Date: Mon, 07 Jul 1997 12:55:53 -0400
Subject: DEMOCRAT PARTY WINS--TENANTS LOSE

    (see below for analysis of the new rent law)

        DEMOCRAT PARTY WINS -- TENANTS LOSE

Many tenants are still in a fog as the full impact of the
so-called "victory" is realized. We'll have more comments
later, but the effect of the Democratic "Sellout '97" can
best be summed up by Ken Rosenfield, a tenant member of
the Rent Guidelines Board, who stated on June 23:

  "If tenants have any more victories like this, there
   won't be any of us left to go to the funeral."

Landlords are dancing a jig; one group reportedly wants to
give Assembly Speaker Sheldon Silver the "Man of the Year"
Award for giving them so much. (see Real Estate Weekly,
June 25, 1997).

New York State Tenants & Neighbors Coalition (NYSTNC)
headed by Michael McKee and Billy Easton have for years
shoved other tenant groups and tenant leaders out of the
spotlight and out of the decision-making process. Two
sources told us that late on June 15th, NYSTNC was the
only "tenant group" allowed into Silver's office while
leaders of Met Council and QLOUT (Queens League of
United Tenants) had the door slammed in their face.

In 1994 one NYC Democratic assemblymember (whose district
is a mix of tenants, coops and home owners and who is only
so-so when it comes to tenant issues) told this writer
that tenants "will have a problem in 1997 if NYSTNC
still controlled the agenda," i.e., that the Democrat party
controlled the agenda and what was good for the party
is not necessarily good for tenants.

During the campaign McKee and Easton were quite public in
slamming other tenant efforts -- the upstate boycott, a
rent slowdown, Ruth Messinger's call for Home Rule, etc.
No matter what one thinks of the merits of these ideas,
(some were good, some needed further work and some
were pretty awful ideas) they represented concerned
tenants attempting to take the initiative -- ideas and
leadership are sorely needed by tenants. Indeed, it was the
local grassroots groups -- who printed and distributed flyers,
held meetings, demonstrated and lobbied legislators -- that
were the workhorse of the campaign.

When McKee/Easton complained that other tenants were undermining
"their" agenda, and when they trot out the party hacks in
defense (as I expect they will), you know something is wrong.
While other tenants wanted to work together (no matter what you
can say about their effectiveness), NYSTNC maintained the
appearance of open cooperation, but surreptitiously worked
to undermine much of the independent tenant efforts. When it
appeared that tenants might have had a chance to repeal
Vacancy Decontrol in the NYC City Council in March, it was
reported to us that it was NYSTNC that told City Councilman
Stanley Michaels it was "OK" to drop the effort ten days
before the vote -- resulting in a mere "clarification" by
Vallone. This failure by City Council to send a strong signal
to Albany -- along with tenant failure to either define the
debate on its terms or articulate well-accepted gut-level
reasons of the value of rent regulations -- are considered by
some prime reasons why the Democrats felt safe in giving away
so much of the store.

McKee/Easton were in the room. They had access to the party
leadership. We won't buy the explanation that the hellish
provisions of this law was "slipped by them" or that they
were "lied to." Every time that the laws are weakened, we
hear the same excuse. The only way the Democrats can maintain
the appearance of being pro-tenant while working to undermine
the tenant protection laws is to create a group like NYSTNC --
thereby controlling the agenda and other tenants.

         MCKEE/EASTON CLAIM VICTORY TO SAVE FACE
            WHEN THEY COULD NOT SAVE TENANTS

The only other group we've heard that is claiming "victory" is
the Communist Party -- most likely they feel the necessity to
struggle rather than win.

And what about "Showdown '97"? Well what about it? Although many
honest and concerned tenants got involved, it simply became
irrelevant -- because it was a creation of Shel Silver and
Housing Chair Vito Lopez and tenants were controlled.
You remember all those forums around town where the
do-nothing/we-love-tenants politicians gave their scripted
"set your sights on Pataki and Bruno" speeches?

