9 NYCRR Part 2102 - Executive Department

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9 NYCRR 2102.1 - Maximum rents

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

Maximum rents may be increased or decreased only by order of the administrator except as hereinafter specified, or as otherwise provided by law.

9 NYCRR 2102.2 - Effective date of orders adjusting rents

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

No order increasing or decreasing a maximum rent previously established pursuant to this Subchapter shall be effective prior to the date on which the order is issued.

9 NYCRR 2102.3 - Grounds for increase of maximum rent

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

(a)

(1)This section sets forth specific standards for the increase of a maximum rent. In applying these standards and entering an order adjusting a maximum rent, the administrator shall take into consideration all factors bearing on the equities involved, subject to the general limitation that the adjustment can be put into effect without dislocation and hardship inconsistent with the purposes of the act.

(2)The administrator shall have the power to revoke or modify any adjustment granted hereunder if there has been a substantial change in the basis upon which such adjustment was granted.

(3)No landlord shall be entitled to any increase in the maximum rent under this section unless he certifies that he is maintaining all essential services provided or required to be provided with the housing accommodations involved as of the date of the issuance of the order adjusting the maximum rent and that he will continue to maintain such services so long as the increase in such maximum rent continues in effect; nor shall any landlord be entitled to any increase in the maximum rent in any case where a municipal department having jurisdiction certifies that the housing accommodation is a fire hazard, or is in a continued dangerous condition or detrimental to life or health, or is occupied in violation of law.

(4)The total of all adjustments for any individual housing accommodation granted under paragraphs (b)(5) and (7) of this section shall not exceed 15 percent for any 12-month period, except as provided in subparagraph (b)(5)(iv) of this section.

(5)That portion of the amount of increase computed under paragraphs (b)(5), (6) and (7) of this section as is properly attributable to the controlled housing accommodations shall be apportioned among them so that each bears an equitable portion thereof. In making such apportionment and in fixing the increases in maximum rents the administrator shall give due consideration to all previous adjustments or increases in maximum rents by lease or otherwise. Each controlled housing accommodation shall bear no more than that portion of the amount of increase as is properly attributable to such housing accommodation, whether or not the amount so attributed shall be fully collectible by reason of existing lease.

(b)Except with regard to an adjustment pursuant to clause (1)(i)(b) of this subdivision, for which approval of the administrator shall not be required, any landlord may file an application to increase the maximum rent otherwise allowable, on forms prescribed by the administrator, only on one or more of the following grounds:

(1)Increase service or facilities, substantial rehabilitation, major capital or other improvements. The administrator may grant an appropriate adjustment of a maximum rent where he finds that:

(i)

(a)the landlord and tenant by mutual voluntary written agreement, subject to the approval of the administrator, agree to a substantial increase in dwelling space or an increase in the services, furniture, furnishings or equipment provided in the housing accommodations; or the tenant has accepted and is obtaining the benefit of increased services, furniture, furnishings or equipment; or

(b)on or after July 7, 1993, the landlord and tenant may, by mutual voluntary written agreement, agree to a substantial increase in dwelling space or a change in the services, furniture, furnishings or equipment provided in the housing accommodation; or the tenant has accepted and is obtaining the benefit of increased services, furniture, furnishings or equipment. In such case, an adjustment of the maximum rent shall be available without the approval of the administrator, and shall include the total cost incurred by the landlord in providing such modification or increase, including the cost of installation, but excluding finance charges. Prior to September 24, 2011, the rent adjustment shall be ¹/_40th of the cost of the improvement and on or after September 24, 2011, the rent adjustment shall be ¹/_40th of the cost of the improvement in buildings and complexes containing 35 or fewer housing accommodations and ¹/_60th of the cost of the improvement in buildings and complexes of more than 35 housing accommodations. A landlord who is entitled to a rent adjustment pursuant to this paragraph, shall not be entitled to a further rent increase based upon the installation of similar equipment, or new furniture or furnishings within the useful life of such new equipment, or new furniture or furnishings. The landlord shall give written notice to the commission of any such adjustment; or

(ii)there has been since March 1, 1950 an increase in the rental value of the housing accommodations as a result of a substantial rehabilitation of the building or housing accommodations therein which materially adds to the value of the property or appreciably prolongs its life, excluding ordinary repairs, maintenance and replacements; or

(iii)

(a)there has been a major capital improvement, including an installation, which must meet all of the following criteria:

(1)deemed depreciable under the Internal Revenue Code, other than for ordinary repairs;

(2)is for the operation, preservation, and maintenance of the structure;

(3)is an improvement to the building or to the building complex which inures directly or indirectly to the benefit of all tenants, and which includes the same work performed in all similar components of the building or building complex, unless the landlord can satisfactorily demonstrate to the administrator that certain of such similar components did not require improvement; and

(4)the item being replaced meets the requirements set forth on the following useful life schedule, except with the administrator's approval of a waiver, as set forth in subclause (5) of this clause.

USEFUL LIFE SCHEDULE FOR MAJOR CAPITAL IMPROVEMENTS
Replacement item or equipment	Years-estimated life
(1) Boilers and burners
(a) Cast iron boiler	35
(b) Package boiler	25
(c) Steel boiler	25
(d) Burners	20
(2) Windows
(a) Aluminum	20
(b) Wood	25
(c) Steel	25
(d) Storm	20
(e) Vinyl	15
(3) Roofs
(a) 2-ply (asphalt)	10
(b) 3-4 ply (asphalt)	15
(c) 5-ply (asphalt)	20
(d) Shingle	20
(e) Single-ply rubber	20
(f) Single-ply modified bitumen	10
(g) Quarry tile	20
(4) Pointing	15
(5) Rewiring	25
(6) Intercom system	15
(7) Mailboxes	25
(8) Plumbing/repiping
(a) Galvanized steel	25
(b) TP copper	30
(c) Brass cold water	15
(d) Fixtures	25
(9) Elevators
(a) Major upgrade	25
(b) Controllers and selector	25
(10) Doors
(a) Apartment entrance	25
(b) Lobby/vestibule	15
(11) Bathroom upgrading
(a) Toilets and valves	20
(b) Bathroom and sinks	20
(c) Vanity	20
(12) Kitchen upgrading
(a) Metal/wood cabinets	20
(b) Ranges	20
(c) Refrigerators	15
(d) Sinks	20
(13) Water tanks
(a) Metal	25
(b) Wood	20
(14) Waste compactors	10
(15) Air conditioners
(a) Individual units/sleeves	10
(b) Central system	15
(c) Branch circuitry fixtures	15
(16) Aluminum siding	25
Vinyl siding	15
(17) Catwalk	25
(18) Chimney
(a) Steel	25
(b) Brick	25
(19) Courtyards/walkways/driveways
(a) Cement	15
(b) Asphalt	10
(20) Fire escapes	25
(21) Fuel oil tanks
(a) In vaults	25
(b) Underground	20
(22) Water heating units
(a) Hot water/central heating	20
(b) Hot water heater (domestic)	10
(23) Parapets
(a) Brick	25
(24) Resurfacing exterior walls	25
(25) Solar heating system	25
(26) Structural steel	25
(27) Television security	10

For major capital improvements not listed above, the landlord must submit with the application evidence that the useful life of the item or equipment being replaced has expired.

(5)

(i)a landlord who wishes to request a waiver of the useful life requirement set forth in subclause (4) of this clause must apply to the administrator for such waiver prior to commencement of the work for which he or she will be seeking a major capital improvement rent increase. Notwithstanding this requirement, where the waiver is requested for an item being replaced because of an emergency, which causes the building or any part thereof to be dangerous to human life and safety or detrimental to health, a landlord may apply to the administrator for such waiver at the time he or she submits the major capital improvement rent increase application;

(ii)if waiver is denied, the landlord will not be eligible for an MCI increase. If it is granted, the useful life requirement will not be a factor in the determination of eligibility for the major capital improvement rent increase. However, approval of the waiver does not assure that the application will be granted, as all other requirements set forth in this clause must be met;

(iii)a landlord may apply for, and the administrator may grant, a waiver of the useful life requirements set forth in the useful life schedule, if the landlord satisfactorily demonstrates the existence of one or more of the following circumstances:

(A)the item or equipment cannot be repaired and must be replaced during its useful life because of a fire, vandalism or other emergency, or "act of God" resulting in an emergency;

(B)the item or equipment needs to be replaced because such item or equipment is beyond repair, or spare parts are no longer available, or required repairs would cost more than 75 percent of the cost of the total replacement of the item or equipment. Certification by a duly licensed engineer or architect, where there is no common ownership or other financial interest with the landlord, shall be considered substantial proof of such condition(s). The landlord may also be required to submit proof that the item or equipment was properly maintained. Such proof may include receipts for repairs and parts or maintenance logs;

