign an
affidavit that there has been no offset against the rent. These
forms and a certified copy of the overcharge order may be filed
with the County Clerk who will docket the judgment. If the
landlord does not satisfy the judgment, assets may be seized
and/or a lien placed against the landlord's property. All
overcharges, penalties and interest due are payable by the
current landlord even if some or most of the overcharges were
paid to a previous owner. The current landlord legally inherits
such responsibilities upon purchasing the property with the
exception of a property purchased at a judicial sale (a sale
pursuant to a New York State Supreme Court issuance of a
"Judgment of Foreclosure and Sale").

Overcharges vs. Fair Market Rent Appeal

When a rent stabilized apartment becomes vacant it normally
remains in the stabilization system (unless the apartment is in a
co-op or condo converted building or has rented for over $2,000
per month and becomes deregulated) and the next tenant signs a
vacancy lease with a new, higher rent determined by local rent
guideline increases and lawful adjustments.

A rent controlled apartment (not in a co-op or condo or renting
in excess of $2,000 or in a building of less than six units) upon
vacancy becomes decontrolled and enters the stabilization system
for the first time. The landlord must register the unit with the
DHCR by submitting the Initial Apartment Registration [DHCR Form
RR-1]. The landlord may charge the first stabilized tenant
whatever the market may bear. This rent is, usually at a time of
a chronic housing shortage, a huge multiple of the former rent
and is euphemistically referred to as the "Fair Market Rent".

The landlord must inform the tenant of this Initial Legal
Registered Rent on DHCR RR-1 form by certified mail within ninety
days of the tenant taking occupancy. The tenant then has ninety
days to challenge this first rent by filing a "Fair Market Rent
Appeal" (FMRA). This procedure is described on the back of the
notice and requires the filing of Tenant Challenge Form [DHCR
Form TC-1]. If the landlord fails to mail the RR-1 form, then the
ninety day restriction for challenges is removed and the tenant
may file a FMRA at any time during his tenancy.

The DHCR will consider the appeal and determine the rent based on
a number of factors, including:

o    The final Maximum Base Rent (MBR) under rent control

o    Rents in similar apartments with a similar history (apts. in
     the same line)

o    Rents in "comparable" apartments both in the building and in
     the neighborhood

o    Special fair market guideline increases issued annually by
     the Rent Guidelines Board

o    Guideline increases for new stabilization leases

A DHCR order either confirming or reducing the Fair Market Rent
will be issued. If lowered, it becomes the Adjusted Initial Legal
Registered Rent and any excess amount paid by the tenant must be
refunded. The Reform Act 1993 prohibits triple damage awards,
though they were rarely made, in any Fair Market Rent Appeal


The goal of rent regulatory laws to prevent "speculative,
unwarranted, and abnormal increases in rent" and to punish
"unjust, unreasonable, and disruptive practices" has been a
crucial factor in the "public interest" effort to preserve
affordable housing. In this long uphill battle, credit must be
given to the officials and staff of the DHCR, the Courts,
community housing organizations, tenant advocacy groups, and the
Legal Services and Legal Aid attorneys who take these laws
seriously and work together to protect the health, safety and
welfare of our communities.

Despite these efforts recent anti-tenant legislation and
dwindling government resources are having a negative impact on
tenants and communities.


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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