When
can an Apartment be Deregulated?
Two
Different Ways a Rent Regulated Apartment May Be Deregulated:
1)
OCCUPIED APARTMENTS ONLY: High-Rent/High-Income ("Luxury")
Decontrol
- the apartment
has a legal regulated rent of two thousand dollars ($2,000) or more
per month AND
- the
apartment is occupied by persons whose total annual household income
(that is, the federal adjusted gross income as reported on New
York State income tax returns) exceeds one hundred seventy-five
thousand dollars ($175,000) in each of
the two preceding calendar years
OR
2)
VACATED APARTMENTS ONLY: High-Rent Vacancy Decontrol
- A rent
regulated apartment which becomes vacant and could be offered
at a legal regulated rent of $2,000 or more per month is no longer
subject to rent regulation.
Additional
Details:
The Rent
Regulation Reform Act of 1997, New York City Local Law 4 of 1994 and
the Rent Regulation Reform Act of 1993 provide for the deregulation
of certain apartments based either one of the following conditions:
1)
OCCUPIED APARTMENTS ONLY: High-Rent/High-Income ("Luxury")
Decontrol:
These laws provide for, among other things, deregulation
of high-rent apartments occupied by high-income tenants by order
of DHCR in response to the filing of an owner's petition for luxury
deregulation. Pursuant to the Rent Regulation Reform Act of 1997, for
deregulation petitions filed with DHCR after January 1, 1998, deregulation
will occur for apartments with legal rents of $2,000 or more per month and which
are occupied by households with incomes in excess of $175,000 in each
of the two successive years prior to the filing of the owner's petition.
Under this
method of deregulation, a rent stabilized apartment may become deregulated
if both of the following conditions apply:
- the apartment
has a legal regulated rent of two thousand dollars ($2,000) or more
per month AND
- the apartment
is occupied by persons whose total annual household income
is in excess of one hundred seventy-five thousand dollars ($175,000)
per annum in each of the two preceding calendar years
However,
apartments are not automatically deregulated under these conditions.
For an apartment to be deregulated, an owner must follow specific procedures,
which are detailed in the Rent Regulation
Reform Act of 1997.
In addition,
please note that if a tenant lives in a rent regulated apartment
whose rent rises to $2,000 or more while the tenant resides there,
the owner may file a petition for deregulation even if the occupants'
total household income is below $175,000. If that is the case, it
is imperative that the tenant respond to all requests for
information relating to the petition, for any failure to respond
may result in the deregulation of the apartment, even if the income
requirements are not met.
Furthermore,
the owner is allowed to file a petition annually, and a response by
the tenant is required each time, even if the same information
was supplied in previous requests.
Also, please
see the exclusions below.
2)
VACATED APARTMENTS ONLY: High-Rent Vacancy Decontrol:
A rent regulated apartment which becomes vacant and
could be offered at a legal regulated rent of $2,000 or more per month
is no longer subject to rent regulation.
For example,
if the most recent tenant paid a rent of $1,800, the owner could,
under guidelines, legally raise the rent 17-20% for a vacancy lease,
which would increase the new rent to $2,106-2,160. Since the legal
regulated rent that could be charged is $2,000 or more, the apartment
is no longer subject to rent regulation, and the owner would be free
to charge whatever the market can bear. More information on how vacancy
rents are calculated can be found here.
Under a
City Council ordinance, owners are required to disclose prior rent
histories to new occupants of deregulated apartments.
Exclusions:
Housing accommodations that become subject to rent regulation because they
receive applicable tax benefits are excluded from the above two decontrol
provisions. For example, even if the rent that could be charged following
a vacancy is at least $2,000, the apartment remains stabilized for at least
the duration of the receipt of the applicable tax benefits.
Also excluded
from these decontrol provisions are tenants who have faced harassment
by their building owner.
These
exclusions are detailed in the text of the Rent
Regulation Reform Act of 1997.
Further
information on both types of decontrol can be found in DHCR
Fact Sheet #36.
Updated
2/28/08
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