DHCR (Division of Housing and Community Renewal)

Luxury Deregulation

Presently for rent controlled and rent stabilized apartments, the landlords have an opportunity and mechanism, through DHCR, to deregulate apartments. If the legal rent is above $2,733.75 (this deregulation threshold rent will increase each year in accordance with the Rent Guideline Board Order for one [1] year renewal leases), a landlord may serve an ICF (Income Certification Form) upon any rent-regulated tenants – rent stabilized and rent controlled – before April 30 (of each year). Thereafter, before June 30 of each year, a Luxury Deregulation Petition can be filed. The DHCR views tax records with Department of Taxation & Finance (DTF) – if the household income, reported to DTF, is above $200,000.00 for each of the two (2) preceding years, the apartment may be subject to deregulation. Buildings receiving J-51a; 421-a tax abatements do not qualify. Similarly, tenants who receive SCRIE or DRIE are not subject to deregulation

Defense of Rent Overcharge Proceedings/Improper Deregulation

Tenants may file Overcharge Complaints with the DHCR. In order to properly defend such a Complaint, the Landlord must be able to demonstrate the rent increases taken over the past four (4) years (for Rent Stabilized tenants) have been lawful. For rent controlled tenants or tenants claiming fraud in response to Landlord’s deregulation of an apartment, the DHCR may look back to the commencement of the tenancy. If MCI’s were included, proof must be kept. If the individual tenant had a rent increase because of individual apartment increase (IAI – 1/40th for buildings having 35 units or less; 1/60th for buildings having more than 35 units, documentary proof – contracts, proof of payment – must be produced. Operational Bulletin 2016-1, supercedes DHR Policy Statement 90-10 regarding proof of IAI).

In order to avoid a possible treble damage finding, the Owner should refund any overcharge plus interest, before their time to answer the Complaint has expired.

Defense of Harassment Proceedings

While Tenants can now raise harassment in Civil Court Housing cases, they are still more likely to file such a Complaint with the DHCR. To defend such a case, the Landlord is given an opportunity to respond in answer form and, if the Agency feels it is appropriate, a hearing will be conducted. The Landlord must bring all the individuals with any information responding to the claims, date of the hearing.

Defense of Services Reduction Complaints

Tenants can file Complaints claiming services have been reduced. As soon as the Landlord gets the Notice, s/he should try and arrange access to investigate and make any necessary repairs. The DHCR will always conduct an inspection before making a decision. The Landlord has an opportunity to submit a response but the inspection will be the determining factor.

If a rent reduction is issued –rent will be rolled back (per the Order) for rent stabilized tenants and reduced by specific amounts for rent controlled tenants. The only way to restore the rent is to get the repairs done and file the appropriate Rent Restoration Application.

Rent Restoration Applications

Once the DHCR has issued a Rent Reduction Order, the only way to restore the rent is through the Rent Restoration Application. The owner must get the work done, include copies of any and all contracts, pictures showing work, proof of payment and completion of the appropriate application. Tenants can respond and an Inspection will follow if tenants do not acknowledge work is done.

Modification of Services Application

If an Owner desires to change a base date service, the appropriate mechanism is to file a Modification of Services Application. The Application requires specific explanation of the services as they currently exist (i.e.: elevators, postal delivery) and the specific changes sought to be made. No changes should be made until the DHCR rules on the application. (An Opinion Letter can be sent but any response is not dispositive and will not protect the Owner from a decrease in services complaint and/or finding).

Removing Apartments From Rent Regulation by Non-Profit Organizations

There is a mechanism in place to allow removal of apartments from rent regulation. Complete forms/filings demonstrating the purpose for reclaiming the apartments must be submitted to the Agency. Rent controlled and rent stabilized apartments are handled somewhat differently but DHCR approval is required before the apartments can be removed from rent regulation.

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