N.Y. ETP Law § 6 — New York Code / Act ETP / Section 6
Regulation of rents
Status: in_force

§ 6. Regulation of rents. a. Notwithstanding the provisions of any\nlease or other rental agreement, no owner shall, on or after the first\nday of the first month or other rental period following a declaration of\nemergency pursuant to section three, which date shall be referred to in\nthis act as the local effective date, charge or collect any rent in\nexcess of the initial legal regulated rent or adjusted initial legal\nregulated rent until such time as a different legal regulated rent shall\nbe authorized pursuant to guidelines adopted by a rent guidelines board\npursuant to section four.\n  b. The initial legal regulated rents for housing accommodations in a\ncity having a population of less than one million or a town or village\nas to which a declaration of emergency has been made pursuant to this\nact shall be:\n  (1) For housing accommodations subject to the emergency housing rent\ncontrol law which become vacant on or after the local effective date of\nthis act, the rent agreed to by the landlord and the tenant and reserved\nin a lease or provided for in a rental agreement; provided that such\ninitial legal regulated rent may be adjusted on application of the owner\nor tenant pursuant to subdivision a of section nine of this act; and\nprovided further that no increase of such initial regulated rent\npursuant to annual guidelines adopted by the rent guidelines board shall\nbecome effective until the expiration of the first lease or rental\nagreement taking effect after the local effective date, but in no event\nbefore one year from the commencement of such rental agreement.\n  (2) For all other housing accommodations, the rent reserved in the\nlast effective lease or other rental agreement; provided that an initial\nrent based upon the rent reserved in a lease or other rental agreement\nwhich became effective on or after January first, nineteen hundred\nseventy-four may be adjusted on application of the tenant pursuant to\nsubdivision b of section nine of this act or on application of either\nthe owner or tenant pursuant to subdivision a of such section; and\nfurther provided that if a lease is entered into for such housing\naccommodations after the local effective date, but before the effective\ndate of the first guidelines applicable to such accommodations, the\nlease may provide for an adjustment of rent pursuant to such guidelines,\nto be effective on the first day of the month next succeeding the\neffective date of such guidelines.\n  c. The initial legal regulated rents for housing accommodations in a\ncity having a population of one million or more shall be the initial\nrent established pursuant to the New York city rent stabilization law of\nnineteen hundred sixty-nine as amended.\n  d. Provision shall be made pursuant to regulations under this act for\nindividual adjustment of rents where:\n  (1) there has been a substantial modification or increase of dwelling\nspace, or installation of new equipment or improvements or new furniture\nor furnishings, provided in or to a tenant's housing accommodation, on\nwritten informed tenant consent to the rent increase. In the case of a\nvacant housing accommodation, tenant consent shall not be required.\nExcept as provided in subparagraph (B) of this paragraph, the increase\nin the legal regulated rent for the affected housing accommodation shall\nbe one-one hundred sixty-eighth, in the case of a building with\nthirty-five or fewer housing accommodations or one-one hundred eightieth\nin the case of a building with more than thirty-five housing\naccommodations where such increase takes effect on or after the\neffective date of the chapter of the laws of two thousand nineteen that\namended this paragraph, of the total actual cost incurred by the\nlandlord up to an amount set forth in this paragraph in providing such\nreasonable and verifiable modification or increase in dwelling space,\nfurniture, furnishings, or equipment, including the cost of installation\nbut excluding finance charges and any costs that exceed reasonable costs\nestablished by rules and regulations promulgated by the division of\nhousing and community renewal. Such rules and regulations shall include:\n(i) requirements for work to be done by licensed contractors and a\nprohibition on common ownership between the landlord and the contractor\nor vendor; and (ii) a requirement that the owner resolve within the\ndwelling space all outstanding hazardous or immediately hazardous\nviolations of the Uniform Fire Prevention and Building Code (Uniform\nCode), New York City Fire Code, or New York City Building and Housing\nMaintenance Codes, if applicable. Provided further that an owner who is\nentitled to a rent increase pursuant to this paragraph shall not be\nentitled to a further rent increase based upon the installation of\nsimilar equipment, or new furniture or furnishings within the useful\nlife of such new equipment, or new furniture or furnishings. Provided\nfurther that the recoverable costs incurred by the landlord, pursuant to\nthis paragraph, shall be limited to an aggregate cost pursuant to the\nfollowing:\n  (A) thirty thousand dollars that may be expended in a fifteen-year\nperiod beginning with the first individual apartment improvement on or\nafter June fourteenth, two thousand nineteen, provided further that:\n  (1) if there is a tenant in place at the time the individual apartment\nimprovement is undertaken, no costs incurred by the landlord shall be\nrecoverable pursuant to this subparagraph unless the landlord obtains\nwritten tenant consent from the tenant in place at the time the\nindividual apartment improvement was undertaken;\n  (2) increases to the legal regulated rent pursuant to this\nsubparagraph shall be permanent; and\n  (3) the thirty thousand dollars may be expended, in the aggregate, on\nany number of separate individual apartment improvements in a\nfifteen-year period, but in no event shall costs above thirty thousand\ndollars be recoverable in a fifteen-year period pursuant to this\nsubparagraph.