(I)an appropriate New York State or local governmental agency has determined that the item or equipment needs to be replaced as part of a government housing program;

(II)for the landlord to qualify for a New York State or local government long-term loan or insured loan, the governmental lender or insurer requires the remaining useful life of the building or building complex, as well as the component parts of such building or building complex, to be as great as or greater than the term of the loan agreement;

(D)the replacement of an item or equipment which has proven inadequate, through no fault of the landlord, is necessary, provided that there has been no major capital improvement increase for that item or equipment being replaced;

(iv)in the event that the administrator determines that an installation qualifies for a waiver of the useful life requirements, the administrator may:

(A)where no previous increase was granted within the useful life of the item or equipment being replaced and the cost of repair would equal or exceed the cost of replacement, approve 100 percent of the substantiated cost of the item or equipment, including installation;

(B)where no previous increase was granted within the useful life of the item or equipment being replaced and the cost of repair is more than 75 percent of the cost of replacement, grant a prorated increase based upon the remaining useful life;

(C)where it is determined that an item is eligible to be replaced during its useful life, grant an increase based upon the difference between the substantiated cost of the item or equipment, including installation, and (a) the amount reimbursed from other sources, such as insurance proceeds or any other form of commercial guarantee, and (b) the amount of any increase previously granted for the same item or equipment either as a major capital improvement, or pursuant to other governmental programs, if such item or equipment has not exhausted at least 75 percent of its useful life at the time of the installation;

(D)where it is determined that an item is eligible to be replaced even though it has not exhausted 75 percent of its useful life and that it was installed as part of a substantial rehabilitation or the new construction of a building for which the landlord set initial building-wide rents, the administrator may reduce the increase granted for a major capital improvement by a proportion of the remaining useful life of such item or equipment;

(v)notwithstanding the provisions of item (iv) of this subclause, where a landlord had substantially commenced work on the major capital improvement installation before the adoption of the useful life schedule, based on prior administrator's decisions and polices, and where adherence to useful life requirements or to the conditions of the waiver would create an undue hardship, the landlord's application will be determined in accordance with those prior decisions and policies.

(b)there has been an increase in services or improvement, other than repairs, on a building-wide basis, which the landlord can demonstrate are necessary in order to comply with a specific requirement of law.

(c)improvements or installations for which the administrator may grant applications for rent increases based upon major capital improvements pursuant to clause (a) of this subparagraph are described on the following schedule. Other improvements or installations that are not included may also qualify, where all requirements of clause (a) of this subparagraph have been met.

SCHEDULE OF MAJOR CAPITAL IMPROVEMENTS

1.AIR CONDITIONER:

- new central system; or individual units set in sleeves in the exterior wall of every housing accommodation; or, air conditioning circuits and outlets in each living room and/or bedroom (SEE REWIRING).

2.ALUMINUM SIDING:

- installed in a uniform manner on all exposed sides of the building (SEE RESURFACING).

3.BATHROOM MODERNIZATION:

- complete renovation including new sinks, toilets, bathtubs, and/or showers and all required trims in every housing accommodation; or any individual component or fixture if done building-wide.

4.BOILER AND/OR BURNER:

- new unit(s) including electrical work and additional components needed for the installation.

5.BOILER ROOM:

- new room where none existed before; or enlargement of existing one to accommodate new boiler.

6.CATWALK:

- complete replacement.

7.CHIMNEY:

- complete replacement, or new one where none existed before, including additional components needed for the installation.

8.COURTYARD, DRIVEWAYS AND WALKWAYS:

- resurfacing of entire original area within the property lines of the premises.

9.DOORS:

- new lobby front entrance and/or vestibule doors; or entrance to every housing accommodation, or fireproof doors for public hallways, basement, boiler room and roof bulkhead.

10.ELEVATOR UPGRADING:

- including new controllers and selectors; or new electronic dispatch overlay system; or new elevator where none existed before, including additional components needed for the installation.

11.FIRE ESCAPES:

- complete new replacement including new landings.

12.GAS HEATING UNITS:

- new individual units with connecting pipes to every housing accommodation.

13.HOT WATER HEATER:

- new unit for central heating system.

14.INCINERATOR UPGRADING:

- including a new scrubber.

15.INTERCOM SYSTEM:

- new replacement; or one where none existed before, with automatic door locks and pushbutton speakerbox and/or telephone communication, including security locks on all entrances to the building.

16.KITCHEN MODERNIZATION:

- complete renovation including new sinks, counter tops and cabinets in every housing accommodation or any individual component or fixture if done building-wide.

17.MAILBOXES:

- new replacements and relocated from outer vestibule to an area behind locked doors to increase security.

18.PARAPET:

- complete replacement.

19.POINTING AND WATERPROOFING:

- as necessary on exposed sides of the building.

20.REPIPING:

- new hot and/or cold water risers, returns, and branches to fixtures in every housing accommodation, including shower bodies, and/or new hot and/or new cold water overhead mains, with all necessary valves in basement.

21.RESURFACING OF EXTERIOR WALLS:

- consisting of brick or masonry facing on entire area of all exposed sides of the building.

22.REWIRING:

- new copper risers and feeders extending from property box in basement to every housing accommodation; must be of sufficient capacity (220 volts) to accommodate the installation of air conditioner circuits in living room and/or bedroom.

23.ROOF:

- complete replacement or roof cap on existing roof installed after thorough scraping and leveling as necessary.

24.SOLAR HEATING SYSTEM:

- new central system, including additional components needed for the system.

25.STRUCTURAL STEEL:

- complete new replacement of all beams including footing and foundation.

26.TELEVISION SYSTEM:

- new security monitoring system including additional components needed for the system.

27.WASTE COMPACTOR:

- new installation(s) serving entire building.

28.WASTE COMPACTOR ROOM:

- new room where none existed before.

29.WATER SPRINKLER SYSTEM (FOR FIRE CONTROL PURPOSES):

- new installation(s).

30.WATER TANK:

- new installation(s) serving entire building.

31.WINDOWS:

- new framed windows.

(d)

(1)an increase in the monthly maximum rent pursuant to clause (a) of this subparagraph shall be ¹/₈₄th of the total cost of the approved items in the application;

(2)the determination of the appropriate adjustment of a maximum rent shall take into consideration all factors bearing on the equities involved, subject to the general limitation that the adjustment can be put into effect without dislocation and hardship inconsistent with the purposes of the act, and including as a factor a return of the actual cost to the landlord, exclusive of interest or other carrying charges, and the increase in the rental value of the housing accommodations;

(3)no increase pursuant to clause (a) of this subparagraph shall be granted within the useful life of an improvement or installation for which an increase was previously granted except with the administrator's approval for required improvements;

(4)no increase pursuant to clause (a) of this subparagraph shall be collectible from a tenant to whom there has been issued a currently valid senior citizen rent increase exemption pursuant to local law or ordinance to the extent that such increase may cause the maximum rent of the housing accommodation to exceed a specified portion, if any, pursuant to such local law or ordinance, of the aggregate disposable income of all members of the household residing in the housing accommodation;

(5)the collection of any increase in the maximum rent pursuant to subparagraphs (ii) and (iii) of this paragraph shall not exceed fifteen percent in any year from the effective date of the order granting the increase over the rent set forth in the schedule of gross rents with collectibility of any dollar excess above said sum to be spread forward in similar increments and added to the maximum rent as established or set in future years. In no event shall more than one 15 percent increase in the maximum rent be collected in the same year;

(6)no increase pursuant to subparagraphs (ii), (iii) and (iv) of this paragraph shall be granted unless an application is filed no later than two years after the completion of the installation or improvement unless the applicant can demonstrate that the application could not be made within two years due to delay, beyond the applicant's control, in obtaining required governmental approvals for which the applicant has applied within such two-year period;

(e)the administrator shall determine the dollar amount of the monthly rent adjustment pursuant to subparagraphs (1)(ii) and (iii) of this paragraph. Such dollar amount shall be divided by the total number of rooms in the building. The amount so derived shall then be added to the rent chargeable to each housing accommodation in accordance with the number of rooms contained in such housing accommodation. When determining the adjustment of maximum rents pursuant to clause (a) of this subparagraph, where the subject building contains commercial rental space in addition to residential rental space, and the administrator determines that the commercial space benefits from the improvement, the administrator shall allocate the approved costs between such commercial rental space and the residential rental space based upon the relative square feet of each rental area;

(f)where during the processing of a rent increase application filed pursuant to clause (a) of this subparagraph, tenants interpose answers complaining of defective operation of the major capital improvement, the complaint may be resolved in the following manner:

(1)Where "sign-offs" of a city, town or village (other than building permits) are required for the approval of the installation, and the tenants' complaints relate to the subject matter of the sign-off, the complaints may be resolved on the basis of the sign-off, and the tenants referred to the approving governmental agency for whatever action such agency may deem appropriate.

