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Rents and Rent Increases FAQ

General
Preferential Rents
Rent Overcharge
Rent Increases due to Repairs (MCI's & IAI's)

General

Preferential Rents

Rent Overcharge

Rent Increases due to Building/Apartment Improvements (MCI's & IAI's)


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.


I'm not sure my apt. is stabilized - How much can my rent be raised?

To find out whether or not your apartment is rent stabilized, contact the New York State Division of Housing and Community Renewal (DHCR). Ask them if the apartment is or should be rent stabilized, and if it is, ask for a "rent history." Also, if the apartment is rent stabilized, ask your landlord to provide a copy of the rent stabilization "lease rider." If the apartment is rent stabilized, see the answer to the next question.

If you find that your apartment is not rent stabilized, there is no limit on the rent increase that can be charged at the end of your lease. If you have no lease, or your lease has expired, you are considered a "month-to-month" tenant. According to the NYS Attorney General's Office, a New York City landlord may raise the rent of a month-to-month tenant with the consent of the tenant. However, if the tenant does not consent, the landlord can terminate the tenancy by giving appropriate notice (Real Property Law ß232-b). You may wish to read further on this issue by visiting the New York State Attorney General's Tenant's Rights Guide regarding Month-to-Month tenancy here.

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How do rents increase in stabilized apartments?

If you are rent stabilized, your rent can only be increased in accordance with the rent guidelines issued by the Rent Guidelines Board or on a specific ground set forth in the Rent Stabilization Code. The most common grounds for rent increases outside of the annual guidelines are major capital improvement increases, individual apartment increases, increases resulting from high income deregulation (in which case the apartment is no longer stabilized), and increases permitted because of owner hardship. To see how much the rent may increase based on our rent guidelines, refer to our most recent Apartment Order. Rent increases based on other factors, like apartment improvements, can be found in this fact sheet. Also see DHCR's Overcharge FAQ webpage.

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I know that the rent stabilization law has been extended. When is it next coming up for renewal?

Rent laws were most recently renewed on June 24, 2011 by the Rent Act of 2011. That law is effective through June 15, 2015.

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How do I find out if my building has rent regulated apartments?

On this web site, we maintain a list of stabilized buildings. However, our list is not comprehensive, so it's best to contact the New York State Division of Housing and Community Renewal at (718) 739-6400.

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Are there any restrictions on rent increases in my unregulated apartment?

No, unless there is currently a lease in effect. When a lease expires, or if there is no lease in effect, an owner of an unregulated apartment may charge what the market will bear. Of course, it is always worthwhile to check to see if the apartment was, if previously regulated, lawfully deregulated. For example, if the apartment rents for over $2,500 and the prior tenant paid $800, the increase may only be justified by legal adjustments, such as the vacancy allowance and individual apartment improvement increases. To determine if the increase to a deregulated level was lawful, contact the New York State Division of Housing and Community Renewal at (718) 739-6400, and ask for a rent history.

If you have no lease, or your lease has expired, you are considered a "month-to-month" tenant. According to the NYS Attorney General's Office, a New York City landlord may raise the rent of a month-to-month tenant with the consent of the tenant. However, if the tenant does not consent, the landlord can terminate the tenancy by giving appropriate notice (Real Property Law ß232-b). You may wish to read further on this issue by visiting the New York State Attorney General's Tenant's Rights Guide regarding Month-to-Month tenancy here.

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Where can one go to get information on the availability of rent stabilized apartments?

We have a list of rent stabilized properties, but it is not comprehensive. We do not have information on apartment availability, nor do we have ownership information. You will have to contact the building owner or managing agent yourself to check on the availability of a particular apartment. The name and contact information of the owner or managing agent is frequently posted in the lobby of a building. You can also obtain owner information by visiting HPD Online or the NYC Dept. of Finance City Register Information page.

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Can my landlord demand rent payment by cash or money order only?

No. According to the NYS Division of Housing and Community Renewal (DHCR), the state agency that administers the rent laws, cash, money orders, personal checks and cashier's checks are all valid ways to pay your rent, but your landlord cannot demand a specific form of payment unless the tenant agrees to it in a stipulation in Housing Court.

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Am I entitled to a receipt for my rent payments?

