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Disclaimer: By
providing answers to frequently asked questions, the staff of the
Rent Guidelines Board attempts to clarify the often complex programs
and regulations governing landlord tenant relations in NYC. However,
the information provided herein does not represent official policies
or opinions of the City of New York or the Rent Guidelines Board nor
should this information be used to substitute for advice of legal
counsel.
How
does a rent stabilized apartment become deregulated through a vacancy?
There
are different ways by which a rent stabilized apartment may be subject to deregulation upon
vacancy:
- Apartments
under rent stabilization because the owner receives J-51 or 421-a tax benefits
may become deregulated upon vacancy (or sooner if the owner follows the
appropriate notice requirements). See the FAQ section J-51
and 421-a Housing for further information.
- An apartment
which was occupied by a stabilized tenant during the conversion to a co-op
may become deregulated upon vacancy. See the FAQ section entitled Co-ops
and Condos for further details.
- The
most common source of deregulation occurs through high rent vacancy deregulation,
which is described below.
- Other methods by which an apartment may be deregulated are discussed in the Rent Guidelines Board annual study Changes to the Rent Stabilized Housing Stock, available in the Research section of our Web site.
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Can
an occupied apartment experience deregulation?
Yes.
Under some circumstances apartments in 421-a and J-51 buildings may become
deregulated at the end of the last lease commencing during the period of
the tax abatement. For more information about these programs see the FAQ
section entitled J-51 and 421-a Housing.
On
rare occasions an apartment in a building converted to a co-op under an eviction
plan may be deregulated. Under an eviction plan, tenants are given the choice
to purchase the apartment or vacate after a specified period of time. Since
the overwhelming majority of co-op conversions are under non-eviction plans,
such cases are very uncommon. For more information on this, we suggest you
contact the Office of the New York State Attorney General - Real Estate Financing
Bureau at (212) 416-8000.
More
common is the process of high income deregulation described in the
question below.
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How
are rent controlled apartments decontrolled?
All
rent controlled apartments are subject to decontrol upon vacancy unless the
outgoing rent controlled tenant was forced out through harassment. However,
MANY DECONTROLLED APARTMENTS WILL FALL UNDER RENT STABILIZATION. If the apartment
is in a building with six or more units, the landlord can initially charge
whatever the market will bear, subject to the tenant’s right to file
what is known as a "Fair Market Rent Appeal." However, if the apartment
is in a building with fewer than six units, the apartment will most likely
no longer be under any rent regulation. For more information on this process,
we suggest you review the fact sheet on Fair
Market Rent Appeals issued by the New York State Division of Housing
and Community Renewal.
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How
does an apartment undergo high-rent or high-income deregulation?
The
Rent Act of 2011 provides two methods to deregulate apartments:
- First, an
owner can petition the NY State Division of Housing and Community Renewal
to deregulate an OCCUPIED apartment, if the rent for the apartment is $2,500
or more and the resident household earned $200,000 or more in two consecutive
years (income is based on the federal adjusted gross income as reported
on New York State income tax returns). This process requires that various
notices be sent to the tenants and that the tenants be given an opportunity
to respond. The DHCR must confirm that your income exceeds $200,000 per
annum prior to deregulation. One major warning is in order: DO NOT IGNORE
DHCR NOTICES in this process. Even if your income is below $200,000 you
may lose your lease for simply failing to respond to a DHCR notice. In
particular, if the DHCR sends an "Answer
to Petition and Notice to Tenant to Provide Information for Verification
of Household Income" you must respond within a 60-day limit or you
may be evicted.
- Second, if
an apartment becomes vacant and the owner can (and does) raise the legal
rent to $2,500 or more, the apartment is deregulated. For example, if
the rent of the last tenant is $2,250, the landlord could claim a vacancy
allowance under the Rent Regulation Reform Act of 20%, thereby raising
the legal rent to $2,700. Note, however, that the State Division of Housing
would consider the unit deregulated at this point so the landlord could
actually charge whatever the market will bear (not necessarily the $2,700).
For
a detailed look at how rents can be raised for vacant apartments you can
try our vacancy rent calculator.
Put your numbers into the calculator and it will tell you what the legal rent
is for a vacant rent stabilized apartment.
This
process is further detailed in our resources section web page "When
Can An Apartment Be Deregulated?" and in DHCR
Fact Sheet #36.
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My
new apartment rents for over $2,500 and appears to be deregulated - how
do I know for sure that the rent is legal?
Under
local law, the landlord may be required to provide you with a notice of deregulation,
including the amount of the last regulated rent and a copy of rent registration
filed with the New York State Division of Housing and Community Renewal.
If you did not receive such a notice, contact the New York State Division
of Housing and Community Renewal at (718) 739-6400. You may want to request
a rent history from the DHCR to determine if the current rent is lawful.
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Can
the landlord deregulate the building by not offering or signing leases?
Rent
Stabilization offers tenants two major protections.
- First, increases
in rent are regulated.
- Second, tenants
have a RIGHT to renew their leases.
In
general, a landlord must offer all stabilized tenants renewal leases. He
cannot simply deregulate a building. There are two major exceptions.
First,
under the Rent Act of 2011, a landlord can petition to deregulate
units occupied by tenants earning $200,000 or more for two consecutive years
who reside in apartments renting for more than $2,500. See the discussion
of high-income deregulation in the question above.
Second,
if a building is newly constructed or substantially rehabilitated and takes
advantage of either the 421a or J-51 tax abatement and exemption programs,
the building may only be regulated for the period of the tax abatement, often
ten years. At the end of the ten year period the apartments in the building
are deregulated (as leases expire) IF the landlord follows the proper procedures,
which includes informing tenants of the period of the tax abatement and including
a notice in their leases and each renewal that at the expiration of the period
the units will be deregulated. For further information, see our FAQ section
on J-51 and 421-a Housing.
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Disclaimer: By
providing answers to frequently asked questions, the staff of the
Rent Guidelines Board attempts to clarify the often complex programs
and regulations governing landlord tenant relations in NYC. However,
the information provided herein does not represent official policies
or opinions of the City of New York or the Rent Guidelines Board nor
should this information be used to substitute for advice of legal
counsel.
RGB Page Updated 8/3/2012
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