(2)Where sign-offs of a city, town or village are not required, or where the alleged defective operation of the major capital improvement does not relate to the subject matter of the sign-off, the complaint may be resolved by the affidavit of an independent licensed architect or engineer that the condition complained of was investigated and found not to have existed, or if found to have existed, was corrected. Such affidavit, which shall be served by the administrator on the tenants, will raise a rebuttable presumption that the major capital improvement is properly operative. Tenants may rebut this presumption only on the basis of persuasive evidence, for example, a counter affidavit by an independent licensed architect or engineer, or an affirmation by 51 percent of the complaining tenants. Except for good cause shown, failure to rebut the presumption within 30 days will result in the issuance of an order without any further physical inspection of the premises by the administrator.

(3)General requirements. There must be no common ownership, or other financial interest, between such architect or engineer and the owner or tenants. The affidavit shall state that there is no such relationship or other financial interest. The affidavit must also contain a statement that the architect or engineer did not engage in the performance of any work, other than the investigation, relating to the conditions that are the subject of the affidavit. The affidavit submitted must contain the original signature and professional stamp of the architect or engineer, not a copy. DHCR may conduct follow-up inspections randomly to ensure that the affidavits accurately indicate the condition of the premises. Any person or party who submits a false statement shall be subject to all penalties provided by law.

(iv)there has been since March 1, 1950 in structures containing more than four housing accommodations, other improvements made with the express consent of the tenants in occupancy of at least 75 percent of the housing accommodations, provided, however, that no adjustment for any individual housing accommodation shall exceed 15 percent of the maximum rent prescribed on the date the order is issued under this subparagraph unless the tenant has agreed to a higher percentage of increase.

(2)Voluntary written agreements. The landlord and tenant have voluntarily entered into a valid written lease in good faith with respect to any housing accommodation, which lease provides for an increase in the maximum rent then in effect under this Subchapter. The maximum rent established by the execution of such lease for the housing accommodation may not thereafter be increased by a subsequent lease executed pursuant to this paragraph except where the rent provided by such subsequent lease does not result in an increase of more than 15 percent over the maximum rent in effect prior to the execution of the original lease, exclusive of adjustments ordered by the administrator; or where after the expiration of the term of such lease, or in a case where such lease is terminated after the expiration of the first two years of its term, a new written lease may be entered into by the landlord and tenant for a term of not less than two years and providing for an increase not in excess of 15 percent over the maximum rent then in effect; or where such lease is terminated on or after December 15, 1955 and after the expiration of 12 months of its term a new written lease may be entered into by the landlord and tenant for a term of not less than the unexpired remainder of the first two years of the original lease plus two years and providing for an increase, commencing with the expiration of the first two years of the original lease, not in excess of 15 percent over the maximum rent then in effect. The maximum rent shall be automatically increased by the execution of such lease to the amount specified in such lease except that where such lease provides for an increase in excess of 15 percent, the increase shall be automatically reduced to 15 percent provided such lease:

(i)takes effect on or after March 15, 1951 for a term of not less than two years from the effective date thereof;

(ii)contains a certification by the landlord that he is maintaining all essential services furnished, or required to be furnished, as of the date determining the maximum rent and will continue to maintain such services so long as the increase in the maximum rent continues in effect;

(iii)gives the landlord no right of cancellation of said lease inconsistent with the provisions of this Subchapter;

(iv)does not provide for the payment by the tenant of any rent in excess of the amount therein provided, unless the maximum rent is thereafter increased by order of the administrator to which the tenant has consented pursuant to paragraph (1) of this subdivision; and

(v)if the lease is for a vacant housing accommodation and is for longer than a two-year term, gives the tenant the right of cancellation of said lease at any time after the expiration of the first two years of such lease by giving the landlord at least 30 days' notice in writing of his intention to cancel such lease and surrender possession of the housing accommodation. Within 30 days after the date of delivery of such lease by the tenant to the landlord, the landlord shall file a report of such lease upon forms prescribed by the administrator, which shall include a statement of any additional services or equipment furnished to the tenant as a consideration for the execution of the lease.

(3)Increased subtenants or occupants.

(i)There has been since March 1, 1950 a subletting without the written consent of the landlord or an increase in the number of adult occupants who are not members of the immediate family of the tenant, and the landlord has not been compensated therefor by adjustment of the maximum rent by lease or order of the administrator or pursuant to the Federal Act.

(ii)The administrator may grant an appropriate adjustment by reason of such change. Such adjustment shall be effective only during the period of subletting or increase in the number of occupants.

(4)Unique or peculiar circumstances.

(i)Because of unique or peculiar circumstances which materially affected the maximum rent thereof, the maximum rent is substantially lower than the rents generally prevailing in the same area for substantially similar housing accommodations.

(ii)The administrator may grant an appropriate adjustment of the maximum rent in the amount requested provided that the adjustment shall not result in a maximum rent higher than the rents generally prevailing in the same area for substantially similar housing accommodations.

(5)Net annual return.

(i)The net annual rental income from a property yields a net annual return of less than seven and one-half percent of the valuation of the property, as hereinafter defined. Such valuation shall be the current assessed valuation established by a city, town or village, which is in effect at the time of the filing of the application for an adjustment under this paragraph, properly adjusted by applying thereto the ratio which such assessed valuation bears to the full valuation as determined by the State Board of Equalization and Assessment on the basis of the assessment rolls of cities, towns and villages for the year 1954 and certified for such year by such board pursuant to section 49-d of the Tax Law; provided, however, that where at the time of the filing of the application for an adjustment under this paragraph such board has computations for such year indicating a different ratio for subclasses of residential property in a city, town or village, the administrator shall give due consideration to such different ratio except ratios in excess of 100 percent, provided, however, that where such board has not determined and certified any ratio pursuant to such section of such law for a city, town or village for such year, the administrator shall apply the ratio determined or certified by such board pursuant to section 12(12) of the Real Property Tax Law for the most recent year except where there has been a bona fide sale of the property within the period between March 15, 1957, and the time of filing of the application, as a result of a transaction at arms' length, on normal financing terms at a readily ascertainable price and unaffected by special circumstances such as a forced sale, exchange of property, package deal, wash sale or sale to a cooperative; provided, however, that where there has been more than one such bona fide sale within a period of two years prior to the date of filing of such application the administrator shall disregard the most recent of such sales if a prior sale within such two- year period was adopted as the valuation of the property in a proceeding under this paragraph. In determining whether a sale was on normal financing terms, the administrator shall give due consideration to the following factors:

(a)the ratio of the cash payment received by the seller to the sales price of the property and the annual gross income from the property;

(b)the total amount of the outstanding mortgages which are liens against the property (including purchase money mortgages) as compared with the equalized assessed valuation of the property;

(c)the ratio of the sales price to the annual gross income of the property, with consideration given to the total amount of rent adjustments previously granted, exclusive of rent adjustments because of changes in dwelling space, services, furniture, furnishings or equipment, major capital improvements, or substantial rehabilitation;

(d)the presence of deferred amortization in purchase money mortgages, or the assignment of such mortgages at a discount; and

(e)any other facts and circumstances surrounding such sale which, in the judgment of the administrator, may have a bearing upon the question of financing.

No application for adjustment of maximum rent based upon a sales price valuation shall be filed by the landlord under this paragraph prior to six months from the date of such sale of the property. In addition, no adjustment ordered by the administrator based upon such sales price valuation shall be effective prior to one year from the date of such sale. Where, however, the assessed valuation of the land exceeds four times the assessed valuation of the buildings thereon the administrator may determine a valuation of the property equal to five times the equalized assessed valuation of the buildings, for the purpose of this paragraph. The administrator may make a determination that the valuation of the property for the purposes of this paragraph is an amount different from such equalized assessed valuation where there is a request for a reduction in such assessed valuation currently pending; or where there has been a reduction in the assessed valuation for the year next preceding the effective date of the current assessed valuation in effect at the time of the filing of the application.

(ii)For the purposes of this paragraph the following terms shall mean and include:

(a)Property. Any structure or group of structures including the land containing housing accommodations having either common facilities, or which are contiguous, or which are operated as a single enterprise and which the administrator shall in his discretion find appropriate to be considered as a single operation for the purpose of this paragraph. The term property also includes a housing accommodation allocated to a proprietary lessee in a structure or premises owned by a cooperative corporation or association.

