DHCR Issues Updated Renewal Lease Form
The DHCR has modified the NYC Renewal Lease Form (RTP-8) to incorporate the requirements of Rent Guidelines Board Order #54. With the latest order, the city’s Rent Guidelines Board voted to allow you to take a 3.25 percent increase on one-year renewal leases and a 5 percent increase on two-year renewal leases. As the most recent DHCR Renewal Lease Form, this updated form should be used for all renewal leases going forward. You can find the form at https://hcr.ny.gov/system/files/documents/2022/07/rtp-8-07-2022-fillable.pdf.
Lease Renewal Process
Generally, tenants in rent-stabilized apartments must be offered renewal leases. The renewal lease can be for a term of one or two years, at the tenant’s choice, and is at a rate set by the Rent Guidelines Board. The renewal lease offer must be made on a form created by or on a facsimile approved by the DHCR.
In New York City, the owner must give written notice of renewal by electronic means, mail, or personal delivery not more than 150 days and not less than 90 days before the existing lease expires on a DHCR Renewal Lease Form (RTP-8). After the renewal offer is made, the tenant has 60 days to choose a lease term, sign the lease, and return it to the owner. If the tenant doesn’t accept the renewal lease offer within this 60-day period, the owner may refuse to renew the lease and, if the tenant hasn’t moved out after the expiration of the current lease, may also proceed in court to have the tenant evicted.
When a tenant signs the renewal lease form and returns it to the owner, the owner must return the fully signed and dated copy to the tenant within 30 days. If an owner doesn’t return a copy of the fully executed renewal lease form to the tenant within 30 days of receiving the signed lease from the tenant, the tenant should still pay the new rent, but the tenant will file a complaint form with the DHCR for failure to furnish a copy of a signed lease. A renewal should go into effect on or after the date that it’s signed and returned to the tenant but no earlier than the expiration date of the current lease. In general, the lease and any rent increase may not begin retroactively.
Renewal leases must keep the same terms and conditions as the expiring lease unless a change is necessary to comply with a specific law or regulation. Also, when a tenant receives the Lease Renewal Form, a copy of the New York City Lease Rider For Rent Stabilized Tenants must be attached. The rider explains how the proposed rent was computed and describes the rights and obligations of tenants and owners under the Rent Stabilization Law.
Reasons for Not Renewing a Lease
An owner can refuse to renew a lease for several reasons, some of which are:
- The owner or a member of the owner’s immediate family needs the apartment for their personal use and primary residence. If the tenant is a senior citizen, or disabled, special rules apply;
- The apartment is not used as the tenant’s primary residence;
- The owner wants to take the apartment off the rental market, either to demolish the building for reconstruction or use it for other purposes permitted by law.
When the owner doesn’t offer the tenant a renewal lease for one of these reasons, however, the owner must give the tenant written notice of nonrenewal during the lease-offering time frame described above. Failure to serve this notice on the tenant during this time frame will entitle the tenant to a renewal lease.
Applying RGB Increases to Preferential Rents
A preferential rent is a rent that an owner agrees to charge that’s lower than the legal regulated rent that the owner could lawfully collect. As a result of the Housing Stability & Tenant Protection Act (HSTPA) of 2019, there are restrictions to preferential rent adjustments. Tenants who were paying a preferential rent as of June 14, 2019, retain the preferential rent for the life of the tenancy.
Owners who are collecting a preferential rent, upon renewal of the lease, can increase the legal and preferential rents by the lawful rate increases (such as Rent Guidelines Board increases and other increases allowed by the Rent Stabilization Law), but only collect an increase based on the preferential rent. The higher legal regulated rent and related increases can be collected only when the apartment is vacated and rented to a subsequent tenant.
Before HSTPA was enacted, owners had the option of charging a tenant a preferential rent. Under the prior law and rules, an owner could decide to terminate the preferential rent and charge the higher legal regulated rent when the tenant renewed the lease or when the tenant permanently vacated the unit, provided that the original written lease (the lease in which the preferential rent was first charged and all subsequent renewal leases thereafter) indicated the amount of the legal regulated rent and contained a clause stating how long the preferential rent would continue (such as for the term of the lease or the entire term of the tenancy).