We claimed that tenants should "watch" Silver as well -- either
box him in a corner or raise his expectations as a savior -- so
that he could not, and would not, sell tenants out... but whatever
it takes, watch him. No one did. Instead of Showdown '97, we got
Sellout '97

Who won what? Shel Silver enjoyed an immense public relations coup in
becoming a statewide household word. The Democratic Party (i.e.,
Gottfried, Abate, et al) maintained the fiction as working for tenants
rights while never raising a finger to actually clean up Housing Court
or DHCR. Vito Lopez made a deal with Guiliani along the same lines
as Antonio Pagan. Although wounded, Pataki is working hard to (and
probably will) recover his losses. D'Amato suffered little despite
efforts to make him the prime boogie man (Bruno already had that crown).

This writer has been asked on several occasions if McKee is actually
working for real estate. Although there's no direct evidence to support
this, when one critically looks at his and NYSTNC's historical record of
failures, you might just start to wonder. If you follow the money from
real estate to the Democratic Party coffers (you really didn't think
that the Republicans were the only beneficiary of real estate largess,
did you?), you can see how tenants and their issues have been co-opted.

What is wrong is that for years the party has controlled the agenda
and not tenants.

(we'll see how long it takes for them to call us radicals and extremists)

==================================================================

What follows is an early analysis of the impact of the new
"Rent Regulation Reform Act of 1997" by Andrew Scherer, Director of
New York Legal Services and also author of "Residential Landlord-
Tenant Law in New York" (a must-get book for serious advocates).

Advocates expect defacto Vacancy Decontrol to take place in the
next several years and as further analysis and litigation
proceeds, we'll see the full impact of the RRRA97.


ANDREW SCHERER
LEGAL SERVICES FOR NEW YORK CITY
212-431-7200
REVISED 6-27-97

SUMMARY OF THE RENT REGULATION REFORM ACT OF 1997

Extension of rent regulation:

The Rent Regulation Reform Act of 1997 (the “Act”) extends the
Emergency Tenant Protection Act of 1974 (ETPA) and the Emergency
Housing Rent Control Law (EHRCL) for six years; i.e., until June
15, 2003. The Act also extensively amends these and a number of
other housing statutes.

The ETPA, which was enacted by the State Legislature in 1974,
enables localities in New York State to provide rent
stabilization coverage for housing in buildings that were built
prior to January 1, 1974. In New York City, housing that has six
dwelling units or more and was built before January 1, 1974 is
presumptively subject to rent stabilization, although housing
that is owned or operated by a government entity or, in some
instances, by a charitable institution, is exempt from rent
stabilization. There are approximately 1.1 million households
subject to rent stabilization in New York City. About three dozen
communities in Westchester, Nassau and Rockland counties have
opted in to some form of rent stabilization. The EHRCL provides
rent control coverage to tenants in certain localities outside
New York City.

High rent/ high income deregulation:

Sections 7-17 of the Act change the law with respect to high
rent/ high income deregulation (also often called luxury
decontrol). The deregulation provisions of the Act apply to all
forms of rent regulation, including rent control in New York City
(which was not scheduled to expire on June 15, 1997).

Vacant apartments:

Any apartment with a monthly rental of two thousand dollars a
month or more after the effective date of the Act becomes
deregulated when it becomes vacant. Under Section 46 of the Act,
these provisions apply to apartments that become vacant on or
after the effective date of the Act. (June 20, 1997?) Apartments
that were vacant prior to the effective date of the Act are
subject to the law that was in effect on the date the apartment
became vacant.

Occupied apartments:

Any apartment with a monthly rental of two thousand dollars a
month or more after the effective date of the Act becomes
deregulated if the tenant’s household income exceeds one hundred
seventy five thousand dollars per year for two consecutive
calendar years. A tenant in a unit that becomes deregulated in
this manner must be offered a rent “not in excess of the market
rent,” which is defined as “rent obtainable in an arm’s length
transaction. Under Section 46 of the Act, these provisions take
effect on January 1, 1998.

comment: The “market rent” offer must be made on ten days written
notice sent to the tenant by certified and regular mail. This is
a very short period of time (especially for rent controlled
tenants who have generally been in their homes since 1971). It is
also not clear how disputes as to whether the offer is in fact
“market rent” is to be resolved. Will DHCR continue to have
jurisdiction over these units?