(b)Net annual return. The amount by which the earned income exceeds the operating expenses of the property.

(c)Earned income. The current maximum rents on an annual basis from all controlled housing accommodations; the current rents on an annual basis from all decontrolled and uncontrolled housing accommodations, commercial and business space, and other rented or rentable space; any other income earned from the operation of the property. Where a housing accommodation without a maximum rent is vacant or is occupied without payment of any rent or with payment of a partial rent, the rent generally prevailing for substantially similar controlled housing accommodations shall be deemed the rent for the purposes of the application. Where commercial or business or other rentable space is vacant or is occupied without paying of any rent or with payment of a partial rent, the rent generally prevailing for substantially similar space shall be deemed the rent for the purposes of the application. Where the administrator finds in considering an application under this paragraph that a present tenant is paying a rent less than the maximum rent, the administrator, upon request of the landlord, may reduce the maximum rent of the housing accommodation to the amount actually being paid, or to the highest maximum rent for comparable controlled housing accommodations in the structure, whichever is higher.

(d)Operating expenses. All operating expenses necessary in the operation and maintenance of the property and properly allocable to the test year, excluding mortgage interest and amortization, but including an allowance for depreciation of two per cent of the valuation of the buildings exclusive of the land, as defined in subparagraph (i) of this paragraph, or the amount shown for depreciation of the buildings in the latest required Federal income tax return, whichever is lower; provided, however, that no allowance for depreciation of the buildings shall be included where the buildings have been fully depreciated for Federal income tax purposes or on the books of the owner. Increases or decreases in real estate taxes, water or sewage charges and wages currently in effect may be projected in computing operating expenses.

(e)Test year. The most recent full calendar year or fiscal year, or any 12 consecutive months ending not more than 90 days prior to the filing of the application.

(iii)If, as determined by the administrator, a property is earning a net annual return of less than six percent of the valuation of the property, the administrator shall grant an adjustment in the maximum rents.

(iv)No adjustment under this paragraph for any individual housing accommodation shall exceed 15 percent of the maximum rent in effect on the date the order is issued under this paragraph; provided, however, that the administrator may waive this limitation where a greater increase is necessary to make the earned income of the property equal to its operating expenses; provided further, however, that the maximum rents, subject to the allocation requirement of paragraph (a)(5) of this section, shall be increased by such further additional amount during each succeeding 12-month period, not exceeding 15 percent of the maximum rent in effect on the effective date of the original order of adjustment, until the maximum rents for the property shall reflect the net annual return provided for in this paragraph, but, in no event, however, shall the total increase ordered for a succeeding 12-month period be more than an additional three percent of the maximum rent in effect on the effective date of the original order of adjustment unless a new application is filed by the landlord.

(v)No further application may be filed under this paragraph sooner than one year from the date of filing a prior application under this paragraph if an increase had previously been granted thereunder to establish a net annual return of six percent of the valuation of the property. No order increasing a maximum rent shall be issued on a subsequent application sooner than one year from the effective date, or the earlier effective date if there are dual effective dates, of the order granting an increase on the prior application. The administrator may waive these limitations where the property has been affected by a significant increase in operating costs which applied to a substantial segment of housing accommodations in the community.

(6)Unavoidable increases in operating costs in small structures.

(i)The landlord owns no more than four rental units within the State and has incurred unavoidable increases in property taxes, fuel, utilities, insurance and repairs and maintenance which have occurred since the Federal date determining the maximum rent or the date the property was acquired by the present owner, whichever is later.

(ii)Where the administrator finds in considering an application under this paragraph that a present tenant is paying a rent less than the maximum rent, the administrator, upon request of the landlord, may reduce the maximum rent of the housing accommodation to the amount actually being paid, or to the highest maximum rent for comparable controlled housing accommodations in the structure, whichever is higher. If, as determined by the administrator, the landlord has not been fully compensated by increases in rental income sufficient to offset such increases in operating costs the administrator shall grant an adjustment in the maximum rents.

(iii)No further application may be filed under this paragraph sooner than one year from the date of filing a prior application under this paragraph if an increase had previously been granted thereunder. No order increasing a maximum rent shall be issued on a subsequent application sooner than one year from the effective date, or the earlier effective date if there are dual effective dates, of the order granting an increase on the prior application. The administrator may waive these limitations where the property has been affected by a significant increase in operating costs which applied to a substantial segment of housing accommodations in the community.

(7)Unavoidable increases in operating costs in other specified structures.

(i)The landlord operates a hotel or rooming house or owns a cooperative apartment and has incurred unavoidable increases in property taxes and other costs, including costs of operation of such hotel or rooming house, but excluding mortgage interest and amortization, and excluding allowances for depreciation obsolescence and reserves, which have occurred since the Federal date determining the maximum rent or the date the landlord commenced the operation of the property, whichever is later.

(ii)Where the administrator finds in considering an application under this paragraph that a present tenant is paying a rent less than the maximum rent, the administrator, upon request of the landlord, may reduce the maximum rent of the housing accommodation to the amount actually being paid, or to the highest maximum rent for comparable controlled housing accommodations in the structure, whichever is higher. If, as determined by the administrator, the landlord has not been fully compensated by increases in rental income from the controlled housing accommodations sufficient to offset such increases in operating costs as are allocable to such controlled housing accommodations the administrator shall grant an adjustment in the maximum rents.

(8)Other necessary adjustments of maximum rents not inconsistent with the purposes of the act or regulations. Where the administrator finds in considering an application of the landlord, that adjustments of maximum rents on grounds other than those set forth in paragraph (1), (2), (3), (4), (5), (6) or (7) of this subdivision are not inconsistent with the purposes of the act or these regulations, and such adjustments are necessary to maintain a system of rent controls at levels which are generally fair and equitable, the administrator may issue orders increasing the maximum rents by the amounts of such adjustments. The total adjustments of maximum rents for any housing accommodation in any 12-month period under this paragraph shall not exceed 15 percent of the maximum rent in effect on the date of the first order granting an adjustment in said 12-month period. The administrator may waiver this limitation because of unique and peculiar circumstances, where he finds such waiver is not inconsistent with the purposes of the act or this Part.

(9)Validation of increases legally authorized pursuant to the Emergency Tenant Protection Act in the City of Mount Vernon prior to the effectuation of the reimposition of regulation pursuant to the Emergency Housing Rent Control Law. A landlord who was authorized to collect a rental adjustment by lease offered prior to July 15, 1983 pursuant to the Emergency Tenant Protection Act in accordance with the rent guidelines authorized by the Westchester County Rent Guidelines Board for guideline year 1982-1983, may continue to collect such rental increases provided that the landlord was not at the same time collecting an increase pursuant to paragraph (8) of this subdivision, and provided further that he makes a valid and authorized application in accordance with paragraph (8) of this subdivision as implemented by Operational Bulletin 110 on or before September 1, 1983. The rental adjustment received pursuant to paragraph (8) of this subdivision will be inclusive of those increases received pursuant to this section and shall not be in addition thereto.

9 NYCRR 2102.4 - Grounds for decrease of maximum rent

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

The administrator at any time, on his own initiative, or on application of the owner or tenant, may order a decrease of the maximum rent otherwise allowable, only on the grounds that:

(a)

(1)Where a maximum rent has been established for a housing accommodation, other than in a rooming house, pursuant to section 2101.1(d) of this Title, and the landlord has filed a proper and timely registration statement pursuant to section 2103.3 of this Title, the administrator may order a decrease in the maximum rent where such maximum rent is substantially higher than the maximum rents for comparable housing accommodations, giving due consideration to any factors bearing on the equities involved.

(2)Where a maximum rent has been established for housing accommodations in rooming houses pursuant to section 2101.1(d), (e) or (h) of this Title, and the landlord has filed a proper and timely registration statement pursuant to section 2103.3 of this Title, the administrator may order a decrease in the maximum rent where such maximum rent is substantially higher than the maximum rents for comparable accommodations. Such comparability shall be limited to comparable accommodations in the same establishment, if any. The administrator may also order a decrease in the maximum rent where such maximum rent is based on a change in the number of occupants or the terms of occupancy and is higher than the amount by which the landlord customarily varied the rent for such number of occupants or terms of occupancy as reflected by the maximum rents for such rooms or units and terms of occupancy in effect on March 1, 1950, and where the landlord had no such customary variation and the maximum rent established upon a change in the number of occupants or the terms of occupancy is more than the rental value of such changed occupancy. In all such cases the administrator may take into consideration any factors bearing on the equities involved.