If the original lease contained this language, then the owner had the option to raise the rent to the legal regulated rent at either the end of the lease term in a renewal lease or upon the permanent vacancy of the unit by the tenant. The timing of the option to terminate the preferential rent depended on the preferential lease language included in the original lease.
Get Consent, Proof of Service
When Sending Electronic Lease Renewals
With Operational Bulletin 2022-1, “Electronic Lease Offering and Tenant’s Voluntary Consent,” issued earlier this year, the DHCR clearly has permitted rent-stabilized leases and lease renewals to be offered and accepted through electronic means.
Get consent. To be able to offer rent-stabilized lease agreements by email, you must obtain the tenant’s voluntary consent. DHCR Form EL-TVC entitled, “Electronic Lease Offer: Tenant’s Voluntary Consent Form,” is the standard form to obtain consent. You can find the form here: www.hcr.ny.gov/system/files/documents/2022/03/el-tvc-electronic-lease-tenants-voluntary-consent-fillable-form.pdf.
The consent form must be signed by both parties and a copy must be provided to the tenant. You should also keep a copy of all documents for your records because the consent form isn’t required to be sent to the DHCR’s Office of Rent Administration.
The operational bulletin allows for service of the consent form either prior to or at the same time as the lease or renewal lease offer. However, the instructions included with the consent form say that consent must be obtained “prior to the use of electronic records to execute a lease or renewal form.” As a result, to be on the safe side, you should obtain consent “prior to” sending the lease or renewal lease offer. Without a signed consent form from the tenant, an owner can’t offer leases electronically, nor can an owner require electronic signatures.
Also, other than spouses or domestic partners, all tenants must sign the consent form in order for the consent to be effective. Once signed, the consent is applicable for the entirety of the tenancy, to all subsequent lease renewal offers during the tenant’s time in the rent-stabilized apartment.
Maintain proof of service. Being able to offer a rent-stabilized renewal lease by electronic means requires owners and tenants to maintain proof of service of the consent form, the lease renewal offer, and the acceptance or refusal. According to the DHCR, regardless of whether the transmission was done by personal email, electronic portal, or some other alternative, proof of service should include, but not be limited to, as many of the following elements as possible:
- Identity of the sender and recipient;
- Date of transmission;
- Subject matter;
- Attachments; and/or
- Electronic links to documents.
Regardless of the method of service used, owners must be able to print copies of electronic communications and all documents for submission to the DHCR and/or the courts upon request in a case proceeding. Remember that all of the regular window periods for lease renewal offers and tenant responses still apply. In New York City, an owner must give written notice of renewal by mail or personal delivery not more than 150 days and not less than 90 days before the existing lease expires on form RTP-8. After the renewal offer is made, the tenant has 60 days to choose a lease term, sign the lease, and return it to the owner.
HSTPA Changes to Non-Rent-Regulated Lease Renewals
With the recently adopted rent guidelines for rent-stabilized renewal leases, it’s important to note that HSTPA imposed requirements on owners seeking to raise rents for unregulated apartments. Advance notice is required to raise the rent for these apartments.
For non-regulated apartments, the landlord doesn’t have to renew the lease—unless the lease contains an automatic renewal clause, in which case the landlord must give the tenant advanced notice of the existence of this clause between 15 and 30 days before the tenant is required to notify the landlord of an intention not to renew the lease [General Obligations Law §5-905].
Written notice. If you intend to renew the lease for an unregulated unit with a rent increase of more than 5 percent, or if you don’t intend to renew the lease, you must provide advanced written notice:
- If the non-regulated tenant has lived in your apartment two or more years, or if the non-regulated tenant has a two-year lease, you must give the tenant 90 days’ advanced written notice before raising the rent or not renewing the lease;
- If the non-regulated tenant has lived in the apartment for more than one year, but less than two years, you must give the tenant 60 days’ advanced notice before raising the rent or not renewing the lease; or
- If the non-regulated tenant has lived in the apartment for less than one year, or has a lease for less than one year, you must give the tenant 30 days’ advanced notice before raising the rent or not renewing the lease [Real Property Law §226-c].