While there are exceptions to these general rules, your apartment is probably rent-controlled if your building was built before 1947, contains three or more apartments, and you or a family member moved in before July 1, 1971.
Your apartment is probably rent-stabilized if your building contains six or more apartments and 1) was built between 1947 and 1973; or 2) was built before 1947 and you moved in after June 30, 1971. Generally, rent controlled tenants have only one old, original lease or no lease; stabilized tenants have leases which they can renew every one or two years. Some apartments that meet the general criteria for rent regulation are exempt due to the rent level of the apartment and the timing of past vacancies. See "High Rent Vacant Units"
Apartments in buildings constructed after 1973 are not subject to regulation unless the owners received assistance under one of two city tax benefit programs, J-51 or 421-a, or certain other city or state loan programs. Stabilization protections for these apartments are based on when the tenant moved in, when the building was built or rehabilitated and specific clauses included in their leases. Special rules also apply to buildings owned by non-profit institutions such as hospitals or colleges. Certain units may also be deregulated because of the rent and the tenant's income; these provisions are explained in detail below.
The Office of Rent Administration of the state Division of Housing and Community Renewal (DHCR) Gertz Plaza, 92-31 Union Hall Street, Jamaica, NY 11433, (718) 739-6400 administers both systems. Manhattan Borough Rent Offices are located at 25 Beaver Street, New York, NY 10004, (212) 480-6700; and Adam Clayton Powell, Jr. State Office Building, 163 West 125th Street - 5th Floor, New York, NY 10027, (212) 961-8939.
Vacant apartments renting for $2,000 a month or more are deregulated. All other apartments switch over to rent stabilization and the first new rent is set by the owner, who is required to notify tenants if they are the first occupants of an apartment that was previously rent-controlled. Tenants who believe their new rent is not based on rents for similar apartments in the neighborhood have until the earlier of 90 days from receipt of the notification or four years from the time the unit was no longer rent-controlled to challenge the rent by filing a Fair Market Rent Appeal with DHCR.
Increases for rent-controlled apartments are derived from two figures: the Maximum Base Rent (MBR), a maximum ceiling for rents, and the Maximum Collectible Rent (MCR), the amount an owner can actually collect. New MBRs are computed for each rent-controlled apartment in the city every two years. However, the annual MCR increase in most cases cannot exceed 7.5% annually, and there are some conditions owners must meet in terms of removing violations and maintaining the apartment in order to qualify for the increase.
Increases for stabilized apartments are established annually by the NYC Rent Guidelines Board (RGB) 51 Chambers Street, Suite 202, New York, NY 10007, (212) 385-2934, whose members are appointed by the mayor. For renewal leases taking effect on or after October 1, 2002 and on or before September 30, 2003, the guidelines are: 2% for a one-year lease, and 4% for a two-year lease. Although the RGB did not authorize a vacancy allowance, statutory provisions adopted in the 1997 Rent Regulation Reform Act (RRRA) at the insistence of the Senate Majority provide a framework for rather substantial automatic vacancy allowances. Please contact my office if you would like a copy of a special fact sheet we've prepared on vacancy allowances. Owners of apartments that are being sublet may collect an additional 10% increase under the 2002 guidelines; this figure may change next year.
Owners of rent-controlled apartments can apply for "passalongs" for increased labor and fuel costs. Tenants must be notified of filings for these increases and have the opportunity to challenge the request. No passalongs are permitted for rent-stabilized apartments. However, owners of stabilized apartments built with 421-a tax benefits are authorized to collect a special surcharge of 2.2% of the apartment's initial rent each year for the length of the benefit period.
Your rent can be increased if the owner provides you with a new appliance, new equipment or furnishings or new services. But your written consent (and an owner's notification to DHCR, if you are a rent-controlled tenant) is necessary before such increase goes into effect. A tenant does not have to accept new appliances and pay an increase, despite claims by the owner that only new equipment is available for replacements. In the event that an appliance breaks down, the law requires the owner to repair it or replace it with a used or reconditioned appliance in good working order. If a tenant opts for a new appliance, an owner is entitled to collect a permanent monthly rent increase equal to 1/40th of its cost, but only with the tenant's written consent. Owners are also entitled to add 1/40th of the cost of new equipment or improvements to the legal rent for vacant apartments.
Eligible MCIs, the cost of which become a permanent addition to monthly rents, must contribute to the operation, maintenance and preservation of the building, and directly or indirectly benefit all the tenants. The most common improvements are new roofs, elevators, boilers or windows in every apartment.
Completion of the improvements may entitle the owner to increase your rent, subject to approval by DHCR. DHCR may reject MCI applications if owners have failed to maintain all required services in the building or there are current "immediately hazardous" violations in effect. Under its rules, DHCR may grant increases conditioned on correction of violations within a reasonable time frame. The costs of MCIs paid for out of the reserve fund of a cooperative corporation or condominium association, unless reimbursed by a special assessment on unit owners, and those paid from grants from governmental entities, cannot be passed on to tenants living in regulated apartments in such buildings.