\n  (B) fifty thousand dollars that may be expended in a fifteen-year\nperiod beginning with the first individual apartment improvement on or\nafter June fourteenth, two thousand nineteen, pursuant to regulation,\noperational bulletin or such other guidance as the division of housing\nand community renewal may issue, provided further that:\n  (1) costs shall only be recoverable by a landlord pursuant to this\nsubparagraph for an individual apartment improvement undertaken during a\nvacancy;\n  (2) costs shall only be recoverable by a landlord pursuant to this\nsubparagraph for an individual apartment improvement if (i) the\napartment was timely registered as vacant by no later than the\nthirty-first of December in each of two thousand twenty-two, two\nthousand twenty-three, and two thousand twenty-four, provided that a\nlandlord may recover costs on this basis no more than once, or (ii) if\nthe apartment is vacant following a period of continuous occupancy of at\nleast twenty-five years that occurred immediately prior to the\ncommencement of such individual apartment improvement;\n  (3) costs shall only be recoverable by a landlord pursuant to this\nsubparagraph if such landlord has received prior certification to\nrecover costs pursuant to this subparagraph from the division of housing\nand community renewal based on establishing that the landlord satisfies\none of the eligibility criteria delineated in clause two of this\nsubparagraph, provided further that such certification shall not be\ndeemed as evidence that the work performed or costs claimed for the\nindividual apartment improvement was substantiated or to otherwise act\nas a defense in any subsequent rent overcharge proceeding,\ndetermination, or audit;\n  (4) increases to the legal regulated rent pursuant to this\nsubparagraph shall be permanent;\n  (5) the increase in the legal regulated rent for the affected housing\naccommodation shall be one-one hundred forty-fourth, in the case of a\nbuilding with thirty-five or fewer housing accommodations or one-one\nhundred fifty-sixth in the case of a building with more than thirty-five\nhousing accommodations where such increase takes effect on or after the\neffective date of the chapter of the laws of two thousand twenty-four\nthat amended this paragraph, of the total actual cost incurred by the\nlandlord up to fifty thousand dollars in providing such reasonable and\nverifiable modification or increase in dwelling space, furniture,\nfurnishings, or equipment, including the cost of installation but\nexcluding finance charges and any costs that exceed reasonable costs\nestablished by rules and regulations promulgated by the division of\nhousing and community renewal;\n  (6) costs shall only be recoverable by a landlord pursuant to this\nsubparagraph for an individual apartment improvement if, immediately\nprior to undertaking such individual apartment improvement, the landlord\nsubmits to the division of housing and community renewal any evidence\nthat the division of housing and community renewal deems necessary and\nrequests pursuant to regulation, operational bulletin or other guidance,\ndemonstrating that the improvement was necessitated by a sub-standard\ncondition or exceeding its useful life immediately prior to the\nlandlord's work to improve the unit and the landlord's planned work to\nimprove the unit. Such evidence shall include, but shall not be limited\nto, photos of any areas, aspects or appliances in the apartment that\nwill be improved, and any necessary permits required to undertake the\nimprovements;\n  (7) costs shall only be recoverable by a landlord pursuant to this\nsubparagraph for an individual apartment improvement if, immediately\nsubsequent to undertaking the individual apartment improvement, the\nlandlord submits to the division of housing and community renewal any\nevidence that the division of housing and community renewal deems\nnecessary and requests pursuant to regulation, operational bulletin or\nother guidance, evidence of the completed work. Such evidence shall\ninclude, but shall not be limited to, photographs of the completed work,\nitemized receipts for all parts, materials, appliances, and labor costs,\nand proof of payment. Provided further, the division of housing and\ncommunity renewal shall require the payment of a fee that equals one\npercent of the amount claimed for the individual apartment improvement\nat the time of such filing;\n  (8) for costs recoverable pursuant to item (ii) of clause two of this\nsubparagraph, the fifty thousand dollars may be expended, in the\naggregate, on any number of separate individual apartment improvements\nin a fifteen-year period, but in no event shall costs above fifty\nthousand dollars be recoverable in a fifteen-year period pursuant to\nthis subparagraph;\n  (9) the division of housing and community renewal may perform an audit\nof any individual apartment improvement conducted pursuant to this\nsubparagraph to determine whether the individual apartment improvement\nwas undertaken in the manner described and to the extent claimed by the\nlandlord, whether the costs claimed were substantiated by records, and\nwhether the rent was properly adjusted. Such audit may incorporate an\ninspection of the accommodation at bar. The landlord and the tenant\nliving in the accommodation may participate in such audit. In the event\nthe audit finds that the recoverable costs claimed by the landlord\ncannot be substantiated, the