Landlords must provide tenants with a written receipt when rent is paid in cash, a money order, a cashier's check or in any form other than personal check of a tenant. Where a tenant pays the rent by personal check, (s)he may request in writing a rent receipt from the landlord. The receipt must state the payment date, the amount, the period for which the rent was paid, and the apartment number. The receipt must be signed by the person receiving the payment and state his or her title. (Real Property Law §§235-e)

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I have a stabilized apartment outside NYC - Are renewal amounts different from NYC?

Under the Emergency Tenant Protection Act (ETPA), each New York County with rent stabilized housing has its respective Rent Guidelines Board. We suggest you contact the New York State Division of Housing and Community Renewal (DHCR), the state agency which administers the rent laws, to find out the most recent guidelines for your county.

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Are stabilized increases based on the legal or preferential rent?

Under rent regulations amended in June, 2003, existing tenants who pay a "preferential rent" (meaning that the owner initially agreed to an amount lower than the legal rent) may not be entitled to renewal increases based upon the preferential rent amount. For instance, if the legal rent is $1,200 but the landlord charges $1,000, any increase may be based on the legal rent of $1,200. Thus, if the tenant chooses a one-year lease renewal and the guideline increase is 4.5% for a one year lease, the tenant in this example may face a maximum increase of $254, raising the maximum rent to $1,254.

In April, 2008, DHCR updated the procedure for determining whether preferential rents have to be charged for the remainder of the lease term. Please read this fact sheet on preferential rents.

The only way you can ascertain the legal rent is to contact the New York State Division of Housing and Community Renewal (DHCR), the state agency that administers the rent laws, at (718) 739-6400, and ask for a determination or a review of their records on the apartment in question.

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My lease has a "rider" giving me $200 credit per month - What is my real rent?

This is what is known as a preferential rent. There are many reasons why a landlord would reduce the "legal" rent, or the higher amount on your lease, most often, a landlord offers a preferential rent when he/she is unable to rent the apartment at its full legal value due to aspects of the rental market such as demand for housing, location or the availability of housing.

See also the response to the above question.

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How can I find out what the previous tenant paid in rent?

First, you should make sure that the apartment is (or was) rent stabilized. In some cases (e.g., rent over $2,500, or if the building is a co-op), the building may contain rent stabilized units, but not all of the apartments in the building may be stabilized. Verify with the landlord that the unit is rent stabilized. We have a list of rent stabilized properties, but it is not comprehensive.

When you sign a stabilized lease a stabilization "Lease Rider" should be attached to your lease. The lease rider should contain the previous rent (according to the landlord) and the reasons why it was increased.

It is not possible to get an official rent figure for the previous tenant (unless you ask the previous tenant himself/herself) until you move into the apartment. For confidentiality reasons, the NY State Division of Housing and Community Renewal (DHCR), the state agency which administers the rent laws (718-739-6400) will not give you the rent history for the apartment until you sign a lease. Thus, if you like the apartment and it is stabilized, move in and then get the previous rent. If it seems inaccurate or incorrect, you can file a rent overcharge complaint with the New York State Division of Housing and Community Renewal.

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I recently discovered that my rent has tripled from the prior tenant - Should I file an overcharge complaint?

You should probably request access to your apartment's actual rent history, obtained by contacting the New York State Division of Housing and Community Renewal (DHCR) at 718-739-6400. Also see DHCR's Overcharge FAQ webpage.

If the prior tenant was rent controlled you may consider filing a Fair Market Rent Appeal (FMRA). This may or may not result in the finding of a rent overcharge depending upon the various factors used in calculating the new rent. See the DHCR fact sheet on FMRAs. Also, your apartment may have undergone high rent deregulation. Thus, if the prior tenant paid $1,000 per month and the landlord took the vacancy allowance and made substantial improvements to bring the legal rent over $2,500, the apartment would no longer be subject to rent regulation and an increase to $3,000 or $4,000, or any higher amount would be lawful.

However, you may have been overcharged. The NY State Division of Housing and Community Renewal (DHCR) is the agency which administers the rent laws and ONLY they can rule on an overcharge complaint. The Rent Guidelines Board has no jurisdiction in this area. Contact DHCR at 718-739-6400 if you would like to file an overcharge complaint.

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What is an MCI increase?