(b)There has been a substantial deterioration of the housing accommodations because of the failure of the landlord to properly maintain the same, or there has been a decrease in the dwelling space, essential services, furniture, furnishings or equipment required under section 2101.5 of this Title. It shall be no defense to an application to decrease the maximum rent that furniture or furnishings were removed on or after May 1, 1955 from a furnished housing accommodation with the consent of the tenant.

(c)A municipal department having jurisdiction certifies that the housing accommodation is a fire hazard or is in a continued dangerous condition or detrimental to life or health, or is occupied in violation of law.

(d)Under subdivision (b) of this section, the maximum rent of the housing accommodations shall be decreased by that amount which the administrator finds to be the reduction in the rental value of the housing accommodations because of the substantial deterioration or decrease in dwelling space, essential services, furniture, furnishings or equipment. The administrator may, however, take into consideration all factors bearing on the equities involved.

(e)Notwithstanding any other provision of this Subchapter, where a maximum rent has been established for a housing accommodation in a rooming house, the administrator may order a decrease in the maximum rent, having regard for any factors bearing on the equities involved, consistent with the purposes of the act to correct speculative, abnormal and unwarranted increases in rent.

(f)

(1)No increase in maximum rent pursuant to these regulations shall be collected from a tenant to whom there has been issued a tax abatement certificate pursuant to section 467-b of the Real Property Tax Law as amended by chapter 689, Laws of New York, 1972 (tax abatement for rent controlled property occupied by senior citizens) except as may be prescribed in such certificate.

(2)The administrator, upon application by the tenant on prescribed forms shall issue such tax abatement certificate where he finds that the tenant is eligible. A tenant shall be eligible for such tax abatement certificate if the requirements of section 467-b of the Real Property Tax Law amended by chapter 689 are complied with, and the governing body of the city, town, or village wherein the housing accommodations are located has adopted a local law, ordinance, or resolution in accordance with the provisions of said section.

(g)The amount of the reduction in maximum rent ordered by the administrator pursuant to subdivision (b) of this section shall be reduced by any credit, abatement or offset in rent which the tenant has received pursuant to section 235-b of the Real Property Law, that relates to one or more conditions covered by such order

(h)There has been an approved conversion from master metering of electricity, with the cost of electricity included in the rent, to individual metering of electricity, with the tenant paying separately for electricity, and is in amounts set forth in a schedule of rent reductions for different- sized rent controlled housing accommodations included in Operational Bulletin 2003-1 governing electrical conversions issued pursuant to this subdivision and section 2109.8 of this Title by DHCR, 92-31 Union Hall Street, Jamaica, Queens, New York, and available at DHCR's website at www.dhcr.state.ny.us, and determined as follows:

(1)Direct metering. Where the conversion is to direct metering of electricity, with the tenant purchasing electricity directly from a utility, such schedule of rent reductions is based on the median monthly cost of electricity to tenants derived from data from the United States Census Bureau's 2002 New York City Housing and Vacancy Survey, as tabulated by the New York City Rent Guidelines Board, 51 Chambers Street, Suite 202, New York, NY, and available on its website at www.housingnyc.com, and as further adjusted where appropriate to reflect differences in electric rates outside New York City. The charge for electricity is not part of the maximum rent and is not subject to this Subchapter. The resolution of any dispute arising from the billing or collection of such charge is not within the jurisdiction of the commission. A conversion to direct metering is required to include rewiring the building unless the owner can establish that rewiring is unnecessary.

(2)Submetering. Where the conversion is to submetering of electricity, with the tenant purchasing electricity from the owner or a contractor retained by the owner, who purchases electricity from a utility at the bulk rate, such schedule of rent reductions is based on the median monthly cost of electricity to tenants derived from data from the United State's Census Bureau's 2002 New York City Housing and Vacancy Survey, as tabulated by the New York City Rent Guidelines Board, 51 Chambers Street, Suite 202, New York, NY, and available on its website at www.housingnyc.com, adjusted to reflect the bulk rate for electricity plus a reasonable service fee for the cost of meter reading and billing, based on the maximum estimated fee included in the Residential Submetering Manual revised October 2001, published by the New York State Energy Research and Development Authority, 17 Columbia Circle, Albany, NY, and available on its website at www.nyserda.org, and further adjusted where appropriate to reflect differences in electric rates outside New York City, and reflected in Operational Bulletin 2003-1. The owner or contractor retained by the owner is not permitted to charge the tenant more than the bulk rate for electricity plus a reasonable service charge for the cost of meter reading and billing. The charge for electricity as well as any related service surcharge is not part of the maximum rent and is not subject to this Subchapter. The resolution of any dispute arising from the billing or collection of such charge or surcharge is not within the jurisdiction of the commission. A conversion to submetering does not require rewiring the building provided the owner submits an affidavit sworn to by a licensed electrician that the existing wiring is safe and of sufficient capacity for the building.

(3)Recipients of senior citizen rent increase exemptions (SCRIE) or disability rent increase exemptions (DRIE). For a tenant who on the date of the conversion is receiving a SCRIE or DRIE authorized by local law, the rent is not reduced and the cost of electricity remains included in the rent, although the owner is permitted to install any equipment in such tenant's housing accommodation as is required for effectuation of electrical conversion pursuant to this paragraph.

(i)After the conversion, upon the vacancy of the tenant, the owner, without making application to the commission, is required to reduce the maximum rent for the housing accommodation in accordance with the schedule of rent reductions set forth in Operational Bulletin 2003-1, and thereafter any subsequent tenant is responsible for the cost of his or her consumption of electricity, and for the legal rent as reduced, including any applicable major capital improvement rent increase based upon the cost of work done to effectuate the electrical conversion.

(ii)After the conversion, if a tenant ceases to receive a SCRIE or DRIE, the owner, without making application to the commission, may reduce the rent in accordance with the schedule of rent reductions set forth in Operational Bulletin 2003-1, and thereafter the tenant is responsible for the cost of his or her electricity, and for the legal rent as reduced, including any applicable major capital improvement rent increase based upon the cost of work done to effectuate the electrical conversion, for as long as the tenant is not receiving a SCRIE or DRIE. Thereafter, in the event that the tenant resumes receiving a SCRIE or DRIE, the owner, without making application to the commission, is required to eliminate the rent reduction and resume responsibility for the tenant's electric bills.

(4)Every three years, upon the publication of a new housing vacancy survey, and tabulation of the survey data by the New York City Rent Guidelines Board, DHCR shall issue a new operational bulletin governing electrical conversions setting forth rent reductions based on the new survey data, and shall move to amend the regulations to incorporate by reference the new Operational Bulletin, Housing Vacancy Survey, and Rent Guidelines Board Tabulation. At such time as New York State Energy Research and Development Authority issues a new residential electric submetering manual setting forth a new maximum estimated submetering service fee, DHCR shall move to amend the regulations to incorporate that document by reference.

(i)

(1)Certain conditions complained of as constituting a substantial deterioration of a housing accommodation because of a reduction in an essential service may be de minimis in nature, and therefore do not rise to the level of a failure to maintain an essential service for the purposes of this section. Such conditions are those that have only a minimal impact on tenants, do not affect the use and enjoyment of the premises, and may exist despite regular maintenance of services.

The following schedule sets forth conditions that will generally not constitute a failure to maintain an essential service. However, this schedule is not intended to be exclusive, and is not determinative in all cases and under all circumstances. Therefore, it does not include all conditions that may be considered de minimis, and there may be circumstances where a condition, although included on the schedule, will nevertheless be found to constitute a decrease in an essential service.

SCHEDULE OF DE MINIMIS CONDITIONS

BUILDING-WIDE CONDITIONS

1.AIR CONDITIONING:

Failure to provide in lobby, hallways, stairwells, and other non-enclosed public areas.

2.BUILDING ENTRANCE DOOR:

Removal of canopy over unlocked door leading to vestibule; changes in door-locking devices, where security or access is not otherwise compromised.

3.CARPETING:

Change in color or quality under certain circumstances; isolated stains on otherwise clean carpets; frayed areas which do not create a tripping hazard.

4.CLOTHESLINES:

Removal of, whether or not dryers are provided.

5.CRACKS:

Sidewalk cracks which do not create a tripping hazard; hairline cracks in walls and ceilings.

6.DECORATIVE AMENITIES:

Modification (e.g., fountain replaced with rock garden); removal of some or all for aesthetic reasons.

7.ELEVATOR:

Failure to post elevator inspection certificates; failure to provide or maintain amenities (e.g., ashtray, fan, recorded music).

8.FLOORS:

Failure to wax floors; discrete areas in need of cleaning or dusting, where there is evidence that janitorial services are being regularly provided and most areas are clean (See JANITORIAL SERVICES, item 12).

9.GARAGE:

Any condition that does not interfere with the use of the garage or an assigned parking space (e.g., peeling paint where there is no water leak).