resulting overcharge shall be considered to\nbe willful. In addition, the division of housing and community renewal\nmay issue any fines or penalties set forth in regulations;\n  (10) the division of housing and community renewal shall perform\nrandom on-site inspections, as it deems necessary, for any unit for\nwhich the owner seeks to recover costs pursuant to this subparagraph;\nand\n  (11) no owner shall be eligible for the rent increase based on\nindividual apartment improvements pursuant to this subparagraph if,\nwithin the five year period prior to filing such individual apartment\nimprovement, any unit within any building owned by any owner of the\nbuilding in which the unit for which the owner seeks an individual\napartment improvement is located, including but not limited to partial\nor beneficial owners, has been the subject of an award or determination\nby the division of housing and community renewal or a court of competent\njurisdiction for treble damages due to an overcharge or the owner of the\nbuilding in which the unit is located has been the subject of an award\nor determination by the division of housing and community renewal or a\ncourt of competent jurisdiction for harassment of any tenants, provided\nthat such owner shall provide an affidavit confirming such owner's\neligibility under this clause to the division of housing and community\nrenewal at the same time as, and in addition to, any other materials the\ndivision of housing and community renewal shall require an owner to\nsubmit pursuant to clause six of this subparagraph, and provided further\nthat such affidavit shall not be deemed to be evidence of compliance\nwith this clause or a defense in any subsequent rent overcharge\nproceeding, determination, or audit.\n  (2) there has been since January first, nineteen hundred seventy-four\nan increase in the rental value of the housing accommodations as a\nresult of a substantial rehabilitation of the building or the housing\naccommodation therein which materially adds to the value of the property\nor appreciably prolongs its life, excluding ordinary repairs,\nmaintenance, and replacements, or\n  (3) there has been since January first, nineteen hundred seventy-four\na major capital improvement essential for the preservation, energy\nefficiency, functionality, or infrastructure of the entire building,\nimprovement of the structure including heating, windows, plumbing and\nroofing, but shall not be for operation costs or unnecessary cosmetic\nimprovements. An adjustment under this paragraph shall be in an amount\nsufficient to amortize the cost of the improvements pursuant to this\nparagraph over a twelve-year period for a building with thirty-five or\nfewer housing accommodations, or a twelve and one-half period for a\nbuilding with more than thirty-five housing accommodations and shall be\nremoved from the legal regulated rent thirty years from the date the\nincrease became effective inclusive of any increases granted by the\napplicable rent guidelines board, for any determination issued by the\ndivision of housing and community renewal after the effective date of\nthe chapter of the laws of two thousand nineteen that amended this\nparagraph. Temporary major capital improvement increases shall be\ncollectable prospectively on the first day of the first month beginning\nsixty days from the date of mailing notice of approval to the tenant.\nSuch notice shall disclose the total monthly increase in rent and the\nfirst month in which the tenant would be required to pay the temporary\nincrease. An approval for a temporary major capital improvement increase\nshall not include retroactive payments. The collection of any increase\nshall not exceed two percent in any year from the effective date of the\norder granting the increase over the rent set forth in the schedule of\ngross rents, with collectability of any dollar excess above said sum to\nbe spread forward in similar increments and added to the rent as\nestablished or set in future years. Upon vacancy, the landlord may add\nany remaining balance of the temporary major capital improvement\nincrease to the legal regulated rent. Notwithstanding any other\nprovision of the law, the collection of any rent increases for any\nrenewal lease commencing on or after June 14, 2019, due to any major\ncapital improvements approved on or after June 16, 2012 and before June\n16, 2019 shall not exceed two percent in any year for any tenant in\noccupancy on the date the major capital improvement was approved, or\n  (3-a) an application for a temporary major capital improvement\nincrease has been filed, a tenant shall have sixty days from the date of\nmailing of a notice of a proceeding in which to answer or reply. The\nstate division of housing and community renewal shall provide any\nresponding tenant with the reasons for the division's approval or denial\nof such application; or\n  (4) an owner by application to the state division of housing and\ncommunity renewal for increases in the rents in excess of the rent\nadjustment authorized by the rent guidelines board under this act\nestablishes a hardship, and the state division finds that the rate of\nrent adjustment is not sufficient to enable the owner to maintain\napproximately the same ratio between operating expenses, including taxes\nand labor costs but excluding debt service, financing costs, and\nmanagement fees, and gross rents which prevailed on the average over the\nimmediate preceding five year period, or for the entire life of the\nbuilding if less than five years, or\n  (5) as an alternative to the hardship application provided under\nparagraph four of this subdivision, owners of buildings acquired by the\nsame owner or a related entity owned by the same principals three years\nprior to the date