Vacancy increases for rent stabilized units:

Prior to the Act, vacancy rent increases that could be imposed in
rent stabilized housing units were set on an annual basis by the
New York City Rent Guidelines Board (RGB). Sections 18-20 of the
Act remove that function from the RGB and substitutes a complex
statutory formula. If a vacant apartment is rented for a two year
lease, the landlord can charge a 20% vacancy increase. If a
vacant apartment is rented for a one year lease, the landlord may
charge a 20% increase minus “the difference between (a) the two
year renewal lease guideline promulgated by the guideline board
of the City of New York applied to the previous legal regulated
rent and (b) the one year renewal lease . . .” In addition, if
the landlord did not obtain a vacancy allowance within the last
eight years, he or she can collect a .6% increase for each year
since the last vacancy allowance or since the unit became subject
to rent stabilization. In addition, the landlord can collect an
extra $100 rent increase on top of the above increase if the last
legal regulated rent for the apartment before the vacancy was
less than $300 per month, and if the apartment rented for between
$300 and $500, the landlord can collect a minimum increase of
$100 per month. DHCR is supposed to set up a procedure for
determining what vacancy allowance a landlord is entitled to.
Pursuant to Section 46 of the Act, these provisions are deemed to
have been in effect on and after June 15, 1997.

comment: In addition to being complex to the point of absurdity,
this new provision virtually guarantees that there will be
absolutely no available housing for people with household income
that is at or below poverty level -- some 24% of the population
of New York City.

Succession rights:

Sections 21-26 of the Act modify succession rights for family
members in rent stabilized and rent controlled housing. The Act
removes nephews, nieces, aunts and uncles from the list of
traditional family members with a right to remain in a rent
regulated unit after the permanent vacating of the apartment by
the leaseholding tenant. The definition of family member still
includes: husband, wife, son, daughter, stepson, stepdaughter,
father, mother, stepfather, stepmother, brother, sister,
grandfather, grandmother, grandson, granddaughter, daughter-in-
law, son-in-law, mother-in-law, and father-in-law. Non-
traditional household members “who can prove emotional and
financial commitment, and interdependence between such person and
the tenant” also continue to have succession rights.

The first successor under the succession rights rules is entitled
to a renewal lease with no vacancy allowance. Second successors
will be entitled to renewal leases as well, but they will have to
pay a vacancy allowance.

Contracts prohibiting rent regulation:

A novel provision of the Act, Section 27, amends the Public
Housing Law to permits the State to enter into contracts with
private entities “to encourage development of new multi-family
housing in municipalities found by the legislature to be
suffering from a housing emergency at the time of contracting.”
Under these contracts, the State will agree that any such housing
will remain exempt from rent regulation for a period of fifty
years, unless general wage and price controls are imposed, or the
owner or developer agrees to accept rent regulation in exchange
for tax or other government benefits.

comment: Nothing in this provision requires or even encourages
development of affordable housing for low or middle income
households.

Harassment penalties:

Section 28 of the Act amends the Penal Law to add a new class E
felony known as “harassment of a rent regulated tenant.” An owner
is guilty of harassment of a rent regulated tenant when, with
intent to cause a rent regulated tenant to vacate a housing
accommodation, he or she: intentionally causes physical injury to
the tenant or a third person; or, recklessly causes physical
injury to the tenant or third person. The Act also increases the
penalties for an administrative finding of harassment under the
rent regulation laws from between $500 and $1000 to between $1000
and $5000. Pursuant to Section 46 of the Act, this provision
takes effect 30 days after the effective date of the Act (July
19, 1997?), and applies to acts or offenses committed on or after
such date. These provisions are deemed repealed after June 15,
2003.

comment: New York City’s Illegal Eviction Law provides broader
protection to tenants than the new penal law provision, since
physical injury is not a necessary element of a violation of the
Illegal Eviction Law.

Failure to pay rent stabilization fee:

Sections 29 and 30 of the Act substantially alter the
consequences to landlords of failing to pay a fee to the locality
for each rent stabilized unit. The ETPA requires landlords to pay
an assessment of no more than ten dollars per housing unit to the
locality in which the housing is located. Prior to the Act, an
owner who failed to pay this fee was barred from collecting any
rent increases until the fee was paid, and once paid, the owner
could only collect the increases prospectively. The Act
eliminates the bar to collecting rent increases and, instead, as
a sole remedy, permits the locality to collect by commencing a
court action or proceeding or filing a lien on the building.
Under Section 46 of the Act, this provision applies to any
pending or future action, proceeding or administrative complaint,
and applies to any arrears presently due pursuant to the ETPA or
the New York City Rent Stabilization Law.

