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Status of Rent Controlled Apartments in New York

Posted by Melvin Monachan | Apr 27, 2018 | 0 Comments

Rent control is a program that places limits on the amount of rent that the owner may charge and imposes restrictions on the process of eviction. The program is only applicable to units built prior to 1947 in certain New York localities and is not to be confused with rent-stabilized apartments—a different program.

Rent control was originally implemented in response to a “postwar rental housing emergency.” The number of remaining rent-controlled units continually declines because to maintain this status, tenants must have lived there since 1971, or a successor such as a spouse or a child must continue residing there. When rent-controlled units in New York City are vacated, they are transitioned to either a rent-stabilized residence or removed from such regulations altogether.

Rent Increases

In New York City, a rent-controlled apartment has a base maximum rent that is subject to adjustment every two years based on costs involved in operations according to the Maximum Base Rent (MBR) system. Owners without violations that face cost increases may raise rents by up to 7.5%. Increases may be challenged by tenants questioning whether the increase is justified. In New York City, some of the potential cost increases include fuel, maintenance, and labor costs.

Beyond New York City

Rent control also exists in other counties, including Westchester, Nassau, and Rensselaer counties. Beyond New York City, the New York State Housing & Community Renewal (DHCR) manages these units. Building owners may apply for rent increases periodically. DHCR guidelines explain that rent increases may occur for any of these reasons:

  • There are increased costs for services, equipment, or an improvement is made—written tenant consent is required.
  • A capital improvement is made to the property—DHCR approval is required.
  • Extreme hardship is proven—DHCR approval is required.

Rent Control vs Rent Stabilization

The term “rent regulated” applies to both rent-controlled and rent-stabilized apartments, yet they are different. In New York City, there are approximately 27,000 rent-controlled apartments and 1,030,000 rent-stabilized units. Unlike a rent-controlled apartment, when a landlord makes a significant improvement and wishes to raise the rent, DHCR approval is not necessary. In rent-stabilized units, the Rent Guidelines Board is the authority for management. The rent control program is being phased out.

Building to Be Demolished

If an owner intends to demolish a building subject to rent regulation, the owner must obtain DHCR approval. The owner is not obligated to offer a renewal lease, but tenants may remain in the interim without rent increases. Owners must serve the tenants with notices of termination with adequate notice. The DHCR may order stipends for moving and relocation costs.

Building in Foreclosure

If a residential building subject to rent regulation is being foreclosed on, the building will likely be sold at an auction. During the foreclosure process, the court assigns a representative to collect rental payments and notify tenants. The foreclosure does not change the rent-controlled status of the units, cause tenant eviction, or prevent tenants from filing complaints of rent overcharges.

As the number of rent-controlled apartments dwindles in New York, questions regarding the same increase. Seeking legal counsel to address those questions can help put your mind at ease or direct you to the right path of action to take.

About the Author

Melvin Monachan

Melvin Monachan is the founder of The Law Office of Melvin Monachan, PLLC, a full service, real estate law firm representing individuals, investors and corporate entities in all aspects of real estate law. On the transactional side, Melvin represents purchasers and...

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