Rent Stabilization Code Amendments Approved

On January 8th, 2014, the DHCR officially adopted amendments to the Rent Stabilization Code. The amendments, which are effective immediately, are the same as the proposed version that was released on April 24, 2013.

Below is a brief summary of the most significant amendments that were adopted by the DHCR, as well as a link to a complete summary of all adopted amendments as well as the revised DHCR Fact Sheets and Updated Procedures.


  1. Tenant Protection Unit:
    The TPU is formally designated as a unit of DHCR “to investigate and prosecute violations” of the rent laws.
  2. Individual Apartment Improvements:
    a. Lease riders are required detailing the calculation of rent, including IAI increases.
    b. Owners are required to provide tenants, upon a tenant’s request, with documentation
    to support the IAI increase.
    c. Rent overcharge proceedings can result from the failure to provide the lease rider and/or the IAI documentation.
  3. Major Capital Improvements:
    a. MCI rent increases will not be allowed for conversions from master metering to individual metering (electrical wiring for the building will remain allowable).
    b. MCI applications will be rejected with leave to renew if the building has one or more immediately hazardous violations.
  4. Statute of Limitations:
    The four-year overcharge period will be pierced where there is an allegation of fraud, an outstanding rent reduction order, a willful overcharge, a vacant or exempt unit on the base date, or a preferential rent.
  5. Rent Registrations:
    To amend a rent registration, owners will be required to commence an administrative proceeding, upon notice to the tenant.
  6. Decrease in Services:
    a. A tenant’s complaint will not be dismissed due to the tenant’s failure to first provide notice of the condition to owner.
    b. Service decrease orders will preclude future MCI and vacancy bonus increases.
    c. An owner will have 20 days to respond to a service decrease complaint where the tenant provides prior notice or if the complaint relates to heat or hot water.
  7. First Deregulated Tenant:
    a. Owners are required to provide the first deregulated tenant with an exit notice stating the basis for the deregulation, the rent computation and the last regulated rent.
    b. The owner is required to provide the first deregulated tenant with a copy of the rent registration indicating the deregulated rent.
  8. Preferential Rents:
    Preferential rents are required to be set forth in the lease.
  9. Deemed Leases:
    Tenants who do not execute renewal leases will be treated as month-to-month tenants and will not be subject to an automatic lease renewal based upon a deemed lease.
  10. Default Formula:
    Where the rent on the base date cannot be determined or was the result of fraud, the lowest rent for a comparable unit in the building will be used to establish the legal rent.
  11. Harassment:
    False filings and false statements by an owner which interfere with a tenant’s rights are included within the definition of harassment.

Rent Stabilization Code Amendment Complete Summary

Revised DHCR Fact Sheets and Updated Procedures


J-51 Program and Rent Re-Regulation

According to the lists available on the NYC Department of Finance web site, the following buildings receive or have received J-51 tax abatements: 100 West 86th Street (Regina Estates Inc.), 27 West 96 Street (Regina Metropolitan Co, LLC), 305 Riverside Drive (305 Riverside Corp.), 425 Riverside Drive (Mayflower Development Corp.), 205 West 88 Street (West 88 Street LLC) in Manhattan and 10-06 Neilson Street (Neilson Gardens Inc.) Far Rockaway, 209-30 43 Avenue (ABK Apartments Inc) Bayside, 211-01 42 Avenue (WPH Apts Inc) Bayside, 210-02 42 Avenue (SHR Apartments Inc) Bayside,  and 89-39 221st Place (Braddock Garden Apts) Queens Village in Queens.  These were taken from the Department of Finance published lists.

Any tenant that moved into a building as a “deregulated” tenant might instead actually be rent stabilized, if either (a) the building is now getting J-51 benefits, or (b) the building used to get J-51 benefits during the tenancy of the current tenant, and the tenant did not get notice, in the first lease and in every renewal, saying that the apartment can be deregulated when the benefits expire. In addition, a stabilized tenant might be exempt from high-income deregulation if either (a) the building is now getting J-51 benefits, or (b) the building used to get J-51 benefits during the tenancy of the current tenant and the tenant did not get notice, in the first lease and in every renewal, saying that the apartment can be deregulated when the benefits expire.

Tenants who would be in these categories but who have left their supposedly deregulated apartments are affected too: if they left less than four years ago, they can sue for overcharges.

At a minimum, the legal rent for affected tenants will be based on the rent paid four years ago, and that rent will be considered a stabilized rent, even if it is above $2,000. Tenant attorneys will be arguing that the rent should be set even lower, however, since this situation might fit within an exception to the “four year rule,” the rule that normally sets rents at the amount paid four years ago. The argument is that an exception should be made because the rent four years ago will in some cases clearly be the product of the illegal deregulation of the apartment. To get a rent adjustment, a tenant will have to file an overcharge complaint, bring a lawsuit, or join a lawsuit in progress. Attorney fees and treble damages can also be sought.

Tenants who take no action at all risk having their rent permanently set at a higher amount than they could have gotten and never being able to recover some of their overcharges. They may also be forced to deal with the issue anyway, if the landlord ever tries to evict them as supposedly free-market tenants.

This type of action really necessitates at least a consultation and probably representation by a tenant-centric attorney. It is my understanding that several law firms are currently handling a J-51 Rent Regulation cases.  At least one of them includes tenants from one of the buildings listed above.