When can an Apartment be Deregulated?

Two Different Ways a Rent Stabilized 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 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 stabilized 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 stabilized 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 stabilized 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 current 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.