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Decontrol and Destabilization FAQ


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.

In addition: The NYS Homes and Community Renewal's Office of Rent Administration (DHCR) also offers useful information on their Web site, with special web pages for both owners and tenants, as well as their own FAQ page.

 


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.

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 DHCR Fact Sheet #6 issued by the NYS Division of Housing and Community Renewal (DHCR).

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How does an apartment undergo high-rent or high-income deregulation?

The Rent Act of 2015 amends deregulation to include:

  • The rent threshold for high-rent vacancy deregulation and high income high-rent deregulation was raised from $2,500 to $2,700. The threshold will be adjusted January 1, 2016 and annually thereafter by the one year renewal lease guideline percentage increase issued the prior year by the Rent Guidelines Board for the locality.

For more information on how the Rent Act of 2015 changes procedures for deregulation, please contact the NYS Division of Housing and Community Renewal (DHCR), the agency that regulates rent stabilized apartments in NYC, or visit their website.

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My new apartment rents for over $2,700 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 NYS Division of Housing and Community Renewal (DHCR). If you did not receive such a notice, contact DHCR. 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. S/he cannot simply deregulate a building. There are two major exceptions.

First, under the rent laws, a landlord can petition to deregulate units occupied by tenants earning above a certain level of income and in apartments renting above a certain level of rent. 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 421-a 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.

In addition: The NYS Homes and Community Renewal's Office of Rent Administration (DHCR) also offers useful information on their Web site, with special web pages for both owners and tenants, as well as their own FAQ page.

RGB Page Updated 6/1/2016

 


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