Fact
Sheet #12 - Rent Increases for New Services, New Equipment or Improvements
to an Apartment
A building owner may adjust the rent in an individual apartment based on
increased services, new equipment, or improvements. This adjustment is in
addition to statutory vacancy increases or the regular annual Rent Guidelines
Board adjustments for rent stabilized apartments, and biennial adjustments
to Maximum Base Rents for rent controlled apartments.
An owner who pays for a substantial increase of dwelling space or an increase
in services, or new furniture or furnishings, or the installation of new
equipment or improvements provided in or to an occupied rent stabilized or
rent controlled apartment, and has obtained the written consent of the tenant
to the rent adjustment, may adjust the rent by 1/40th of the cost of the
new item(s) including installation costs, but not finance charges. An order
from DHCR is not required before the owner may so adjust the rent. However,
for rent controlled housing accommodations, before an owner may so adjust
the rent, such owner must file an "Owner's Notice of a Rent Increase Based
on Increased Services/New Furnishings/Equipment/Painting; and Tenant's Statement
of Consent" (DHCR Form RN-79b)
with DHCR.
If the subject apartment is vacant when the improvements are made, the owner
does not have to obtain the written consent of any tenant to adjust the rent
by 1/40th. The owner should keep all bills for improved services, new equipment,
or improvements to prove their cost in the event a tenant challenges the
rent adjustment.
Prior DHCR approval is not required for 1/40th rent adjustments based on
individual apartment improvements, whether or not the installation of the
improvements occurs while an apartment is vacant. However, such rent adjustments
may be challenged by a tenant up to four years after the installation. When
timely challenged, any claimed individual apartment improvement cost must
be supported by adequate documentation, which should include at least one
of the following:
- Cancelled check(s) contemporaneous with the completion of the work;
- Invoice receipt marked paid in full contemporaneous with the completion
of the work;
- Signed contract agreement;
- Contractor's affidavit indicating that the installation was completed
and paid in full.
Whenever it is found that a claimed cost warrants further inquiry, DHCR
may request that the owner provide additional documentation.
If it is found that there is an equity interest or an identity of interest
between the contractor and the building owner, then additional proof of cost
and payment, specifically related to the installation, may be requested.
Where the claimed cost is not adequately substantiated, the difference between
that amount and the amount of the cost that is substantiated will be disallowed.
The cost of associated demolition or removal of the item(s) being replaced
or installed can be included in the calculation for determining the allowable
rent adjustment for an individual apartment improvement only when such demolition
or removal is necessary, and is performed contemporaneously with the completion
of the work.
Any removal or demolition work performed by the owner or an employee of
the owner during the course of assigned duties (i.e. removal of a refrigerator
or rubbish) does not constitute an expenditure that can be included in the
calculation of the rent adjustment for the individual apartment improvement.
For
more information or assistance, call the DHCR Rent InfoLine (718-739-6400)
or visit your Borough or County Rent Office.
DHCR
Version 2/18/05
RGB Page Updated 7/30/08