MCI increases are permanent additions to your monthly rent of 1/84th of the total cost of the improvement divided by the total number of rooms in your building, and then multiplied by the total number of rooms in your apartment. For controlled tenants, MCI increases are capped at 15% of your rent; for stabilized tenants, the ceiling is 6%. Because of the agency's delay in processing MCI applications, DHCR has been allowing owners of rent-stabilized units to collect an additional temporary increase retroactive to the date that the tenants were served with the owner's MCI application.
When DHCR begins processing an MCI application, tenants receive an official notice outlining the work done and the increase sought. Tenants then have 30 days to challenge the application. Do not pay any MCI increase until you have received a copy of the order authorizing the increase from DHCR.
You have the right to know the maximum amount of rent the owner can charge. Rent-controlled tenants can find this out by filing a request with DHCR. For new rent-stabilized tenants, owners are required to include a special DHCR lease rider that discloses the rent paid by the last tenant. Owners are also required to register the rent for every rent-stabilized apartment with DHCR annually, and provide all tenants with a copy of the registration. Tenants can also find out their last registered rent from DHCR by contacting a Borough Rent Office (see #2) and providing proof they are the current tenants. If, after checking with the owner you believe you are being overcharged, you may file a Rent Overcharge complaint with DHCR. Under the 1997 RRRA, tenants have four years to file an overcharge complaint; late challenges will be dismissed.
Tenants have the right to renew their lease at their option for a one-or two-year period at the RGB's approved renewal guideline then in effect, under the same terms and conditions as their original lease. Owners must use a lease renewal form promulgated by DHCR. New tenants also have the right to choose a one- or two-year lease.
Owners must offer renewal leases between 150 and 90 days prior to the expiration of your current lease, or state a reason why they are not renewing it. If you don't receive a timely renewal notification, remind the owner of his or her obligation in a certified letter, return receipt requested. If no renewal is forthcoming, file an Owner's Failure to Renew Lease complaint with DHCR and sit tight. Until you receive a signed renewal lease, you cannot be charged more than the rent in your current lease.
As a general rule, many stabilized or rent-controlled apartment becoming vacant after July 6, 1993 with a legal regulated of $2,000 or more per month may be deregulated by an owner. A detailed explanation of this complicated issue is available from my office. Apartments that meet the deregulation criteria but are regulated solely as a result of receiving either J-51 or 421-a property tax breaks remain regulated until the owner stops receiving the tax benefits. Deregulation provisions also do not apply when DHCR finds that an owner harassed a tenant in order to vacate the apartment. Under a local city law, owners who deregulate an apartment must, within 30 days of occupancy or the signing of a lease, provide the first new tenant with a detailed notice showing how the rent reached the deregulation threshold and a DHCR phone number and address to verify the new rent.
Owners are also permitted to apply to DHCR for a decontrol or destabilization order if: 1) the combined federal adjusted gross annual income of apartment occupants is over $175,000 for each of the previous two calendar years; and 2) the legal rent for the apartment is $2,000 or more per month.
In order to apply for a decontrol/destabilization order, an owner must send the tenant an Income Certification Form by May 1.
Owners can do this every year, and tenants must respond within 30 days. The form asks for the names of all occupants and to state whether their combined income exceeded $175,000 in each of the previous two years. For this survey, "apartment occupants" includes all people using the apartment as their primary residence; it does not include temporary occupants, subtenants or live-in employees.
If a tenant reports a total occupant income of over $175,000 for each of the previous two years, owners may file a Petition by Owner for High-Income Rent Deregulation with DHCR by June 30 of that year. Within 30 days of the filing of the form, DHCR must issue an order removing the apartment from rent control or stabilization.
If a tenant fails to return the form, owners may file a Petition For Deregulation, and DHCR will then attempt to obtain income information from the tenant. If a tenant doesn't respond to the request or shows income exceeding $175,000, DHCR must issue a decontrol/destabilization order.
If a tenant reports income below the threshold, an owner has until June 30 to request that DHCR verify the information with the state Department of Taxation and Finance. If DHCR finds that the household income exceeds the threshold, it will issue an order of decontrol/destabilization.
If DHCR issues such an order, a rent-controlled apartment will be deregulated on June 1 of the year after the filing of the income certification form in which the tenant concedes high income, or on March 1 in cases where the tenant disputed high income or failed to respond in a timely manner to DHCR's request for financial information. Rent-stabilized apartments will be deregulated at the expiration of the current lease. Owners who obtain decontrol orders are obligated to offer to continue to rent the apartment to the current tenants at a fair market rent. As is the case with the vacancy decontrol provisions, units which are regulated solely as a result of receiving 421-a or J-51 tax benefits cannot be deregulated until the benefits expire.
The owner may collect a security deposit limited to one month's rent from regulated tenants who moved in after May 31, 1968. There are no rules governing the size of security deposits for free-market apartments.
Owners of buildings with six or more apartments must place all security deposits in separate interest-bearing accounts in the tenant's name, and inform them of the name and location of the bank. Tenants may opt to receive the interest (less 1% of the rate it earned for administrative costs) annually, apply it towards the rent, or take the lump sum when they move out.
Once every three years; owners cannot demand deposits or collect additional fees for fulfilling this obligation.