Amnesty for rent overcharges:

Sections 31-33 of the Act alters the rent stabilization system to
deny tenants the right to challenge rents set forth in the
registration statements filed four years prior to the most recent
registration statement. In other words, if a landlord’s illegal
rent is not challenged within four years of when the overcharge
commences, the landlord obtains an amnesty, and the tenant can’t
challenge the ongoing overcharge. The amendment also “precludes
examination of the rental history of the housing accommodation
prior to the four year period preceding the filing of a complaint
pursuant to this subdivision.” In addition, Section 34 of the Act
amends the CPLR to limit tenants to four years from when a first
overcharge is alleged to challenge an overcharge and also
precludes examination of the earlier history. Under Section 46 of
the Act, this provision applies to any pending or future action,
proceeding or administrative complaint.

comment: This provision was enacted to address the issue
presently pending before the Appellate Division, First Department
in Hart-Zafra v. Pilkes. The failure to permit overcharge
complaints filed prior to this amendment to be decided under the
old law and the court decisions interpreting that law should be
challenged as unconstitutional.

Rent deposits:

Sections 35-37 of the Act amends section 745 of the RPAPL to
require, in the City of New York, that at the second adjournment
of a summary eviction proceeding at the request of the
respondent, the court must, upon application by the landlord,
order the deposit within five days, of rent or use and occupancy
accrued from the date of service of the notice of petition and
petition on the respondent, and all sums that come due
thereafter. The court can no longer deny the landlord’s request
for a deposit “for good cause shown” as was possible under the
prior law. Nor can the court deny a deposit request because the
premises have “immediately hazardous” violations of the housing
code, as under the prior law. However, the request for a deposit
may be denied if the tenant, at an “immediate hearing,” can
establish that he or she has one of several enumerated defenses
to the proceeding. Also, tenants are not to be required to
deposit that portion of rent or use and occupancy that is payable
by a direct government housing subsidy, the Senior Citizen Rent
Increase Exemption, direct vendor or two-party checks of public
assistance recipients, rental assistance payable pursuant to the
Jiggetts case, or more than one-third of their monthly SSI check.
The court cannot waive the deposit requirement, or extend time
required for deposit without consent from the petitioner.

A request for adjournment to get an attorney now counts as one of
the adjournments for purposes of the deposit requirement. The Act
also amends Section 731 of the RPAPL to require petitions in
summary eviction proceedings to notify tenants of the rent
deposit requirement.

If the tenant lives in a building that has 12 or fewer units, the
tenant can also be required to pay the undisputed amount of rent
to the petitioner, and the disputed amount into court.

If a tenant fails to make a deposit of the full amount ordered,
the court, upon application by the petitioner, must dismiss
without prejudice the defenses and counterclaims of the tenant.
If the tenant makes the initial deposit, but fails to make a
deposit of rent that subsequently becomes due, the court, upon
application of the petitioner, is supposed to order an immediate
trial.

DHCR, in cooperation with the Office of Court Administration, is
directed to select, through a competitive process, a competent
financial institution for the deposit and maintenance of these
rent deposits. Pursuant to Section 46 of the Act, these
provisions are applicable to all summary eviction proceedings
that are commenced 120 days after the effective date of the Act
(October 13, 1997?), and the court is directed to promulgate a
brief notice regarding these provisions.

comment: Among other exceptions to the deposit requirement,
public assistance recipients will not have to deposit rent if
they can show that they have defenses pursuant to Section 143-b
of the Social Services Law. 143-b, known as the “Spiegel Law,”
provides public assistance recipients a defense to summary
nonpayment eviction proceeding, if rent is withheld by the
Department of Social Services because the housing unit is in
substandard condition. In New York City at least, the Department
of Social Services rarely, if ever, invokes the Spiegel Law. This
policy of not invoking the Spiegel Law should be re-thought.
Also, how will unrepresented tenants possibly be aware of the
various exceptions to the deposit requirement? Much of this
deposit requirement appears to be designed to force the court to
assist landlords in collecting rent. Much also appears to be an
unconstitutional violation of due process. There is no comparable
requirement that landlords deposit the amount of counterclaims or
damages in tenant-initiated actions. What happens to interest
that accrues?

