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When
can an Apartment be Deregulated?
Two
Different Ways a Rent Stabilized Apartment May Be Deregulated:
1)
OCCUPIED APARTMENTS ONLY: High-Rent/High-Income Deregulation
- the
apartment has a legal regulated rent of twenty-five hundred dollars
($2,500) or more per month AND
- the
apartment is occupied by persons whose total annual household income
exceeds two hundred thousand dollars ($200,000)
in each of the two preceding calendar years
OR
2)
VACATED APARTMENTS ONLY: High-Rent/Vacancy Deregulation
- A
rent stabilized apartment which becomes vacant and could
be offered at a legal regulated rent of twenty-five hundred dollars
($2,500) or more per month
is no longer subject to rent regulation.
Additional
Details:
The
Rent Regulation Reform Act of 1993; the Rent Regulation Reform Act of 1997; and the Rent Act of 2011 provide for the
deregulation of certain apartments based either one of the following
conditions:
1)
OCCUPIED APARTMENTS ONLY: High-Rent/High-Income Deregulation:
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 high-rent/high-income deregulation. Pursuant to the Rent Act of 2011, for deregulation petitions filed with DHCR after
June 24, 2011, deregulation will occur for apartments with
legal rents of $2,500 or more per month and which are
occupied by households with incomes in excess of $200,000 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 $2,500 or more per month AND
- the
apartment is occupied by persons whose total annual household income*
is in excess of $200,000
per annum in each of the two preceding calendar years (*Income
is based on the federal adjusted gross income as reported on New
York State income tax returns)
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
Act of 2011.
In addition,
please note that if a tenant lives in a rent stabilized apartment
whose rent rises to $2,500 or more while the tenant resides there,
the owner may file a petition for deregulation even if the occupants'
total household income is below $200,000. 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 Deregulation:
A rent stabilized apartment which becomes vacant and
could be offered at a legal regulated rent of $2,500 or more per
month is no longer subject to rent regulation.
For
example, if the most recent tenant paid a rent of $2,300, the owner
could, under recent guidelines, legally raise the rent 20%
for a two-year vacancy lease, which would increase the new rent to $2,760.
Since the legal regulated rent that could be charged is $2,500
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.
Exclusions:
- Housing accommodations that become subject to rent regulation because they
receive applicable tax benefits are excluded from the above two deregulation
provisions. For example, even if the rent that could be charged following
a vacancy is at least $2,500, the apartment remains stabilized for at least
the duration of the receipt of the applicable tax benefits.
- Rent increases legally permitted upon vacancy may not be taken more than once in any calendar year.
- Also
excluded from these deregulation provisions are tenants who have faced
harassment by their building owner.
These
exclusions are detailed in the text of the Rent
Act of 2011.
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Page Updated July 28, 2011
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