How to Get Rent Restored After Service Cut
When you get hit with a rent cut for a decrease in services, act quickly to get the rent restored to its former level. Otherwise, you stand to lose a lot of money. For each rent-stabilized tenant whose rent gets cut, you’ll lose at least the most recent guidelines increase. For each rent-controlled tenant, you’ll lose an amount that depends on the type of service decrease. For either rent-controlled or rent-stabilized tenants whose rents get cut, you also can’t collect any rent increases for their apartments until the DHCR issues a rent restoration order. That includes rent increases for major capital improvements (MCIs), and for renewal and vacancy leases. Rent increases will become collectible, prospectively only, from the effective date of the DHCR Rent Restoration Order.
How should you go about getting the rent restored? If you don’t dispute that there was a service problem and you plan to take care of it, you should restore the service, or make the needed repairs as soon as you can, and then immediately apply to the DHCR to get the rent restored.
But suppose a district rent administrator (DRA) orders you to restore a service and you disagree with the order, either in part or totally. Rather than follow the basic steps, you may be better off appealing the order. Or, you may want to appeal the order and apply to restore the rent at the same time. Your course of action will depend on why you disagree with the order.
We’ll explain how to respond to a rent cut based on a service decrease when you decide not to dispute the rent cut and when you decide to dispute it.
IF YOU DON’T DISPUTE SERVICE CUT
Step 1: Restore Service
You must restore the service before you can apply to get the rent back to its original level. In practical terms, this means that if you’ve eliminated a service, you must start to provide it again. For instance, if you must make repairs to an apartment or to the building, make them.
The DHCR will send an inspector to the apartment or building to check that the repairs were made or the service restored. Don’t apply to get the rent restored until you’re ready for the inspection. If you flunk the inspection and your application is denied, you’ll have to start the process over again.
In some instances, a DHCR inspection may be bypassed if you submit appropriate documents in a rent restoration application for a decrease in building-wide services. If you’re filing to restore your rent from a reduction that was based on a building-wide service cut, you can include with your application to restore rent an affidavit from a licensed architect or engineer as evidence that the services for which rent was reduced are restored. In this situation, unless the tenants oppose your application with other persuasive evidence, you application may be granted without the need for a DHCR inspection.
Act quickly. Take care of the service problem as quickly as possible. Time is money. The longer you wait to restore services or make repairs, the longer you’ll have to wait to get the rents restored—and the more money you’ll lose.
Save documents. Once repairs are made, get and keep any documents that prove they were made (e.g., work orders; invoices; and receipts for contractors, equipment, and materials). You’ll need these documents when you apply to restore the rent. If your building employees make the repairs, ask them to sign a sworn statement describing the work they did. You can also photograph the repair work.
Step 2: Apply to Restore Rent
Once the repair work is done, immediately apply to the DHCR to restore the rent. For rent-stabilized apartments, the rent will be restored on the first rent payment date following the date the DHCR sends the tenant the owner’s application. For rent-controlled apartments, the rent is restored only from the date of the rent restoration order.
Here are the documents you must file:
- An original and two copies of an “Owner’s Application to Restore Rent” [Form RTP-19 (5/09)]. For building-wide applications, you must also submit a copy of the application for each tenant affected by the rent reduction order, and mailing labels addressed to each affected tenant.
- A complete copy of the rent reduction order, including all attachments (e.g., the list of tenants affected by the order).
- Documents that show the repairs have been made or the service restored (e.g., invoices, work orders, photos).
Tenant’s written consent. There’s a space in Part D, p. 2, of the owner’s rent restoration application form for the tenant to give written consent to your application. Although the tenant’s consent isn’t necessary, get it if you can. It should speed up approval of your application. If you get the consent, check off item “B” at the bottom of p. 1 of the application.
Where to file. File the application at the DHCR’s Gertz Plaza office. The address is: 92-31 Union Hall St., Jamaica, NY 11433.
If you file by mail, use certified mail, return receipt requested. If you file the application in person, get a date-stamped copy for your files. This way, you’ll have proof that you filed the application in case the DHCR loses it.
If tenant disputes application. The DHCR will send the tenant a copy of your application, and give the tenant a chance to oppose it. If the tenant disputes your application to restore the rent, the DHCR will send an inspector to the apartment. If the inspector finds that you’ve restored services, your application to restore the rent should be granted. If the inspector finds that you haven’t restored the services, your application will be denied.
The tenant may submit a written response to your application, which the DHCR should send to you. If the tenant’s response raises new problems that weren’t the reason for the rent cut be sure to point this out to the DHCR. These new problems are irrelevant to your rent restoration application. For example, if you got hit with a rent cut for a defective refrigerator, the tenant’s claim about a defective stove, even if true, shouldn’t interfere with your application to restore the rent. But it’s a good idea to look into the tenant’s new claims anyway. Make any necessary repairs, since the tenant can always file another service complaint based on the new problems.
