Rent Stabilization and Emergency Tenant Protection Act (2024)

1) Is the owner of rent stabilized apartments required to register the rents?

Yes, the owner must register rents of rent stabilized units with DHCR on an annual basis. SeeRent Registration.

2) Who is responsible for paying a 421-a tax benefit - 2.2% surcharge and how is it calculated?

The 2.2% surcharge is collectible primarily from tenants in market rate units in buildings that receive 421-a (subdivision 1-15) tax benefits. It is not collectible from tenants in market rate or income restricted units in buildings that receive 421-a (subdivision 16) tax benefits (Affordable New York Housing Program Benefits).

The 2.2% surcharge isnotpart of the legal rent and cannot be compounded by Rent Guidelines Board increases for one and two-year leases or by any other lawful rent increases including, but not limited to Major Capital Improvement (MCI) or Individual Apartment Improvement (IAI) rent increases. The 2.2% surcharge can only be charged once a year regardless of how many leases have been executed in any given year. The collection of the 2.2% surcharge is also not affected by a DHCR order reducing rent for decreased services.

The 2.2% surcharge is only collectible if the applicable lease includes a rider that is signed by the tenant, notifying the tenant of the owner’s right to collect the 2.2% surcharge and the approximate date of expiration of the 421-a Benefits. If the owner does not include the rider in a tenant’s vacancy (first) lease, DHCR will allow owners to add it to such tenant’s renewal lease and collect the 2.2% surcharge that could have been charged, prospectively only, plus any future lawful annual surcharges. A subsequent tenant who moves into an apartment during the phase-out of such building’s 421-a Benefits, provided that he, she or they receives the rider, can be prospectively charged the surcharge amount that had been or could have been charged to the prior tenant, plus any future lawful annual surcharge increases.

The 2.2% surcharge (a) can be increased annually during the phase-out period of the tax abatement up until the date upon which the 421-a Benefits expire, (b) iscalculatedfor each year as a percentage of the actual rent paid by the tenantas of the initial date of the phase out and (c)cannever exceedcumulatively19.8% of the actualrent paid by the tenant on the date that such phase-out began.

The total surcharge assessed upon the expiration of the 421-a Benefits is a fixed final surcharge that may continue to be charged in each year thereafter. However, no additional 2.2% increases can be added to the final surcharge after the 421-a tax benefits expire. The collection of the final surcharge terminates when the tenant who is in occupancy on the date the 421-a benefits expire vacates the apartment.

3) If a tenant is renting an apartment in a building that is a co-op, is he, she or they rent regulated?

In NYC, a rent regulated tenant that is in occupancy before the conversion to cooperative ownership under a non-eviction plan remains under rent regulation, provided that he or she continues in occupancy as a non-purchasing tenant.

4) The landlord combined two apartments into one and the result is a reduction of the number of units in the building from six to five. Does this deregulate the building and exempt it from rent stabilization?

No. The agency has ruled, and the courts have upheld that the building remains subject to rent stabilization as there were six units on the base date.

5) Do the mistaken filings of rent registrations and rent stabilized leases for a building and its apartments determine that it has rent stabilization status?

No. The agency has ruled, and the courts have upheld that rent stabilization coverage is determined when the statutory criteria is met. Filing erroneous registrations with DHCR or wrongly executing rent stabilized leases does not supersede statute.

6) I have been directed by DHCR to file registrations for prior years that were not complete. How do I register an apartment that became permanently exempt due to a High Rent Vacancy?

As a result of the 2014 Amendments to the Rent Stabilization Code, owners of apartments that became deregulated from rent regulation due to a High Rent Vacancy after January 8, 2014, are legally required to file an annual rent registration form with DHCR indicating the permanently exempt status of the apartment. If the apartment became deregulated from rent regulation prior to January 8, 2014, while it is not legally required, DHCR recommends that owners file an annual registration form with DHCR indicating the permanently exempt status.

7) In addition to registering the legal rent, do you need to register the actual rent paid when the tenant receives rental assistance, for example, Section 8?

Yes. If the Actual Rent Paid is different than the legal rent it must be reported in the registration filing. The Actual Rent Paid to be registered is the SUM of the tenant’s share (out-of-pocket payment) and the Section 8 rental assistance. The Actual Rent Paid may be higher than the Legal Rent, but only if it has been approved in a municipal regulatory agreement citing Section 610 of the PHFL. The higher Actual Rent can only be collected during the time that rental assistance is being received.