10.GRAFFITI:

Minor graffiti inside the building; any graffiti outside the building where the landlord submits an "affidavit of on-going maintenance" indicating a reasonable time period when the specific condition will be next addressed.

11.LANDSCAPING:

Modification; failure to maintain a particular aspect of landscaping where the grounds are generally maintained.

12.JANITORIAL SERVICES:

Failure to clean or dust discrete areas, where there is evidence that janitorial services are being regularly provided because most areas are, in fact, clean.

13.LIGHTING IN PUBLIC AREAS:

Missing light bulbs where the lighting is otherwise adequate.

14.LOBBY OR HALLWAYS:

Discontinuance of fresh cut flowers; removal of fireplace or fireplace andirons; modification of furniture; removal of some furnishings (determined on a case by case basis); removal of decorative mirrors; reduction in lobby space where reasonable access to tenant areas are maintained; elimination of public area door mat; failure to maintain a lobby directory that is not associated with a building intercom; removal or replacement of window coverings (See DECORATIVE AMENITIES, item 6).

15.MAIL DISTRIBUTION:

Elimination of door-to-door or other methods of mail distribution where mailboxes are installed in a manner approved by the U.S. Postal Service.

16.MASONRY:

Minor deterioration; failure to point exterior bricks where there is no interior leak damage.

17.PAINTING:

Change in color in public areas under certain circumstances (e.g., not in violation of the New York City Housing Maintenance Code); replacement of wallpaper or stenciling with paint in the public areas; isolated or minor areas where paint or plaster is peeling, or other similarly minor areas requiring repainting, provided there are no active water leaks; any painting condition in basement or cellar areas not usually meant for or used by tenants; any painting condition that is limited to the top-floor bulkhead area provided there is no active water leak in such area.

18.RECREATIONAL FACILITIES:

Modifications, such as reasonable substitution of equipment, combination of areas, or reduction in the number of items of certain equipment where overall facilities are maintained (See ROOF, item 19).

19.ROOF:

Discontinuance of recreational use (e.g., sunbathing) unless a lease clause provides for such service, or formal facilities (e.g., solarium) are provided by the landlord; lack of repairs where water does not leak into the building or the condition is not dangerous.

20.SINKS:

Failure to provide or maintain in compactor rooms or laundry rooms.

21.STORAGE SPACE:

Removal or reduction of, unless storage space service is provided for in a specific rider to the lease (not a general clause in a standard form residential lease), or unless the landlord has provided formal storage boxes or bins to tenants within three years of the filing of a tenant's complaint alleging an elimination or a reduction in storage space service.

22.SUPERINTENDENT MAINTENANCE STAFF MANAGEMENT:

Decrease in the number of staff, other than security, provided there is no decrease in janitorial services; elimination of on-site management office; failure to provide an on-site superintendent, provided there is no decrease in janitorial services.

23.TELEVISION:

Replacement of individual antennas with master antenna; visible cable; television wires; or other technologies.

24.TOILET IN PUBLIC AREAS:

Removal of (except in buildings containing Class B units).

25.WINDOWS:

Sealed, vented, basement or crawl space windows, other than in areas used by tenants (e.g., laundry rooms); cracked fire-rated windows; peeling paint or other non-hazardous condition of exterior window frames.

INDIVIDUAL APARTMENT CONDITIONS

1.APPLIANCES AND FIXTURES:

Chips on appliances, countertops, fixtures or tile surfaces; color-matching of appliances, fixtures or tiles.

2.CRACKS:

Hairline cracks; minor wall cracks, provided there is no missing plaster, or no active water leak.

3.DOORS:

Lack of alignment, provided condition does not prevent proper locking of entrance door or closing of interior door.

4.FLOOR:

Failure to provide refinishing or shellacking.

5.NOISE:

Caused by another tenant.

6.WINDOW FURNISHINGS:

Failure to re-tape or re-cord venetian blinds.

(2)In determining whether a condition is de minimis, the administrator may consider the passage of time during which a disputed service was not provided and during which no complaint was filed by any tenant alleging failure to maintain such disputed service, as evidencing that such service condition is de minimis, and therefore does not constitute a failure to maintain an essential service, provided that:

(i)for purposes of this subdivision, the passage of four years or more shall be considered presumptive evidence that the condition is de minimis, with such four-year period to be measured without reference to any changes in building ownership or the tenancy of the subject housing accommodation;

(ii)services required to be provided by laws or regulations other than the Rent Law and this Subchapter shall not be subject to this subdivision.

(3)

(i)Except as to complaints of inadequate heat and/or hot water, or applications relating to the restoration of rents based upon the restoration of such services, whenever a complaint of building-wide reduction in services, or a landlord's application relating to the restoration of rents based upon the restoration of such services is filed, the tenants or owner may submit with the complaint, answer or application, the contemporaneous affidavit of an independent licensed architect or engineer, substantiating the allegations of the complaint, answer, or application. The affidavit shall state that the conditions that are the subject of the complaint, answer or application were investigated by the person signing the affidavit and that the conditions exist (if the affidavit is offered by the tenants) or do not exist (if the affidavit is offered by the landlord). The affidavit shall specify what conditions were investigated and what the findings were with respect to each condition. The affidavit shall state when the investigation was conducted, must be submitted within a reasonable time after the completion of the investigation, and when served by the administrator on the opposing party, will raise a rebuttable presumption that the conditions that are the subject of the complaint, answer or application exist (if the affidavit is submitted by the tenants), or do not exist (if the affidavit is submitted by the landlord).

(ii)The presumption raised by the affidavit may be rebutted only on the basis of persuasive evidence, including a counter affidavit by an independent licensed architect or engineer, or a report of a subsequent inspection conducted, or a subsequent violation imposed by a governmental agency, or an affirmation signed by 51 percent of the complaining tenants. Except for good cause shown, failure to rebut the presumption within 30 days will result in the issuance of an order without any further physical inspection of the premises by the administrator.

(iii)There must be no common ownership, or other financial interest, between such architect or engineer, and the landlord or tenants, and the affidavit shall state that there is no such relationship or other financial interest. The affidavit must also contain a statement that the architect or engineer did not engage in the performance of any work, other than the investigation, relating to the conditions that are the subject of the affidavit, and must contain the original signature and professional stamp of the architect or engineer, not a copy. The administrator may conduct follow-up inspections randomly to ensure that the affidavits accurately indicate the conditions of the premises. Any person or party who submits a false statement will be subject to all penalties provided by law.

9 NYCRR 2102.5 - Decrease of services: application, order or report

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

(a)

(1)Until the accommodations become vacant the landlord shall maintain the same dwelling space, essential services, furniture, furnishings and equipment as required under section 2101.5 of this Title unless and until he has filed an application to decrease the dwelling space, essential services, furniture, furnishings, or equipment and an order permitting a decrease has been entered thereon by the administrator.

(2)On or after May 1, 1955 the removal of furniture or furnishings from housing accommodations rented as furnished, whether or not such removal is consented to by the tenant, shall constitute a decrease in service.

(b)When the accommodations become vacant the landlord may prior to renting to a new tenant decrease the dwelling space, essential services, furniture, furnishings, or equipment. Within 10 days after so renting, the landlord shall file a written report with the local rent administrator showing such decrease.

(c)The order on any application under subdivision (a) of this section may require an appropriate decrease in the maximum rent. Any maximum rent for which a report is required by subdivision (b) of this section may be decreased in accordance with the provisions of section 2102.4 of this Part.

(d)If the landlord shall have failed to file an application or a proper and timely report, as required by subdivision (a) or (b) of this section, the maximum rent shall be deemed in doubt and the administrator may issue an order fixing the maximum rent pursuant to section 2102.6 of this Part.

9 NYCRR 2102.6 - Orders where the maximum rent or other facts are in dispute, in doubt, or not known, or where maximum rent must be fixed

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

(a)Where the maximum rent or any fact necessary to the determination of the maximum rent, or the dwelling space, essential services, furniture, furnishings or equipment required to be provided with the accommodation, is in dispute between the landlord and the tenant, or is in doubt, or is not known, or is prescribed by section 2101.1(i) or (j) of this Title, the administrator at any time upon written request of either party, or on his own initiative, may issue an order determining the facts including the amount of the maximum rent, the dwelling space, essential services, furniture, furnishings and equipment, required to be provided with the accommodations. Such order shall determine such facts or establish the maximum rent as of May 1, 1950 or the date of first renting, whichever is later, except where the maximum rent is prescribed by section 2101.1(i) or (j) of this Title. Where such order establishes the maximum rent it may contain a directive that all rent collected by the landlord in excess of the maximum rent established under this subdivision for a period not exceeding two years prior to the date of its issuance shall be refunded to the tenant within 30 days after such order shall become final. Where the maximum rent is prescribed by section 2101.1(i) of this Title, the administrator shall determine the date upon which the housing accommodations became subject to this Subchapter and establish the maximum rent on the basis of the rent charged on January 1, 1957 or the date of first renting, whichever is later.