Orders to Show Cause:

Section 37 of the Act adds a new Section 747-a of the RPAPL which
provides that when, in a summary eviction proceeding, the court
issues a judgment after the tenant has appeared and more than
five days elapse after the judgment, the respondent cannot obtain
a stay of issuance or execution of the warrant of eviction unless
the respondent can show that the judgment amount was paid to the
petitioner, or the amount is deposited in the court.

comment: This provision also appears to be unconstitutional.
There are any number of circumstances in which a tenant should be
entitled to be heard on a request for a stay, even after
appearance or trial, before being required to deposit rent.

Demolition:

Section 38 of the Act permits owners to demolish buildings
containing rent regulated units without first seeking
administrative approval when the building contains three or fewer
occupied units, or one occupied apartment if the building is ten
units or less.

Offset of remedies:

Sections 39 - 43 of the Act amend section 235-b of the Real
Property Law (the Warranty of Habitability law), and the rent
regulation laws to provide that any rent reduction under the rent
regulation laws based on failure to maintain services and make
repairs is to be offset by any abatement of rent granted by a
court pursuant to a warranty of habitability defense. Similarly,
any abatement awarded by the court is to be offset by any rent
reduction order that relates to a matter for which relief is
sought in court. Under Section 46 of the Act, this provision
applies to any pending or future action, proceeding or
administrative complaint.

Major Capital Improvement rent increases:

Section 43-a of the Act amends the Rent Stabilization Law in New
York City to limit application to hardship rent increases a four-
factor formula that places a cap on the amount of hardship
increase that may be granted.

comment: This amendment was obviously added at the request of
DHCR or RSA to address an issue in currently pending litigation.

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Date: Mon, 07 Jul 1997 13:19:35 -0400
Subject: New Rent Guideline Order #29 starts Oct. 1

NEW RGB RENT GUIDELINES ORDER FOR NYC RENT STAB TENANTS

On June 23, the NYC Rent Guidelines Board issued Order #29,
(reproduced below) which sets the allowable percentage rent
increases for rent stabilized tenants starting October 1, 1997
for all leases commencing at anytime between 10/1/97 and 9/30/98.

With the recent Rent Regulation Reform Act of 1997 (RRRA97) which
set vacancy increases at 20% minimum, the power of the RGB to set
vacancy increase percentage rates is no longer the province of
the RGB and instead now codified in state law. At the time,
legal opinions differed and in order to "maintain
its right," the RGB voted a vacancy rate of 0%. It also set a
vacancy rate of 5% for sublet increases (some think this is illegal).

Many vacancy rates will be more than 20%. In addition to the 20%,
if the previous tenant had been in occupancy for more than eight years,
then 0.6% (6/10 of 1%) can be added on top of the 20%. If the previous
tenant had been in occupancy for 20 years, then an additional 12% can be
added to the 20% vacancy rate -- a 32% vacancy rate.

And in addition, DHCR is expected to go along with the landlord plan that
until October 1, 1997, the existing RGB vacancy rate of 9% from Order #28
can also be added in on top of the 20%. (we think this is illegal, but
that's why DHCR is considered the King of Corrupt State Agenncies)

Owners are expected to continue their recent 1/40th Improvement feeding
frenzy where 1/40th of the costs of improvements can be added in to the
rent. Shel Silver and the Democratic Party gave owners a reversal of the
March 1997 City Council "clarification" which stated that the unit must be
renting at $2,000 or more WHEN THE PREVIOUS TENANT VACATES in order to
be eligible for high rent vacancy decontrol. Now, the rent can be far
less than $2,000. If the owner can get the rent up to $2,000 with the
20% (or higher) vacancy increase and added improvements (the reality is
he does not need to actually do the improvements -- just "intend" to do
them), then the unit will be immediately decontrolled.

With this scenario, just add up the numbers. We expect to see a vary large
number of rent stabilized units being decontrolled within very few years
and with this in mind, expect to see a significant rise in landlord
harassment.

