DHCR Formally Adopts Rent Stabilization Code Amendments
On Jan. 8, the DHCR officially adopted amendments to the Rent Stabilization Code. The amendments were the end product of the formal process required under the New York State Administrative Procedure Act to amend various regulations in the Rent Stabilization Code, the Tenant Protection Regulations, and the State and New York City Rent Control Regulations. The following are the most significant amendments to the Rent Stabilization Code:
Tenant Protection Unit. The TPU is designated as a distinct unit under the DHCR with a mission “to investigate and prosecute violations” of the rent laws [9 NYCRR §2520.5 paragraphs (o) and (p) are re-lettered (p) and (q), and a new paragraph (o) is added].
First deregulated tenant. Owners are required to provide the first deregulated tenant with an exit notice explaining how the unit became deregulated, how the rent was computed, and what the last legal rent was. The owner must provide the first deregulated tenant with a copy of the rent registration indicating the deregulated rent [9 NYCRR §2520.11 new paragraph (u) is added].
Preferential rents. Preferential rents are required to be disclosed in the lease, and the owner is required to maintain and submit, where required by the DHCR, the rental history immediately preceding a preferential rent to the present, which may be prior to the four-year period preceding the filing of a complaint [9 NYCRR 2521.2(b) is amended, 9 NYCRR §2521.2(b)(2) is repealed, and 9 NYCRR §2521.2(c) is amended].
Major capital improvements. There will be no MCI rent increases for conversions from master metering to individual metering; however, electrical wiring for the building can be subject to an MCI rent increase [9 NYCRR §2522.4(a)(3)(22)].
When an MCI application is received, the DHCR will initiate its own search to determine if there’s an "immediately hazardous" violation in a building and, if there is such a violation, the application will be rejected with leave to renew once the violation is remedied [9 NYCRR §2522.4(a)(13)].
Individual apartment improvements. Additional information is required in leases as to how the rent was calculated, including details regarding any individual apartment improvement rent increases.
Tenants will be able to request documentation from owners to support an IAI increase.
If the lease information and/or any requested IAI documents aren’t provided, there can be no rent increase until the information/documentation is provided, unless the owner can prove the rent charged is otherwise legal.
If the rent charged is above the legal rent during the period when information/documentation is not provided, there can be a rent overcharge proceeding and no rent increase can be collected until the information/documentation is provided [9 NYCRR §2502.5 (c) and (d) are re-lettered (d) and (e), and a new paragraph (c) is added].
Default rent formula. When the rent on the base date for establishing rent under the four-year look-back period cannot be determined or the rent set on the base date was the subject of a fraudulent scheme to deregulate, the lowest rent for a comparable unit in the building will be used to establish the legal rent [9 NYCRR §2522.6 (b) is amended, 9 NYCRR §2526.1(g) is re-lettered (h), and new subdivision (g) is added].
Decrease in services. A tenant complaint of a service decrease won’t be dismissed if the tenant didn’t provide the owner with notice of the problem before filing the complaint with the DHCR.
Service decrease orders will include a bar to future MCI and vacancy bonus rent increases.
An owner's time to respond to a service decrease complaint will be reduced to 20 days if the tenant, in fact, gave the owner prior notice; otherwise, the response time is 60 days. If the tenant is forced to vacate, a five-day response time is required. And if the complaint is for lack of or reduction in heat or hot water, then a 20-day response time is required [9 NYCRR §2523.4(a)(1), (a)(2), (c), and (d)(2)].
Deemed leases. Tenants holding over after the lease expires will be treated as month-to-month tenants and not held to a new full lease term. In other words, these tenants won’t be subject to an automatic lease renewal based upon a deemed lease [9 NYCRR §2523.5(c)(2) and (3)].
Harassment. Harassment is redefined to include certain false filings and false statements designed to interfere with a tenant's quiet enjoyment or rights [9 NYCRR § 2525.5].
Statute of limitations. There’s a more comprehensive list of exceptions to the rule that when examining rent overcharges the look-back period to determine an overcharge is four years. The list of exceptions includes when there’s an allegation of fraud, an outstanding rent reduction order based upon a decrease in services, a willful overcharge, a vacant or exempt unit on the base date, or a preferential rent [9 NYCRR §2526.1(a)(2)(ii) is amended, and 9 NYCRR §2526.1(a)(2) adds new subparagraphs (iii), (iv), (v), (vi), (vii), (viii), and (ix), and 9 NYCRR §2526.1(a)(3)(iii) is amended].
Rent registrations. Owners won’t be able to amend a rent registration without going through an administrative proceeding with notice to the tenant unless the change is governed by another government agency [9 NYCRR § 2528.3 is amended to add paragraph (c)].