(b)Where the landlord has failed to file an application or report required by section 2102.5(a) and (b) of this Part, the administrator at any time upon written request of either party, or on his own initiative, may issue an order establishing the maximum rent by decreasing the previous maximum rent of the housing accommodations by that amount which the administrator finds to be the reduction in the rental value of the housing accommodations because of the decrease in dwelling space, essential services, furniture, furnishings or equipment. The administrator may take into consideration all factors bearing on the equities involved. Such order shall establish the maximum rent as of the date of decrease of such dwelling space, essential services, furniture, furnishings or equipment or as of May 1, 1950, whichever is later, and may contain a directive that all rent collected by the landlord in excess of the maximum rent established under this subdivision for a period not exceeding two years prior to the date of its issuance shall be refunded to the tenant within 30 days after such order shall become final.

(c)Where no registration statement had been filed prior to May 1, 1950 under the Federal Act, or after that date as is required by this Subchapter, the administrator at any time upon written request of either party, or on his own initiative, may, when he cannot determine the maximum rent pursuant to subdivision (a) of this section, issue an order fixing a maximum rent which may be established on the basis of the maximum rent for comparable housing accommodations. Where there are maximum rents in effect in the same establishment, these may be used as comparable housing accommodations, in the discretion of the administrator. In cases of a change in the number of occupants or terms of occupancy in rooming houses, the maximum rent may be established upon the basis of the amount by which the landlord has customarily varied his rent for such change in the number of occupants or terms of occupancy as reflected in the maximum rents in effect on March 1, 1950. Where the landlord has no customary variation the administrator may issue an order fixing the maximum rent for such rooms, units or occupancy based upon the rental value of the change in occupancy or in terms of occupancy, after taking into consideration the previous maximum rent therefor. The administrator may take into consideration all factors bearing on the equities involved. Such order shall fix the maximum rent as of May 1, 1950, or the date of first renting, whichever is later, and may contain a directive that all rent collected by the landlord in excess of the maximum rent established under this subdivision for a period not exceeding two years prior to the date of its issuance shall be refunded to the tenant within 30 days after such order shall become final.

(d)Where no proper or timely registration statement has been filed as is required by this Subchapter, the administrator may issue an order fixing a maximum rent on the basis of the maximum rents for comparable housing accommodations, as set forth more specifically in subdivision (c) of this section, after taking into consideration all other factors bearing on the equities involved. Such order shall be effective as of May 1, 1950, or the date of such first renting, whichever is later, and may contain a directive that all rent collected by the landlord in excess of the maximum rent established under this subdivision for a period not exceeding two years prior to the date of its issuance shall be refunded to the tenant within 30 days after such order shall become final, provided the administrator shall have instituted a proceeding to establish such maximum rent by May 1, 1952, or within three months from the time of filing of such registration statement, whichever is later. If the administrator fails to institute a proceeding to establish such maximum rent by May 1, 1952 or within three months from the time of filing of such registration statement, whichever is later, any order issued fixing the maximum rent under this subdivision shall be effective as of the date of the issuance of the order.

(e)Where it is necessary for the administrator to determine whether an establishment which was a hotel on March 1, 1950 is still a hotel, the administrator shall issue an order determining such fact. Where the administrator finds that an establishment is no longer a hotel, he shall issue orders fixing maximum rents for the housing accommodations within such establishment which were not subject to rent control. The maximum rents so fixed shall be based upon the maximum rents for comparable housing accommodations taking into consideration all factors bearing upon the equities. Such orders shall be effective as of the date of issuance.

9 NYCRR 2102.7 - Order where an apartment is rented to more than one tenant

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

(a)On and after February 1, 1952, where an apartment, in whole or in part, is rented or sought to be rented to more than one tenant, a landlord shall file an application with the administrator to fix maximum rents for the units or portions of such apartment. Such application shall set forth the present maximum rent for the apartment, the furniture, furnishings, facilities, equipment and other services added or proposed to be added, the number of occupants, and the space to be occupied by each tenant in such apartment, the terms and conditions of occupancy, and all other data which may be required by the administrator. In fixing the maximum rent the administrator shall apportion the previous maximum rent for the entire apartment among the tenants in proportion to the space they occupy, and shall add thereto the increased rental value of any furniture, furnishings, facilities and equipment added by the landlord. Where the landlord has satisfied all of the requirements of the authorities having jurisdiction over the physical conversion and over the occupancy of the changed housing accommodations the administrator, in fixing maximum rents for individual tenants, shall also take into consideration all factors bearing on the equities involved including the cost of any physical conversion or alteration. If there was no previous maximum rent for the entire apartment, the administrator shall establish a maximum rent for the entire apartment based upon the rents generally prevailing for comparable housing accommodations prior to apportioning the maximum rent for the entire apartment among the tenants as hereinbefore provided. Unless and until an order is issued by the administrator fixing maximum rents for the individual tenants of the apartment, the aggregate maximum rent for all of the tenants in the apartment shall be the maximum rent previously established for the apartment. All orders issued under this section shall be effective as of the date of first renting.

(b)Where no application has been made under this section the administrator at any time upon written request of a tenant, or on his own initiative, may issue an order pursuant to this section fixing a maximum rent for each of the individual tenants in the apartment effective as of the date of such renting. In fixing such maximum rents for the individual tenants, the administrator shall use the standards prescribed in subdivision (a) of this section. Such order may contain a directive that all rent collected by the landlord in excess of the maximum rent established under this subdivision for a period not exceeding two years prior to the date of its issuance shall be refunded to the tenant within 30 days after such order shall become final.

9 NYCRR 2102.8 - Rent adjustments upon succession

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

Where all tenants occupying a housing accommodation on June 19, 1997 have permanently vacated such housing accommodation, and a primary-resident family member of such vacating tenant or tenants (first successor) is entitled to and continues to occupy the housing accommodation subject to the protection of this Subchapter, as provided in section 2104.6 of this Title, and thereafter permanently vacates the housing accommodation, if such accommodation continues to be subject to the act and this Subchapter after such family member vacates, and a primary-resident family member (second successor) is entitled to and continues to occupy the housing accommodation subject to the protections of this Subchapter, as provided in section 2104.6 of this Title, the maximum collectible rent shall be increased by a sum equal to the allowance then in effect for vacancy leases for housing accommodations subject to the Rent Stabilization Law of 1969, including the amount allowed by paragraph 5-a of subdivision c of section 26-511 of such law. Such increase shall be in addition to any other increases provided for in this Subchapter, including adjustments pursuant to section 2102.3 of this Part, and shall be applicable in like manner to the maximum collectible rent that may be charged each second subsequent succeeding family member.

9 NYCRR 2102.9 - Surcharge for the installation and use of washing machines, dryers and dishwashers

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

(a)Where a tenant requests permission from the landlord to install a washing machine, dryer or dishwasher, whether permanently installed or portable, and the landlord consents, the landlord may collect surcharges, without notification to or approval by the administrator in an amount specified in an operational bulletin to be issued by the administrator pursuant to section 2109.8 of this Title. The surcharges authorized by this section shall not be part of the maximum rent.

(b)

(1)Where a prior installation by a tenant of a washing machine, dryer or dishwasher comes to the attention of the landlord and the landlord consents to the continued use of the washing machine, dryer or dishwasher, the surcharges provided for in this section shall only be available prospectively.

(2)Under no circumstances shall servicing or replacement of such washing machine, dryer or dishwasher become a service required to be provided by the landlord pursuant to this Subchapter.

(3)Where there is in effect a prior practice of charging for installation of a tenant-owned washing machine, dryer or dishwasher, the landlord may continue the charge, which may also continue to be included in the maximum rent, if such was the prior practice.

9 NYCRR 2102.10 - Surcharges for submetered electricity or other utility service

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

Where a landlord acts as a provider of a utility service (including, but not limited to electricity, gas, cable, or telecommunications), the landlord may collect surcharges which shall not be part of the maximum rent, and shall not be subject to this Subchapter.

9 NYCRR 2102.11 - Schedule

Later State Register activity may affect this section.

