Emergency Tenant Protection Act 576/74

* S 6. Regulation of rents. a. Notwithstanding the provisions of any
lease or other rental agreement, no owner shall, on or after the first
day of the first month or other rental period following a declaration of
emergency pursuant to section three, which date shall be referred to in
this act as the local effective date, charge or collect any rent in
excess of the initial legal regulated rent or adjusted initial legal
regulated rent until such time as a different legal regulated rent shall
be authorized pursuant to guidelines adopted by a rent guidelines board
pursuant to section four.
b. The initial legal regulated rents for housing accommodations in a
city having a population of less than one million or a town or village
as to which a declaration of emergency has been made pursuant to this
act shall be:
(1) For housing accommodations subject to the emergency housing rent
control law which become vacant on or after the local effective date of
this act, the rent agreed to by the landlord and the tenant and reserved
in a lease or provided for in a rental agreement; provided that such
initial legal regulated rent may be adjusted on application of the owner
or tenant pursuant to subdivision a of section nine of this act; and
provided further that no increase of such initial regulated rent
pursuant to annual guidelines adopted by the rent guidelines board shall
become effective until the expiration of the first lease or rental
agreement taking effect after the local effective date, but in no event
before one year from the commencement of such rental agreement.
(2) For all other housing accommodations, the rent reserved in the
last effective lease or other rental agreement; provided that an initial
rent based upon the rent reserved in a lease or other rental agreement
which became effective on or after January first, nineteen hundred
seventy-four may be adjusted on application of the tenant pursuant to
subdivision b of section nine of this act or on application of either
the owner or tenant pursuant to subdivision a of such section; and
further provided that if a lease is entered into for such housing
accommodations after the local effective date, but before the effective
date of the first guidelines applicable to such accommodations, the
lease may provide for an adjustment of rent pursuant to such guidelines,
to be effective on the first day of the month next succeeding the
effective date of such guidelines.
c. The initial legal regulated rents for housing accommodations in a
city having a population of one million or more shall be the initial
rent established pursuant to the New York city rent stabilization law of
nineteen hundred sixty-nine as amended.
d. Provision shall be made pursuant to regulations under this act for
individual adjustment of rents where:
(1) there has been a substantial modification or increase of dwelling
space or an increase in the services, or installation of new equipment
or improvements or new furniture or furnishings, provided in or to a
tenant`s housing accommodation, on written tenant consent to the rent
increase. In the case of a vacant housing accommodation, tenant consent
shall not be required. The permanent increase in the legal regulated
rent for the affected housing accommodation shall be one-fortieth of the
total cost incurred by the landlord in providing such modification or
increase in dwelling space, services, furniture, furnishings or
equipment, including the cost of installation, but excluding finance
charges. Provided further than an owner who is entitled to a rent
increase 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.
(2) there has been since January first, nineteen hundred seventy-four
an increase in the rental value of the housing accommodations as a
result of a substantial rehabilitation of the building or the housing
accommodation therein which materially adds to the value of the property
or appreciably prolongs its life, excluding ordinary repairs,
maintenance, and replacements, or
(3) there has been since January first, nineteen hundred seventy-four
a major capital improvement required for the operation, preservation or
maintenance of the structure. An adjustment under this paragraph shall
be in an amount sufficient to amortize the cost of the improvements
pursuant to this paragraph over a seven-year period, or
(4) an owner by application to the state division of housing and
community renewal for increases in the rents in excess of the rent
adjustment authorized by the rent guidelines board under this act
establishes a hardship, and the state division finds that the rate of
rent adjustment is not sufficient to enable the owner to maintain
approximately the same ratio between operating expenses, including taxes
and labor costs but excluding debt service, financing costs, and
management fees, and gross rents which prevailed on the average over the
immediate preceding five year period, or for the entire life of the
building if less than five years, or
(5) as an alternative to the hardship application provided under
paragraph four of this subdivision, owners of buildings acquired by the
same owner or a related entity owned by the same principals three years
prior to the date of application may apply to the division for increases
in excess of the level of applicable guideline increases established
under this law based on a finding by the commissioner that such
guideline increases are not sufficient to enable the owner to maintain
an annual gross rent income for such building which exceeds the annual
operating expenses of such building by a sum equal to at least five
percent of such gross rent. For the purposes of this paragraph,
operating expenses shall consist of the actual, reasonable, costs of
fuel, labor, utilities, taxes, other than income or corporate franchise
taxes, fees, permits, necessary contracted services and non-capital
repairs, insurance, parts and supplies, management fees and other
administrative costs and mortgage interest. For the purposes of this
paragraph, mortgage interest shall be deemed to mean interest on a bona
fide mortgage including an allocable portion of charges related thereto.