==================================================================

NYC RENT GUIDELINES BOARD Order #29 - 1997-1998

INCREASES ALLOWED AS ESTABLISHED BY THE
RENT GUIDELINES BOARD OF THE
CITY OF NEW YORK

THE CITY OF NEW YORK
RENT GUIDELINES BOARD

June 23, 1997
Order Number 29
Apartments and Lofts, rent levels for leases
commencing October 1, 1997 through September 30, 1998

NOTICE IS HEREBY GIVEN PURSUANT TO THE AUTHORITY VESTED IN THE NEW
YORK CITY RENT GUIDELINES BOARD BY THE RENT STABILIZATION LAW OF 1969, as
amended, and the Emergency Tenant Protection Act of 1974, as amended,
implemented
by Resolution No 276 of 1974 of the New York City Council and extended by
the Rent Regulation Reform Act of 1997, and in accordance with the
requirements
of Section 1043 of the New York City Charter, that the Rent Guidelines Board
hereby adopts the following levels of fair rent increases over lawful rents
charged and paid on September 30, 1997. These rent adjustments will apply
to rent stabilized apartments with leases commencing on or after October
1, 1997 and through September 30, 1998. Rent guidelines for loft units subject
to Section 286 subdivision 7 of the Multiple Dwelling Law are also included
in this order.

ADJUSTMENT FOR RENEWAL LEASES (APARTMENTS)

Together with such further adjustments as may be authorized by law, the
annual adjustment for renewal leases for apartments shall be:

  For a one year renewal lease commencing on or after October 1, 1997
  and on or before September 30, 1998: 2%

  For a two year renewal lease commencing on or after October 1, 1997
  and on or before September 30, 1998: 4%

These two adjustments shall also apply to dwelling units in a structure
subject to the partial tax exemption program under Section 421a of the Real
Property Tax Law, or in a structure subject to Section 423 of the Real
Property
Tax Law as a Redevelopment Project.

PROPOSED VACANCY ALLOWANCE FOR APARTMENTS

no vacancy allowance is permitted under this order except as provided
by sections 19 and 20 of the Rent Regulation Reform Act of 1997.

SUPPLEMENTARY ADJUSTMENT OF UP TO $15 PER MONTH FOR RENEWAL LEASES
FOR APARTMENTS RENTING FOR $400 OR LESS ON SEPTEMBER 30, 1997

For a renewal lease on a dwelling unit with a lawful rent of $400 or
less per month on September 30, 1997 the levels of rent increase for renewal
leases commencing October 1, 1997 through September 30, 1998 are the same
as those set forth hereinabove plus a $15 per month supplementary adjustment
provided the monthly rent resulting from application of this level of increase
or any portion thereof does not exceed $415.

ADDITIONAL ADJUSTMENT FOR RENT STABILIZED APARTMENTS SUBLET UNDER
SECTION 2525.6 OF THE RENT STABILIZATION CODE

In the event of a sublease governed by subdivision (e) of section 2525.6
of the Rent Stabilization Code, the allowance authorized by such subdivision
shall be 5%, provided, however, that this charge shall not be in addition
to other sublet adjustments allowed by law or by the New York State Division
of Housing and Community Renewal.

PROPOSED ADJUSTMENTS FOR LOFTS (UNITS IN THE CATEGORY OF BUILDINGS
COVERED BY ARTICLE 7-C OF THE MULTIPLE DWELLING LAW)

The Rent Guidelines Board proposes the following levels of rent increase
above the "base rent", as defined in Section 286, subdivision
4, of the Multiple Dwelling Law, for units where residential renewal leases
are offered pursuant to Section 286, subdivision 3:--

  For one year renewal leases commencing on or after October 1, 1997
  and on or before September 30, 1998: 2%

  For two year renewal leases commencing on or after October 1, 1997
  and on or before September 30, 1998: 4%

For a renewal lease on a dwelling unit with a lawful rent of $400 or
less per month on September 30, 1997 the levels of rent increase for renewal
leases commencing October 1, 1997 through September 30, 1998 are the same
as those set forth hereinabove plus $15 per month provided the monthly rent
resulting from application of this level of increase or any portion thereof
does not exceed $415.

