HCR-28-12-00005-A Regulations Govern the Implementation of the New York City Rent Control Laws

10/17/12 N.Y. St. Reg. HCR-28-12-00005-A

NEW YORK STATE REGISTER

VOLUME XXXIV, ISSUE 42

October 17, 2012

RULE MAKING ACTIVITIES

DIVISION OF HOUSING AND COMMUNITY RENEWAL

NOTICE OF ADOPTION

 

I.D No. HCR-28-12-00005-A

Filing No. 993

Filing Date. Oct. 02, 2012

Effective Date. Oct. 17, 2012

Regulations Govern the Implementation of the New York City Rent Control Laws

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Action taken:

Amendment of sections 2200.2(f)(19), (20), 2202.4(a)(2), 2206.3, 2211.2, 2211.3, 2211.4 and 2211.5 of Title 9 NYCRR.

Statutory authority:

The Omnibus Housing Act, L. 1983, ch. 403, section 28(not subdivided); Administrative Code of the City of New York section 26-405g(1); and L. 2011, ch. 97, section 44, part B

Subject:

Regulations govern the implementation of the New York City Rent Control Laws.

Purpose:

To comply with L. 2011, ch. 97, part B and L. 2009, ch. 480.

Text or summary was published

in the July 11, 2012 issue of the Register, I.D. No. HCR-28-12-00005-P.

Final rule as compared with last published rule:

No changes.

Text of rule and any required statements and analyses may be obtained from:

Gary R. Connor, General Counsel, Division of Housing and Community Renewal, 25 Beaver St., 7th Fl., New York, NY 10004, [phone], email: [e-mail]

Assessment of Public Comment

A Notice of Proposed Rule Making was published in the State Register on July 11, 2012. The Division of Housing and Community Renewal (DHCR) received comments submitted to the agency and/or presented at the public hearing held on the proposed rules by the agency on August 28, 2012. The comments were from individual tenants, tenant advocacy organizations, and landlord advocacy organizations. None of the comments were specifically related to the proposed amendments. Instead, most of the comments expressed that the proposed amendments were merely technical changes made in order to conform to the change in the rent laws pursuant to the 2011 and 2009 Laws. Although the comments were not specifically related to the proposed amendments, a summary of the predominant issues raised by the comments is provided below. While these comments do not specifically relate to the proposed amendments, DHCR will take into consideration these comments for any future amendments.

Issue #1

Major Capital Improvements (MCI): Most of the comments on this issue expressed the importance of changes to the MCI system by having greater oversight by DHCR. Some of the frequent suggestions include not allowing an MCI increase based on cosmetic improvements or where based on past landlord negligence; not allowing an MCI increase where more than two hazardous conditions or immediately hazardous conditions exist at the premises; not allowing an MCI where a landlord had been found guilty of tenant harassment; not allowing an MCI increase where there is a rent reduction order in place, or a reduction in services complaint is under investigation at the time of the application; not allowing an MCI where the improvements can be funded through other governmental agencies. Some comments suggested that the MCI increases should be a temporary surcharge until the work is paid for instead of a permanent increase to the rent and that DHCR should facilitate tenant participation in the MCI review process and provide easy access to relevant documents. Finally, there was a suggestion that DHCR better clarify the nature and extent of improvements which will and will not be granted.

Issue #2

Individual Apartment Improvements (IAI): Most of the comments on this issue expressed the importance of more oversight by DHCR of the IAI system which permits increases to the rent based on improvements done in an apartment usually when the apartment is vacant without first requiring DHCR’s approval. Some of the frequent suggestions include; requiring the landlord to apply to DHCR for pre-approval where the vacancy improvements would increase the rent by more than 20%; requiring the landlord to submit documentation of the type and costs of all IAIs and DHCR should conduct random audits of the documentation; disallowing increases for cosmetic improvements or for correction of prior neglect; establishing price guidelines for work and material based on the reasonable cost of the work; requiring the use of licensed contractors; DHCR should provide tenants with written notice of the apartment rent history, detailed descriptions of the work claimed by the landlord, and notice of the right to file a Complaint of Rent Overcharge or alternatively landlords should be required to provide such written notice.

Issue #3

Rent Registrations: Most of the comments on this issue expressed the importance of eliminating the changes to the regulations in 2000. Frequently suggested were the following; that the base date rent should be the rent listed in the most recent prior registration; require full documentation to support amended registrations and require notice to tenants of such amendments; permit challenges to late and amended registrations filed after the base date; repeated failure to register by a landlord should lead to investigations and possible fines.

Issue #4

Roberts v. Tishman Speyer decision/J-51: Most of the comments on this issue expressed the importance of DHCR taking action to re-regulate unlawfully deregulated apartments in J-51 buildings impacted by Roberts v. Tishman Speyer and that DHCR should work to develop a method for coordinating its tracking systems with the systems maintained by NYC agencies to identify apartments that were improperly deregulated.

