§ 26-405 General powers and duties of the city rent agency.
AC § 26-405
a.
(1)At the time this chapter shall become effective, the city rent agency shall establish maximum rents which, subject to the provisions of subdivision b of this section, shall be the maximum rents in effect on April thirtieth, nineteen hundred sixty-two pursuant to the state rent act and the regulations thereunder.
(2)(a) Notwithstanding the foregoing provision of this subdivision, and except as provided in subparagraph (b) of this paragraph two, effective August first, nineteen hundred seventy, the maximum rent in effect on July thirty-first, nineteen hundred seventy shall be adjusted as follows: (i) For any individual housing accommodation for which one or more but less than two full fifteen per centum rent increases has been granted since May first, nineteen hundred fifty-three pursuant to former subparagraph (d) of paragraph one of subdivision g of this section the maximum rent shall be increased by eight per centum.
(ii)For any individual housing accommodation for which no full fifteen per centum rent increase has been granted since May first, nineteen hundred fifty-three pursuant to former subparagraph (d) of paragraph one of subdivision g of this section the maximum rent shall be increased by fifteen per centum, except that if there was no such increase for any individual housing accommodation for which a first rent was established pursuant to former subdivision m of this section after July thirty-first, nineteen hundred sixty-five and before August first, nineteen hundred sixty-eight, the maximum rent shall be increased by five per centum, and except that if there was no such increase for any individual housing accommodation for which a first rent was established pursuant to such subdivision on or after August first, nineteen hundred sixty-eight there shall be no increase in maximum rent. On or after August first, nineteen hundred seventy, a landlord may file application for labor cost rent adjustment pursuant to subparagraph (l) of paragraph (1) of subdivision g of this section. In lieu of such labor cost rent adjustment, the landlord of a building with twenty or fewer housing accommodations shall have the option of filing for a five per centum increase in maximum rent for any individual housing accommodation for which two or more full fifteen per centum increases have been granted since May first, nineteen hundred fifty-three pursuant to former subparagraph (d) of paragraph one of subdivision g of this section. Nothing contained in this subparagraph (a) however, shall have the effect of establishing the maximum rent in an amount less than the maximum rent in effect on July thirty-first, nineteen hundred seventy nor of increasing by more than fifteen per centum the maximum rent for any housing accommodation.
(b)Where the maximum rent in effect on July thirty-first, nineteen hundred seventy for any individual housing accommodation is less than sixty dollars per month such rent shall be increased effective August first, nineteen hundred seventy by ten dollars per month where the housing accommodation is comprised of three rooms or less and by fifteen dollars per month where the housing accommodation is comprised of more than three rooms.
(c)Where a lease is in effect for any housing accommodation on August first, nineteen hundred seventy, no adjustment of maximum rent for such accommodation shall become effective until the expiration of such lease. Where a housing accommodation becomes vacant on or after August first, nineteen hundred seventy and before January first, nineteen hundred seventy-two by voluntary surrender of possession by the tenant the maximum rent shall be increased by no more than fifteen per centum over the maximum rent established for such accommodation at the time the vacancy occurred, provided that a report is filed with the city rent agency as prescribed by its regulations. If the city rent agency shall make a finding of harassment in violation of subdivision d of section 26-412 of this chapter for the purpose of obtaining such a vacancy, in addition to all other civil or criminal penalties, injunctive relief and enforcement remedies authorized by section 26-413 of this chapter, no housing accommodation in the building shall thereafter be entitled to the benefit of a rental increase as a result of becoming vacant between the aforesaid dates.
(d)The total of (i) the increase pursuant to subparagraph (a) of this paragraph, or (ii) any increases granted between December thirty-first, nineteen hundred sixty-nine and December thirty-first, nineteen hundred seventy-one pursuant to subparagraph (a), (b), or (c) of paragraph one of subdivision g of this section and (iii) any increase granted on or after the effective date of this paragraph pursuant to subparagraph (l) of paragraph one of subdivision g of this section shall not exceed fifteen per centum of the "1970 base rent". For purposes of this subparagraph, the "1970 base rent" is the maximum rent on July thirty-first, nineteen hundred seventy minus the amount of any increase granted between December thirty-first, nineteen hundred sixty-nine and July thirty-first, nineteen hundred seventy pursuant to subparagraph (a), (b), or (c) of paragraph one of subdivision g of this section. This subparagraph shall not operate to decrease any maximum rent existing on its effective date.