LEASES ON VACANT LOFT UNITS

No Vacancy Allowance is permitted under this Order. Therefore, except
as otherwise provided in Section 286, subdivision 6, of the Multiple Dwelling
Law, or by other law, the rent charged to any tenant for a vacancy lease
commencing on or after October 1, 1997 and on or before September 30, 1998
may not exceed the "base rent" referenced above plus the level
of adjustment permitted above for renewal leases and the supplementary
adjustment of $15, if applicable.

FRACTIONAL TERMS

For the purposes of these guidelines any lease or tenancy for a period
up to and including one year shall be deemed a one year lease or tenancy,
and any period over one year and up to and including two years shall be
deemed a two year lease.

ESCALATOR CLAUSES

Where a lease for a dwelling unit in effect on May 31, 1968 or where
a lease in effect on June 30, 1974 for a dwelling unit which became subject
to the Rent Stabilization Law of 1969, by virtue of the Emergency Tenant
Protection Act of 1974 and Resolution Number 276 of the New York City Council,
contained an escalator clause for the increased costs of operation and such
clause is still in effect, the lawful rent on September 30, 1997 over which
the fair rent under this Order is computed shall include the increased rental,
if any, due under such clause except those charges which accrued within
one year of the commencement of the renewal lease. Moreover, where a lease
contained an escalator clause that the owner may validly renew under the
Code, unless the owner elects or has elected in writing to delete such clause,
effective no later than October 1, 1997 from the existing lease and all
subsequent leases for such dwelling unit, the increased rental, if any,
due under such escalator clause shall be offset against the amount of increase
authorized under this Order.

SPECIAL ADJUSTMENTS UNDER PRIOR ORDERS

All rent adjustments lawfully implemented and maintained under previous
apartment orders and included in the base rent in effect on September 30,
1997 shall continue to be included in the base rent for the purpose of
computing
subsequent rents adjusted pursuant to this Order.

SPECIAL GUIDELINE

Under Section 26-513(b)(1) of the New York City Administrative Code,
and Section 9(e) of the Emergency Tenant Protection Act of 1974, the Rent
Guidelines Board is obligated to promulgate special guidelines to aid the
State Division of Housing and Community Renewal in its determination of
initial legal regulated rents for housing accommodations previously subject
to the City Rent and Rehabilitation Law which are the subject of a tenant
application for adjustment. The Rent Guidelines Board hereby adopts the
following Special Guidelines:-

For dwelling units subject to the Rent and Rehabilitation Law on September
30, 1997, which become vacant after September 30, 1997, the special guideline
shall be the greater of 40% above the maximum base rent as it existed or
would have existed, or 50% above the maximum collectible rent paid by the
prior tenant plus the allowable fuel cost adjustment.

DECONTROLLED UNITS

The permissible increase for decontrolled units as referenced in Order
3a which become decontrolled after September 30, 1997, shall not exceed
the greater of 40% above the maximum base rent as it existed or would have
existed, or 50% above the maximum collectible rent paid by the prior tenant
plus the allowable fuel cost adjustment.

CREDITS

Rentals charged and paid in excess of the levels of rent increase established
by this Order shall be fully credited against the next month's rent.

STATEMENT OF BASIS AND PURPOSE

The Rent Guidelines Board is authorized to promulgate rent guidelines
governing apartment units subject to the Rent Stabilization Law of 1969,
as amended, and the Emergency Tenant Protection Act of 1974, as amended.
The purpose of these guidelines is to implement the public policy set forth
in Findings and Declaration of Emergency of the Rent Stabilization Law of
1969 (§26-501 of the N.Y.C. Administrative Code) and in the Legislative
Finding contained in the Emergency Tenant Protection Act of 1974 (L.1974
c. 576, §4 [§2]).

The Rent Guidelines Board is also authorized to promulgate rent guidelines
for loft units subject to Section 286 subdivision 7 of the Multiple Dwelling
Law. The purpose of the loft guideline is to implement the public policy
set forth in the Legislative Findings of Article 7-C of the Multiple Dwelling
Law (Section 280).

Dated: June 23, 1997
Edward S. Hochman, Esq. Chairman
Rent Guidelines Board

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