When owners make improvements or installations to a building subject to the rent stabilization or rent control laws, they may be permitted to increase the rent based on the actual, verified cost of the improvements. This is called a Major Capitol Improvement (MCI).

To qualify as an MCI, the improvement or installation must:

  • Meet depreciation standards of the Internal Revenue Code other than for ordinary repairs;
  • Be for the operation, preservation and maintenance of the building;
  • Directly or indirectly benefit ALL tenants; and, Meet the requirements set forth in the Division of Housing and Community Renewal's (DHCR) useful life schedule.

To be eligible for a rent increase, the MCI must be a new installation and not a repair to old equipment. For example, an owner may receive an MCI increase for a new boiler or a new roof but not for a repaired or rebuilt one. Some procedures qualify as MCI's as well, such as "pointing" and "waterproofing."

When the owner submits an MCI rent increase application to the State Division of Housing and Community Renewal (DHCR fact sheet), DHCR notifies the tenants and gives them an opportunity to submit objections to the application. The DHCR will issue an order either granting an increase in whole or in part or denying the increase. The rent increase is a permanent addition to the legal regulated rent (there may also be temporary rent increases too, see below). No increase may be charged or collected unless and until DHCR issues an order approving the Increase. In addition, an owner cannot collect an MCI increase from a tenant for whom DHCR has determined that "required services" are not being maintained; or from a tenant who has a rent reduction order in place. No MCI rent increase will be approved while a building-wide service reduction order is in effect.

For rent stabilized apartments in NYC, the rent increase collectible in any one year may not exceed 6% of the tenant's rent, as listed on the schedule of monthly rental income filed with the owner's application, for both the permanent prospective increase and the temporary retroactive portion. The temporary retroactive increase covers the time period between the tenant's date of notification and the agency's approval order. Increases above the 6% cap can be spread forward to future years. For all rent controlled apartments and for stabilized apartments outside NYC, the permanent increase collectible in any one year may not exceed 15% of the tenant's rent as of the issue date of the order.

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Is there a limit to MCI increases?

There is no limit on the number of MCIs your landlord can file, so long as the improvements qualify as Major Capital Improvements (MCI's). However, for rent stabilized apartments in New York City the increases may not be added at a rate of more than 6% of the rent per year. Thus, an improvement that warrants an 18% rent increase must be phased in over three years. As a tenant you have the right to object to the landlord's application if you do not think it is legitimate. See the DHCR fact sheet on MCI's for further information.

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How can I find out what the landlord spent on apartment improvements before signing my new lease?

The landlord should have appended the rent stabilization "lease rider" to your lease. The rider should have included the prior rent paid for your apartment and calculations showing how much the rent was increased, and for what reasons. Included in these calculations should be the amount of "1/40th" individual apartment improvements (IAI's). In general, a landlord can raise the rent of an apartment by 1/40th (or 1/60th in buildings with more than 35 apartment units, effective Sept. 24, 2011) of the cost of any improvements (e.g. $6,000 spent on a new kitchen = a $150 rent increase if the owner is entitled to a 1/40th increase OR a $100 rent increase if the owner is entitled to a 1/60th increase). If you did not receive the rider you should request it from your landlord. If s/he does not provide it you can file a complaint with the New York State Division of Housing and Community Renewal, the state agency which administers the rent regulation system (718-739-6400). If you believe that the claimed cost of the improvements is exaggerated and fraudulent, and you have already signed the lease, you may consider filing a rent overcharge claim. In defending the claim, the landlord will have to provide receipts and canceled checks to support the claimed cost. See the DHCR fact sheet on IAI's for more information.

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As a rent stabilized tenant, do I have to pay increases for major capital improvements (MCI's) in perpetuity?

Yes. The DHCR calculates the rent increase based on a 7 year (i.e., 84 months) amortization schedule of the certified allowable costs for the MCI. In other words, the owner can add about 1/84th of the cost of the project to his/her monthly rent roll for the building. This building wide increase is then allocated among the units in the building on a per room basis. Notwithstanding this notion of a seven year amortization, so long at the increase was lawful, it becomes part of the base rent and remains a permanent part of the legal rent. That is, the 1/84th factor is simply used to calculate the adjustment, not to limit its application. See the DHCR fact sheet on MCI's for further information.

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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 2/20/2014


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