Criteria to be considered in determining a bona fide mortgage other than
an institutional mortgage shall include; condition of the property,
location of the property, the existing mortgage market at the time the
mortgage is placed, the term of the mortgage, the amortization rate, the
principal amount of the mortgage, security and other terms and
conditions of the mortgage. The commissioner shall set a rental value
for any unit occupied by the owner or a person related to the owner or
unoccupied at the owner`s choice for more than one month at the last
regulated rent plus the minimum number of guidelines increases or, if no
such regulated rent existed or is known, the commissioner shall impute a
rent consistent with other rents in the building. The amount of hardship
increase shall be such as may be required to maintain the annual gross
rent income as provided by this paragraph. The division shall not grant
a hardship application under this paragraph or paragraph four of this
subdivision for a period of three years subsequent to granting a
hardship application under the provisions of this paragraph. The
collection of any increase in the rent for any housing accommodation
pursuant to this paragraph shall not exceed six 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 collectability of any dollar
excess above said sum to be spread forward in similar increments and
added to the rent as established or set in future years. No application
shall be approved unless the owner`s equity in such building exceeds
five percent of: (i) the arms length purchase price of the property;
(ii) the cost of any capital improvements for which the owner has not
collected a surcharge; (iii) any repayment of principal of any mortgage
or loan used to finance the purchase of the property or any capital
improvements for which the owner has not collected a surcharge; and (iv)
any increase in the equalized assessed value of the property which
occurred subsequent to the first valuation of the property after
purchase by the owner. For the purposes of this paragraph, owner`s
equity shall mean the sum of (i) the purchase price of the property less
the principal of any mortgage or loan used to finance the purchase of
the property, (ii) the cost of any capital improvement for which the
owner has not collected a surcharge less the principal of any mortgage
or loan used to finance said improvement, (iii) any repayment of the
principal of any mortgage or loan used to finance the purchase of the
property or any capital improvement for which the owner has not
collected a surcharge, and (iv) any increase in the equalized assessed
value of the property which occurred subsequent to the first valuation
of the property after purchase by the owner.
This subdivision shall apply to accommodations outside a city of one
million or more.
e. Notwithstanding any contrary provisions of this act, on and after
July first, nineteen hundred eighty-four the legal regulated rent shall
be the rent registered pursuant to section twelve-a of this act subject
to any modification imposed pursuant to this act.
f. Notwithstanding any inconsistent provision of law, rule,
regulation, contract, agreement, lease or other obligation, no owner, in
addition to the authorized collection of rent, shall demand, receive or
retain a security deposit or advance payment which exceeds the rent of
one month for or in connection with the use or occupancy of a housing
accommodation by (i) any tenant who is sixty-five years of age or older
for any lease or lease renewal entered into after July 1, 1996 or (ii)
any tenant who is receiving disability retirement benefits or
supplemental security income pursuant to the federal social security act
for any lease or lease renewal entered into after July 1, 2002.
g. Notwithstanding any provision of this act to the contrary in the
case where all tenants named in a lease have permanently vacated a
housing accommodation and a family member of such tenant or tenants is
entitled to and executes a renewal lease for the housing accommodation
if such accommodation continues to be subject to this act after such
family member vacates, on the occurrence of such vacancy the legal
regulated rent shall be increased by a sum equal to the allowance then
in effect for vacancy leases, including the amount allowed by
subdivision (a-1) of section ten of this act. Such increase shall be in
addition to any other increases provided for in this act including an
adjustment based upon a major capital improvement, or a substantial
modification or increase of dwelling space or services, or installation
of new equipment or improvements or new furniture or furnishings
provided in or to the housing accommodation, pursuant to section six of
this act and shall be applicable in like manner to each second
subsequent succession.
* NB Expires June 15, 2011