If the tenant disputes your application and raises new problems that weren’t the reason for the rent cut, your response to the DHCR might say something like this:
In his answer to the rent restoration application, the tenant claims that I am not providing the following services: [state new problems raised by tenant]. These alleged problems weren’t the reason for the rent cut, which was based on [insert basis for rent cut]. Accordingly, the DHCR shouldn’t consider these alleged new problems in deciding the instant application.
IF YOU DISPUTE SERVICE CUT
The steps we’ve just described are meant for owners who agree that there’s been a decrease in service, and have every intention of fixing the problem. But what if you disagree with the rent cut order? You may think that there hasn’t been a decrease in service and that your tenant doesn’t deserve the rent cut. You have two options:
1. Appeal the order without applying to restore the rents; or
2. Appeal the order and—at the same time—apply to restore the rents.
What you do depends on why you disagree with the rent cut order. Here’s when you should follow each option.
Option 1: Appeal Order, But Don’t Apply to Restore Rent
In the following two situations, don’t apply to restore the rents while appealing the rent cut order:
1. You don’t think you have to provide the service in question. For example, the tenant wants a frost-free refrigerator. But you think you must provide only a regular refrigerator.
2. You don’t agree with the level of service you’ve been ordered to provide. For example, the rent cut order says you must provide three building porters and you think you must provide only two.
Why should you wait for the DHCR to decide your appeal before applying to get your rents restored? For a complicated, but important, reason: To get the rent restored before your appeal is decided, you’d have to provide the service. For example, if the DRA reduced your tenant’s rent because you didn’t give him a frost-free refrigerator, you’d have to give the tenant the frost-free refrigerator to get the rent restored. But once you do that, the DHCR will have no reason to consider your appeal. You’re now giving this tenant a service that your appeal claims you don’t have to give him. Moreover, now that you’ve started giving the service, you can’t stop.
On the other hand, if you just appeal the order and don’t apply to get the rent restored, you don’t have to give the tenant the frost-free refrigerator. Of course, you’ll suffer a rent cut. But if you win your appeal, the DHCR will order the tenant to pay back the amount of the rent cut.
Option 2: Appeal Order and Apply to Restore Rent
In the following three situations, appeal the rent cut order and—at the same time—apply to get the rents restored:
1. The dispute is over access. The tenant filed a service complaint and then wouldn’t let you inside the apartment to make the repair. But the DRA ordered a rent cut anyway. In this situation, apply to get the rent restored based on the lack of access, and appeal the order at the same time. In your rent restoration application, check item “C,” which says that the tenant has refused access.
In your appeal, be sure to point out the steps you took to get access. To win, you must submit copies of two letters to the tenant attempting to arrange access. Each of these letters must have been mailed at least eight days prior to the date proposed for access, and must have been mailed by certified mail, return receipt requested. If a “no access” inspection is scheduled by the DHCR, the tenant, owner, and/or his repairperson are required to be present and ready to begin repairs.
2. The dispute is over the amount of the rent cut or its effective date. Say the DRA cut the rent of a rent-controlled tenant by $50 per month, and you think the cut is too high. Or maybe the DRA ordered the rent cut to take effect earlier than you think it should. On your rent restoration application, check off box “A,” which says that you’ve restored the services for which the rent reduction was issued.
3. The order reduces the rent for something you disagree with, and for other items you can and are willing to repair or restore. In this situation, apply to restore the rent, even though your appeal is pending. Check off box “A,” but cross out the word “all” and type or write in the words “see attached statement.” Then, attach a statement to your application explaining that you restored all services except the one you disagree with. Also, explain that you have an appeal pending on that service. Ask the DHCR to issue an order finding that you’ve restored those services that you did in fact restore.
The DHCR can consider your rent restoration application for the restored services. If it finds that you restored some services listed in the order, you can restore the rent of a rent-controlled apartment to the extent that it was reduced for those items.
For a rent-stabilized tenant, you can’t restore any part of the rent until the DHCR finds that you’ve restored all services listed in the rent cut order. But you still may speed up the process. If the DHCR decides that you’ve restored the items that you’re not disputing, then submit—as a supplement to your appeal—the DHCR order saying this. Also, supplement your appeal with a statement asking the DHCR to restore the rents if you win your appeal. It will take longer to restore the rent if you wait until after you win the appeal before you file the rent restoration application.
When you file both a rent restoration application and an appeal at the same time, be sure to point out in your application that you’re filing an appeal, and give the docket number of the appeal if you have it. You can do this after you state the reasons why the rent should be restored for the items you’ve repaired under box “A” of the application. You could say:
Please note that I filed an appeal with the DHCR on [insert date] challenging the need to restore [insert service in dispute]. That appeal was assigned Docket Number [insert docket number of your appeal].
And in your appeal, refer to your rent restoration application, and give its docket number, if you have it. This way, one hand of the DHCR knows what the other is doing, and both of them can coordinate the final decision.