(e)The rent increases provided for in this paragraph two shall be collectible upon the landlord's filing a report with the city rent agency on forms to be prescribed by such agency, including simplified forms for landlords of buildings with twelve or fewer housing accommodations, and giving such notice to the tenant as such agency may prescribe, subject to adjustment upon order of the city rent agency. The report shall contain a certified statement by the landlord that there is no legally habitable rent controlled housing accommodation in the building which has not been rented for a period of six months or more on the date of the filing of such report, or that if there is such a housing accommodation, the reasons it has not been rented is that it is being altered pursuant to a permit issued by the department of buildings no later than three months after the vacancy commenced and that the alteration is of such a nature that the accommodation must be kept vacant while it is being made or for such other cause found by the city rent agency not to be inconsistent with the purpose of this chapter, provided further that in the case of an alteration it is commenced within sixty days from the issuance of said permit. A copy of the permit and the application therefor shall accompany the report. No report shall be accepted for filing and no rent increase provided for in this paragraph two shall be collected in the absence of any such certified statement by the landlord. Any excess shall be credited to the tenants in full commencing with the rental payment following the receipt by the landlord of such order of adjustment. If such report is filed on or before October thirty-first, nineteen hundred seventy, the increase shall take effect August first, nineteen hundred seventy. If the report is filed thereafter, such increase shall take effect with the first rental payment following filing.
(f)The rent increases provided for in this paragraph two shall not be collected for the period between March thirty-first, nineteen hundred and seventy-one and December thirty-first, nineteen hundred seventy-one until the landlord shall have filed with the city rent agency a certified statement attesting that for every month for which he or she has received a rent increase pursuant to subparagraphs (a) and (b) of this paragraph two, he or she has expended or incurred in the operation, maintenance and improvements of the housing accommodations from which increases were collected an amount which equals the amount expended per month for such purpose averaged over the preceding five years, or such lesser period that he or she has been landlord of such properties, plus ninety per centum of all increased rents so collected.
(3)The city rent agency shall establish maximum rents to be effective January first, nineteen hundred seventy-two by dividing the maximum gross building rental from all housing accommodations in the property whether or not subject to or exempt from control under this chapter by the number of such accommodations, after giving consideration to such factors as may be prescribed by formula, such as size and location of housing accommodations and number of rooms. Such maximum gross building rental shall be computed on the basis of real estate taxes, water rates and sewer charges and an operation and maintenance expense allowance, a vacancy allowance not in excess of two per cent, and a collection loss allowance, both as prescribed by such agency, and an eight and one-half per centum return on capital value. The operating and maintenance expense allowance shall include provision for the cost of fuel, utilities, payroll, maintenance repairs, replacement reserves and miscellaneous charges attributed to the property, excluding mortgage interest and amortization, and may be varied by the agency for different types of properties depending upon such factors as the year of construction, elevator or non-elevator buildings, and the average number of rooms per individual housing accommodations in the building. Capital value shall be equalized assessed valuation based upon the appropriate tax class ratio which is established pursuant to article twelve of the real property tax law. Where the property receives income from sources other than such housing accommodations, the taxes, water and sewer charges and the capital value attributed to the portion consisting of housing accommodations shall be in the same ratio of the total taxes, water and sewer charges (where not computed separately) and the total capital value as the gross income from such portion consisting of housing accommodations bears to the total gross income from the property, as prescribed by the agency. The agency shall report to the council on or before October fifteenth, nineteen hundred seventy-one as to the status of preparation of the formulas necessary to implement the rent adjustments to be effective January first, nineteen hundred seventy-two.
(4)The city rent agency shall establish maximum rents effective January first, nineteen hundred seventy-four and biennially thereafter by adjusting the existing maximum rent to reflect changes, if any, in the factors which determine maximum gross building rental under paragraph three of this subdivision except that commencing January first, nineteen hundred eighty-two, said maximum rent shall no longer recognize or reflect the adjustment allocable to changes in heating costs after April ninth, nineteen hundred seventy-nine. Notwithstanding any other provisions in this paragraph to the contrary, commencing January first, nineteen hundred seventy-four, the city rent agency shall require each owner to make available for examination his or her books and all other financial records relating to the operation of each building under his or her ownership containing accommodations subject to this chapter at least once every three years for the purpose of determining whether the maximum formula rent is appropriate for each building in light of actual expenditures therefor and shall also alter such formula rent to take into account significant variations between the formula and actual cost experience. The agency shall also establish maximum costs for the factors under paragraph three of this subdivision which determine maximum gross building rental to preclude increases which would otherwise results from excessive expenditures in the operation and maintenance of the building. The return allowed on capital may be revised from time to time by local law.