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021
Related Register notice: HCR-35-22-00006-P · Proposed rule
Related notice published: Aug 31, 2022

(a)The reasonable costs that may be recovered for qualified major capital improvements (MCI) may not exceed the recoverable costs, as determined by DHCR. In making such determination, DHCR shall refer to such reasonable costs as specified in the reasonable cost schedule found in Operational Bulletin 2020-1. The reasonable cost schedule shall provide the recoverable cost of MCIs that fall within the following main three categories:

(1)Major systems:

(i)The maximum recoverable costs shall be presented for the following classes of work:

(a)plumbing;

(b)gas repipe;

(c)wiring;

(d)windows;

(e)boiler/burner;

(f)hot water heater;

(g)elevator replacement; and

(h)elevator modernization.

(2)Façade, parapet, roof:

(i)The maximum recoverable costs shall be presented for the following classes of work:

(a)façade;

(b)parapet; and

(c)roof.

(3)Other systems:

(i)The maximum recoverable costs shall be presented for the following classes of work:

(a)chimney;

(b)doors;

(c)security system; and

(d)intercom; and may include such other systems as DHCR may determine.

(b)Each class of MCI may list more detailed types of capital improvement work. Each class of MCI described in the schedule may be inclusive of additional cost that can be associated with the type of improvements listed within such class.

(c)The costs of each type of MCI work will be listed as per unit, per unit of measurement or per piece of equipment as is appropriate given the nature of the improvement.

(d)The maximum recoverable costs for each type of MCI specified in the initial reasonable cost schedule shall be based on a survey of such construction costs undertaken for such installation. The maximum recoverable costs listed in the reasonable cost schedule shall be initially published and made available for public review and comment in conjunction with the promulgation process required for adoption of this regulation.

(e)Periodic review of reasonable cost schedule.

Every year after adoption of this regulation, DHCR shall conduct a new survey to assess the categories of major capital improvements, the classes of work within categories eligible for major capital improvements and the maximum recoverable costs listed for the types of MCI costs identified in the reasonable cost schedule.

(f)Procedure.

(1)When applying for a temporary MCI rent increase, owners are required to submit an itemized list of work performed with a description or explanation of the reason or purpose of such work. Costs may be granted for related expenses that are not specified in the actual schedule, if they are found to be within or below the maximum costs for the class of work, are necessary for the claimed improvement, and eligible for reimbursement as an MCI. Costs will not be granted for expenses which are ineligible for MCI rent increases. Only the actual amounts expended by owners for qualifying MCI costs will be the basis for any temporary MCI rent increase. Qualifying owners will, therefore, be awarded a temporary MCI rent increase on the lesser of either:

(i)the actual amount expended; or

(ii)the maximum reasonable cost from the schedule, and such other additional items that are eligible as an MCI but are not listed as part of the reasonable cost schedule.

(2)The schedule provides a maximum of costs that can be granted for eligible MCIs. All costs granted for a temporary MCI rent increase must be actual, reasonable, verifiable, and meet all other regulatory requirements.

(g)Waiver of application of reasonable cost schedule.

Owners may apply for a waiver of application of the reasonable cost schedule. Pursuant to the requirements specified below, such application must demonstrate that:

(1)the claimed costs underlying the temporary MCI rent increase either:

(i)are not identified in the reasonable cost schedule, or are necessarily and appropriately priced higher than those costs listed in the reasonable cost schedule, and such costs are accurate and reasonable under the circumstances; or

(ii)that use of the reasonable cost schedule will cause an undue hardship and the use of alternative procedures are appropriate to the interests of the owner, the tenants, and the public, and the costs of such improvement are reasonable and accurate under the circumstances. Owners must request a waiver of the use of the reasonable cost schedule in writing and accompany the application with the information and documentation as specified in subparagraph (i) of this paragraph.

(h)Categories of waiver.

At the time of initial application for an MCI, an owner may apply for, and the DHCR may grant, a waiver of application of the reasonable cost schedule where the owner meets any of the following criteria:

(1)Non-landmarked buildings (buildings not designated by the Landmark Commission).

(i)A licensed engineer or architect must certify that:

(a)the MCI costs for which owner seeks a temporary MCI rent increase are accurate and reasonable under the circumstances;

(b)there is no common ownership or other financial interest between the contractor installing the replacement or upgrade and the ownership entity of the owner; and

(c)a bid process was conducted and supervised by a licensed architect or engineer.

(2)Landmarked buildings (buildings designated by the Landmark Commission). Any eligible MCI work and the costs therefore were the result of any law, regulation, rule, or requirement under which the premises have been designated a landmark building.

(3)Capital improvement work performed while also under another governmental agency’s supervision. DHCR will also accept the cost of contract where:

(i)the building is subject to both:

(a)the Rent Stabilization Law;

(b)another housing program; and

(ii)the contract is approved by or awarded under the supervision of a state, city or local housing entity in conjunction with that affordable housing program; and

(iii)such supervision includes a process by which such supervising agency reviews the costs to assure they are reasonable.

(4)Emergency capital improvements. DHCR will also accept the cost of contract where capital improvements were performed to remedy an emergency condition and for which the owner paid more than the reasonable costs due to such emergency situation, but the costs are actual and verifiable.

(5)Interim rules. An owner may apply for a waiver of application of the reasonable cost schedule if, prior to the effective date of this subdivision, it has either entered a contract for the performance of MCI work within two years before final promulgation of this regulation, or submitted to DHCR an application for a temporary MCI rent increase. The recoverable costs will be determined according to the reasonable cost schedule and these provisions, but the owner need not submit evidence of compliance with the bidding requirements set forth in paragraph (i)(2) of this section; owner may instead use alternative means of establishing the reasonableness of the MCI costs sought to be recovered as directed by DHCR as part of the processing of such application.

(6)For pending MCI applications, an owner must make this waiver application within 60 days of the final promulgation of this regulation, unless in the context of processing the MCI application the owner is directed by DHCR to submit an application for waiver at an earlier date.

(i)Waiver procedure.

As part of the written waiver application for non-emergency capital improvements, owners must submit the following:

(1)A certification by a licensed architect or engineer stating that:

(i)the purchases and contracts, whose costs owner seeks to recover have been awarded on the basis of analysis and bidding to the fullest extent possible, but with no less than three bidders having been solicited to perform the work unless the owner can demonstrate that the work is so highly specialized that such bids cannot be extended;

(ii)list of items for which owner solicited bids were necessary;

(iii)the costs claimed by owner for the MCI work are accurate and reasonable, provided that the architect or engineer’s basis for such conclusion is credibly supported;

(iv)all changes to the original agreed upon scope of work were necessary to the underlying MCI and reasonably priced; and

(v)the owner selected the lowest responsible bidder or the bidder best suited to perform the MCI work, provided that the architect or engineer’s basis for such conclusion is credibly supported.

(2)Certification by owner that it has complied with bid process requirements including submission of:

(i)tabulation of all bids received; and

(ii)copies of all bids received; and

(iii)a certification by each bidder disclosing whether the owner or any board member, general partner, officer or employee of owner, and/or principal or employee of any managing agent retained by owner, has a direct or indirect interest in the bidder or in the compensation to be received by the bidder pursuant to the proposed contract. Failure to accurately and fully complete this certification may result in the rejection of the bid for purposes of determining owner’s application for waiver of the use of the reasonable cost schedule, as well as rejection and a dismissal of the MCI application; and

(iv)detailed description of the items for which owner initially solicited bids.

(3)A certification by the owner’s architect or engineer certifying the necessity, appropriateness, and reasonableness of the costs of all changes to the original agreed upon scope of work that were performed in connection with the MCI, along with a description of the changes in the scope, price, or time of completion of the work related to each change order.

(j)For emergency capital improvement MCI applications.

The owner must submit a statement from an independent engineer or architect describing the emergency, why the costs were greater than those in the schedule, that the costs were reasonable for the situation, and why the owner could not obtain three bids in a timely manner due to the exigent circumstances.

(k)Notice.

As part of the MCI application process, any request by an owner for a waiver of application of the reasonable cost schedule, shall be made available to the tenants of the subject building(s) with an opportunity to comment on and contest the waiver.

(l)Denial of waiver.

If an owner’s application for a waiver is denied, the owner’s recoupment shall be limited to that required by the reasonable cost schedule together with such other relief as may be appropriate. Approval of the waiver does not assure that the application will be granted, that it will not be modified, or that items submitted will not be disallowed, in whole or in part, as all other requirements and proof set forth in this paragraph must be met.

(m)Operational bulletin.

The initial Operational Bulletin 2020-1 including all amendments, shall be issued pursuant to this paragraph and section 2527.11 of this Title. The Operational Bulletin 2020-1 and all amended versions shall be available in hardcopy form at 92-31 Union Hall Street, Jamaica, Queens, New York, and will be available on DHCR's website at www.hcr.state.ny.us (www.hcr.ny.gov).

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