Issue #5

Remaining Family Members: the comments on this issue expressed the idea that DHCR should amend the regulations to supersede recent court decisions that have denied claims by tenants’ family members. The comments suggested that DHCR should specifically permit succession based on co-occupancy prior to the tenant of record’s physical vacature of the apartment, regardless of whether the tenant formally surrendered his tenancy rights to the landlord.

Issue #6

High-income deregulation: The comment on this issue expressed that DHCR’s processing of the income certification routinely takes longer than the time required by statute. It was proposed that DHCR explore changes in operations and procedures so the process can better reflect statutory time frames. Also suggested was that DHCR use its resources to prevent over-income tenants from shielding income from the determination of household income so high income tenants cannot manipulate the rent regulation system.

Issue #7

Four Year Rule: The comment on this issue suggested the following: DHCR should restore the original legislative intent, which was that the rent be determined in accordance with the registration documents that are a matter of public record, as long as they remain unchallenged for four years; DHCR’s orders and prior rent registration records, no matter how long ago they were issued, should be considered in determining the legal regulated rent.

Issue #8

Owner Use Evictions: The comment on this issue suggested that DHCR amend the language which allows an owner to take over “one or more” regulated apartments for owner occupancy. The suggestion was that DHCR limit the definition of “more” to a definite and reasonable number, such as three apartments in a building containing twenty or fewer units, with a slightly higher number in larger buildings.

Issue #9

Preferential Rents: The comment on this issue suggested that DHCR amend the regulation so that it is consistent with recent court decisions and make clear that in order to “establish” a legal regulated rent that is higher than the rent charged, landlords must set forth both the legal regulated rent and the preferential rent in all leases and registration statements. Further, it was suggested that DHCR amend the regulations to state that preferential rents are permanent when there is language in a tenant’s lease stating that it is permanent and landlords should be required to inform tenants that they have four years to challenge the first non-preferential rent.

Issue #10

Overcharge complaints: The comment on this issue suggested that DHCR alter its processing procedures for overcharge complaints so that delays are eliminated and immediate action be taken to eliminate the extensive backlog of cases. Further, it was suggested that DHCR move from strictly responding to rent overcharge complaints from individual tenants to proactively investigating entire buildings where multiple and/or repeated overcharges are likely taking place.

Issue #11

Vacancy Decontrol: The comment on this issue suggested the following changes to reduce the frequency of illegal vacancy deregulation: significant penalties against owners who illegally decontrol units based on fraudulent claims; owners must apply for permission to deregulate units based on vacancy decontrol; random audits of applications for vacancy decontrol conducted and DHCR should use its subpoena powers to evaluate questionable cases; owner required to provide first non-regulated tenant of decontrolled units written notice explaining that the apartment was deregulated and that the tenant has the right to appeal the decision to DHCR; if owner fails to apply for deregulation within four years after the prior stabilized rent registration, the owner loses the right to apply.

Issue #12

Rent Restorations: The comment on this issue suggested that DHCR rescind the 2000 amendment which created a rebuttable presumption that a service has been restored when an owner submits an engineer’s or architect’s affidavit. Also suggested was that a restoration application should not be granted while hazardous or immediately hazardous violations placed by other agencies that are the subject of the rent reduction remain.

Issue #13

Demolitions: The comment on this issue suggested the following: when an owner submits a demolition application, he/she must be required to submit approved building plans and proof of financial ability to demolish the existing building and construct a new one; for an application to be approved, the owner must propose to raze the entire building to the ground; the owner must prove that the building being considered for demolition is unsafe; DHCR should restore the tenants’ right to a hearing; if it is established that the owner harassed tenants in order to force them from the units, the owner’s application should be denied; discovery should be permitted in demolition proceedings.

Issue #14

Harassment: The comment on this issue suggested the following: DHCR must prioritize and expedite cases that significantly affect the tenant’s use of the apartment or the tenant’s health and safety; complaints should be tracked by building and landlord and the data used to expedite cases involving multiple accusations against the same landlord; an appeals process must be implemented to permit tenants to request a hearing even if DHCR does not recommend one; a fine should be mandatory if the landlord is found guilty and fines should be imposed for every individual act of harassment; the current provision that prohibits owners from collecting rent increases until there is a finding that the harassment has ended must be strictly enforced; the threshold for lifting a harassment finding should be higher; harassment findings must not be lifted simply because the tenant has moved out; tenants should be made aware that they may report incidents and behaviors that they consider harassment, even if not specifically stated on the DHCR form; DHCR should utilize the resources of the housing courts and other agencies to gather proof of landlord’s harassment; DHCR should adopt a definition of harassment that mirrors the definition used in New York City’s Tenant Protection Act.