(5)Where a maximum rent established pursuant to this chapter on or after January first, nineteen hundred seventy-two, is higher than the previously existing maximum rent, the landlord may not collect an increase from a tenant in occupancy in any one year period of more than the lesser of either seven and one-half percentum or an average of the previous five years of one-year rent adjustments on rent stabilized apartments as established by the rent guidelines board, pursuant to subdivision b of section 26-510 of this title. If the period for which the rent is established exceeds one year, regardless of how the collection thereof is averaged over such period, the rent the landlord shall be entitled to receive during the first twelve months shall not be increased by more than the lesser of either seven and one-half percentum or an average of the previous five years of one-year rent adjustments on rent stabilized apartments as established by the rent guidelines board, pursuant to subdivision b of section 26-510 of this title, over the previous rent. Any additional annual rents shall not exceed the lesser of either seven and one-half percentum or an average of the previous five years of one-year rent adjustments on rent stabilized apartments as established by the rent guidelines board, pursuant to subdivision b of section 26-510 of this title, of the rent paid during the previous year. Notwithstanding any of the foregoing limitations in this paragraph five, maximum rent shall be increased if ordered by the agency pursuant to subparagraphs (d), (e), (f), (g), (h), (i), (k), or (m) of paragraph one of subdivision g of this section. Where a housing accommodation is vacant on January first, nineteen hundred seventy-two, or becomes vacant thereafter by voluntary surrender of possession by the tenants, the maximum rent established for such accommodations may be collected.
(6)Where a new maximum rent has been established pursuant to former subdivision m of this section or, following the repeal of such subdivision, pursuant to subparagraph (m) of paragraph one of subdivision g of this section, a new maximum rent shall not be established pursuant to paragraph three of this subdivision. Except with respect to a housing accommodation to which the preceding sentence applies, where the maximum rent on December thirty-first, nineteen hundred seventy-one is higher than the maximum rent established pursuant to paragraph three of this subdivision, such prior maximum rent shall continue in effect until the maximum rent under paragraph three, as adjusted from time to time pursuant to the provisions of this chapter, shall equal or exceed such prior maximum rent, at which time the maximum rent for such housing accommodations shall be as prescribed in this chapter.
(7)Section eight housing assistance.
(a)Notwithstanding any provision of this chapter, if during a rental period in which the landlord is eligible for an adjustment or establishment of rents pursuant to paragraph three or four of this subdivision, housing assistance payments are being made pursuant to section eight of the United States housing act of nineteen hundred thirty-seven, as amended, with respect to any housing accommodation covered by this chapter, the maximum rent collectible from the tenant in occupancy shall be the lesser of: (1) the maximum rent established pursuant to paragraph three of this subdivision as adjusted pursuant to this chapter, computed without regard to the limitations of paragraph five of this subdivision (provided that in any case the rent paid by the tenant pursuant to this chapter without regard to this paragraph is higher than such rent, the rent paid shall be substituted for such rent), or (2) the contract or fair market rent approved for the housing accommodation pursuant to federal law or regulation.
(8)Notwithstanding the provisions of this chapter, upon the sale in any manner authorized by law of a multiple dwelling which was previously subject to the provisions of such chapter and which was acquired by the city in a tax foreclosure proceeding or pursuant to article nineteen-A of the real property actions and proceedings law, for a dwelling unit which was subject to this chapter pursuant to the local emergency housing rent control act at the time the city so acquired title, is occupied by a tenant who was in occupancy at the time of acquisition and remains in occupancy at the time of sale, the maximum rent shall be the last rent charged by the city, or on behalf of the city, for such dwelling unit, which rent shall not exceed the rent computed pursuant to paragraph three of this subdivision, computed as of the time of such sale. This paragraph shall not apply to redemptions from city ownership pursuant to chapter four of title eleven of the code. b. Such agency, to effectuate the purposes of this chapter, and in accordance with the standards set forth in paragraph two of subdivision c of this section, may set aside and correct any maximum rent resulting from illegality, irregularity in vital matters or fraud, occurring prior to or after May first, nineteen hundred sixty-two. c.
(k)The landlord has incurred, since January first, nineteen hundred seventy, in connection with and in addition to a concurrent major capital improvement pursuant to subparagraph (g) of this paragraph, other expenditures to improve, restore or preserve the quality of the structure. An adjustment under this subparagraph shall be granted only if such improvements represent an expenditure equal to at least ten per centum of the total operating and maintenance expenses for the preceding year. An adjustment under this subparagraph shall be in addition to any adjustment granted for the concurrent major capital improvement and shall be in an amount sufficient to amortize the cost of the improvements pursuant to this subparagraph over a seven-year period.
(l)[Repealed.] (m) Where the rehabilitation or improvement of sub-standard or deteriorated housing accommodations has been financed under a governmental program providing assistance through loans, loan insurance or tax abatement or has been undertaken under another rehabilitation program not so financed but approved by the commissioner.
(n)[Repealed.] (o) (1) There has been an increase in heating and heating fuel expenditures in a property resulting from a city-wide rise in heating fuel costs such that the verifiable expenditures for heating or heating fuel in a property for nineteen hundred seventy-four exceeds the verifiable expenditures for such heating or heating fuel during nineteen hundred seventy-three.
