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"Overcharging" A Roommate -- Detailed Comments

Posted by consigliere on January 19, 2002 at 15:08:34:

First below is the section of the Rent Stabilization Code (RSC) about overcharging a roommate, which was finally adopted by DHCR on December 20, 2000.

Various tenant organizations are challenging DHCR's changes to the RSC in a case currently pending in New York State Supreme Court.

Second below are the comments submitted to DHCR by the attorneys for various tenant organizations.

Note that DHCR's original proposed amendment had much more severe language about the consequences of "overcharging" a roommate --

ORIGINAL PROPOSED AMENDMENT: The charging of a rental to such occupant that exceeds that amount shall be deemed to constitute profiteering in violation of section 2520.3 of this Title.

FINAL ADOPTED AMENDMENT: The charging of a rental amount to an occupant that exceeds that occupant's proportionate share shall be deemed to constitute a violation of this Code.

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Section 2525.7 Occupancy by persons other than tenant of record or tenant's immediate family.

(a) Housing accommodations subject to the RSL and this Code may be occupied in accordance with the provisions and subject to the limitations of section 235-f of the Real Property Law.

(b) The rental amount that a tenant may charge a person in occupancy pursuant to section 235-f of the Real Property Law shall not exceed such occupant's proportionate share of the legal regulated rent charged to and paid by the tenant for the subject housing accommodation.

For the purposes of this subdivision, an occupant's proportionate share shall be determined by dividing the legal regulated rent by the total number of tenants named on the lease and the total number of occupants residing in the subject housing accommodation. However, the total number of tenants named on the lease shall not include a tenant's spouse, and the total number of occupants shall not include a tenant's family member or an occupant's dependent child. Regardless of the number of occupants, tenants named on the lease shall remain responsible for payment to the owner of the entire legal regulated rent. The charging of a rental amount to an occupant that exceeds that occupant's proportionate share shall be deemed to constitute a violation of this Code.

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COMMENTS ON THE PROPOSED AMENDMENTS TO THE RENT STABILIZATION CODE, SUBMITTED ON BEHALF OF THE FOLLOWING ORGANIZATIONS:

LEGAL SUPPORT UNIT OF LEGAL SERVICES FOR NEW YORK CITY, METROPOLITAN COUNCIL ON HOUSING. MFY LEGAL SERVICES, NYS TENANTS AND NEIGHBORS COALITION, SOUTH BROOKLYN LEGAL SERVICES, THE LEGAL AID SOCIETY


IX. ROOMMATES

The proposed amendments create a new section of the Code, 2524.7, entitled "Occupancy by persons other than the tenant of record of tenant's immediate family." This section reiterates the right of tenants to have roommates pursuant to Real Property Law, 235-f. The section then goes on to state as follows:

The rental which a tenant may charge a person in occupancy pursuant to section 235-f shall not exceed such occupant's proportionate share of the legal regulated rent. . . The charging of a rental to such occupant that exceeds that amount shall be deemed to constitute profiteering in violation of section 2520.3 of this Title."

This proposed new section has no basis in the law. 235-f of the Real Property Law was enacted to protect the rights of tenants. The statute expressly makes it unlawful for landlords to restrict occupancy of residential premises to tenants and their families and further makes any lease which attempts such restriction to be void against public policy. RPL 235-f(2). In enacting this statute, the Legislature found that "unless corrective action is taken . . . thousands of households throughout this state composed of unrelated persons who live together for reasons of economy, safety and companionship may be placed in jeopardy." (L. 1983, ch. 403, 1). Thus, "it is undeniable that this section was passed to protect tenants and occupants, not landlords." Capitol Holding Co. v. Stravrolakes, 242 A.D.2d 240, 662 N.Y.S.2d 14 (lst Dept. 1997), affirmed 92 N.Y. 2d 1009, 684 N.Y.S.2d 477, 707 N.E.2d 432 (1998). Nothing in this statute provides a basis to inquire into the private decisions of roommates as to how to set the rent between them.

By contrast, the Rent Stabilization Law (RSL) specifically limits the amount of rent which a tenant may charge a sub-tenant. Thus, Section 26-511(c)(12) of the RSL provides that "the rental charged to the subtenant does not exceed the stabilized rent plus a ten percent surcharge payable to the tenant if the unit sublet was furnished with the tenant's furniture." The Legislature had the option of adopting limits on charges to roommates as well as subtenants, but it elected not to do so. The proposed amendment to the code is therefore wholly without authority.

The proposed amendment, moreover, would be devastating to many low-income tenants who rely on the income of roommates to retain their shelter and would result in the loss of housing for such low-income tenants. Numerous senior citizens, disabled persons or recipients of public assistance, whose income is less than the rent, can retain their homes only by having roommates and charging more than a proportional share of the rent. The decision of how to split the rent between roommates should be a private decision between the parties, which may be affected by numerous factors, such as the roommates' respective income, the size of their families, and the amount of space they each occupy, none of which are any business of their landlord.

It is, of course, ironic, that the tightened restrictions on overcharges by tenants have been adopted just as DHCR seeks to dramatically loosen the restrictions on charges by landlords. Like all of the new amendments, the roommate overcharge provisions clearly reveal DHCR's partiality to the real estate industry and its abdication of its role as a neutral arbiter of landlord-tenant disputes.

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