of application may apply to the division for increases\nin excess of the level of applicable guideline increases established\nunder this law based on a finding by the commissioner that such\nguideline increases are not sufficient to enable the owner to maintain\nan annual gross rent income for such building which exceeds the annual\noperating expenses of such building by a sum equal to at least five\npercent of such gross rent. For the purposes of this paragraph,\noperating expenses shall consist of the actual, reasonable, costs of\nfuel, labor, utilities, taxes, other than income or corporate franchise\ntaxes, fees, permits, necessary contracted services and non-capital\nrepairs, insurance, parts and supplies, management fees and other\nadministrative costs and mortgage interest. For the purposes of this\nparagraph, mortgage interest shall be deemed to mean interest on a bona\nfide mortgage including an allocable portion of charges related thereto.\nCriteria to be considered in determining a bona fide mortgage other than\nan institutional mortgage shall include; condition of the property,\nlocation of the property, the existing mortgage market at the time the\nmortgage is placed, the term of the mortgage, the amortization rate, the\nprincipal amount of the mortgage, security and other terms and\nconditions of the mortgage. The commissioner shall set a rental value\nfor any unit occupied by the owner or a person related to the owner or\nunoccupied at the owner's choice for more than one month at the last\nregulated rent plus the minimum number of guidelines increases or, if no\nsuch regulated rent existed or is known, the commissioner shall impute a\nrent consistent with other rents in the building. The amount of hardship\nincrease shall be such as may be required to maintain the annual gross\nrent income as provided by this paragraph. The division shall not grant\na hardship application under this paragraph or paragraph four of this\nsubdivision for a period of three years subsequent to granting a\nhardship application under the provisions of this paragraph. The\ncollection of any increase in the rent for any housing accommodation\npursuant to this paragraph shall not exceed six percent in any year from\nthe effective date of the order granting the increase over the rent set\nforth in the schedule of gross rents, with collectability of any dollar\nexcess above said sum to be spread forward in similar increments and\nadded to the rent as established or set in future years. No application\nshall be approved unless the owner's equity in such building exceeds\nfive percent of: (i) the arms length purchase price of the property;\n(ii) the cost of any capital improvements for which the owner has not\ncollected a surcharge; (iii) any repayment of principal of any mortgage\nor loan used to finance the purchase of the property or any capital\nimprovements for which the owner has not collected a surcharge; and (iv)\nany increase in the equalized assessed value of the property which\noccurred subsequent to the first valuation of the property after\npurchase by the owner. For the purposes of this paragraph, owner's\nequity shall mean the sum of (i) the purchase price of the property less\nthe principal of any mortgage or loan used to finance the purchase of\nthe property, (ii) the cost of any capital improvement for which the\nowner has not collected a surcharge less the principal of any mortgage\nor loan used to finance said improvement, (iii) any repayment of the\nprincipal of any mortgage or loan used to finance the purchase of the\nproperty or any capital improvement for which the owner has not\ncollected a surcharge, and (iv) any increase in the equalized assessed\nvalue of the property which occurred subsequent to the first valuation\nof the property after purchase by the owner.\n  This subdivision shall apply to accommodations outside a city of one\nmillion or more.\n  e. Notwithstanding any contrary provisions of this act, on and after\nJuly first, nineteen hundred eighty-four the legal regulated rent shall\nbe the rent registered pursuant to section twelve-a of this act subject\nto any modification imposed pursuant to this act.\n  f. Notwithstanding any inconsistent provision of law, rule,\nregulation, contract, agreement, lease or other obligation, no owner, in\naddition to the authorized collection of rent, shall demand, receive or\nretain a security deposit or advance payment which exceeds the rent of\none month for or in connection with the use or occupancy of a housing\naccommodation by (i) any tenant who is sixty-five years of age or older\nfor any lease or lease renewal entered into after July 1, 1996 or (ii)\nany tenant who is receiving disability retirement benefits or\nsupplemental security income pursuant to the federal social security act\nfor any lease or lease renewal entered into after July 1, 2002.\n  f-1. An owner, lessor or agent thereof shall be prohibited from\nassessing a lessee any fee, surcharge or other charges for legal\nservices in connection with the operation or rental of a residential\nunit unless the owner, lessor or agent has the legal authority to do so\npursuant to a court order. Legal services include, but are not limited\nto, court fees, legal representation, attorney fees, notary public\ncharges, and administrative fees incurred by the owner, lessor or agent\nin connection with management of the building, including actions and\nproceedings in a court of law. Any agreement or assessment to the\ncontrary shall be void as contrary to public policy.\n  g. No owner of a housing accommodation subject to the provisions of\nthis section shall impose any surcharge for the installation and use of\na tenant-installed air conditioner unit where the tenant pays for\nelectric utility service.\n