(iii)the aggregate disposable income (as defined by regulation of such agency as the mayor shall designate) for the current income tax year of all members of the household residing in the housing accommodation whose head of the household is a person with a disability pursuant to this section does not exceed fifty thousand dollars beginning July first, two thousand fourteen. For purposes of this subparagraph, "aggregate disposable income" shall not include gifts or inheritances, payments made to individuals because of their status as victims of Nazi persecution, as defined in P.L. 103-286, or increases in benefits accorded pursuant to the social security act or a public or private pension paid to any member of the household which increase, in any given year, does not exceed the consumer price index (all items United States city average) for such year which take effect after the date of eligibility of a head of the household receiving benefits under this subdivision whether received by the head of the household or any other member of the household.
(iv)(a) in the case of a head of the household who does not receive a monthly allowance for shelter pursuant to the social services law, (A) the maximum rent for the housing accommodations exceeds one-third of the aggregate disposable income, or (B) if any expected increase in the maximum rent pursuant to paragraph two, three, four or five of subdivision a of this section, or subparagraph (a), (b), (c), (l) or (n) of paragraph one of subdivision g of this section would cause such maximum rent to exceed one-third of the aggregate disposable income, or (C) if such head of household has been granted a rent increase exemption order that is in effect as of January first, two thousand fifteen or takes effect on or before July first, two thousand fifteen regardless of whether the maximum rent or any expected increase described in this clause exceeds one-third of the aggregate disposable income; or (b) in the case of a head of the household who receives a monthly allowance for shelter pursuant to the social services law, the maximum rent for the housing accommodations exceeds the maximum allowance for shelter which the head of the household is entitled to receive pursuant to the social services law or if any expected increase in the maximum rent pursuant to paragraph two, three, four or five of subdivision a of this section, or subparagraph (a), (b), (c), (l) or (n) of paragraph one of subdivision g of this section would cause such maximum rent to exceed the maximum allowance for shelter which the head of the household is entitled to receive.
(9)Notwithstanding any other provision of law to the contrary, where a head of household holds a current, valid rent exemption order and, after the effective date of this paragraph, there is a permanent decrease in aggregate disposable income in an amount which exceeds twenty percent of such aggregate disposable income as represented in such head of the household's last approved application for a rent exemption order or for renewal thereof, such head of the household may apply for a redetermination of the amount set forth therein. Upon application, such amount shall be redetermined so as to re-establish the ratio of adjusted rent to aggregate disposable income which existed at the time of the approval of such eligible head of the household's last application for a rent exemption order or for renewal thereof; provided, however, that in no event shall the amount of the adjusted rent be redetermined to be (i) in the case of a head of the household who does not receive a monthly allowance for shelter pursuant to the social services law, less than one-third of the aggregate disposable income unless such head of the household has been granted a rent exemption order that is in effect as of January first, two thousand fifteen or takes effect on or before July first, two thousand fifteen; or (ii) in the case of a head of the household who receives a monthly allowance for shelter pursuant to the social services law, less than the maximum allowance for shelter which such head of the household is entitled to receive pursuant to such law. For purposes of this paragraph, a decrease in aggregate disposable income shall not include any decrease in such income resulting from the manner in which such income is calculated pursuant to any amendment to paragraph c of subdivision one of section four hundred sixty-seven-b of the real property tax law, any amendment to the regulations of the department of finance made on or after the effective date of the local law that added this clause, or any amendment to the regulations of such other agency as the mayor shall designate made on or after October tenth, two thousand five. For purposes of this paragraph, "adjusted rent" shall mean maximum rent less the amount set forth in a rent exemption order. (Am. 2015 N.Y. Laws Ch. 20 Pt. A § 31, 6/26/2015, eff. 6/26/2015; Am 2015 N.Y. Laws Ch. 553, 12/11/2015, eff. 12/11/2015; Am. 2019 N.Y. Laws Ch. 36 Pt. H §§ 1, 2, Pt. K §§ 3, 10, 6/14/2019, eff. 6/14/2019; Am. 2019 N.Y. Laws Ch. 39 Pt. Q §§ 20, 27, 6/24/2019, retro eff. 6/14/2019; Am. 2024 N.Y. Laws Ch. 56 Pt. FF § 5, 4/20/2024, eff. 10/17/2024; Am. 2024 N.Y. Laws Ch. 458, 11/22/2024, eff. 11/22/2024) Editor's note: For related unconsolidated provisions, see Appendix A at L.L. 1986/052, L.L. 1988/067, L.L. 1992/040, L.L. 1992/096, L.L. 1996/001, L.L. 1997/073, L.L. 2003/056, L.L. 2003/067, L.L. 2005/021, L.L. 2009/044, L.L. 2014/019, L.L. 2014/039, L.L. 2017/024, and L.L. 2020/112.
