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How has New York’s Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation?

How has New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation?

 

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Expiration Provisions.

Prior to2019 HSTPA Rent Regulation expired every 4 to 8 years to allow state legislature to determine whether a housing emergency (vacancy 5% or less) continued to exist.

Now, the 2019 HSTPA changed Rent Regulation Expiration Provisions by eliminating Rent-control and rent-stabilization sunset provisions effective June 14, 2019.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA)changed Rent Regulation Luxury Deregulation (NYC Admin. Code Section 26-504.2 & 26-504.3).

Prior to 2019 HSTPA High-Rent Vacancy Deregulation permitted deregulation of a regulated apartment vacated with a legal rent at or above a certain threshold, most recently $2,774.76. Once deregulated, market rent could be charged.  High Income-High Rent Deregulation permitted high-income deregulation by DHCR order if the apartment was occupied by persons having a total income in excess of $200,00 for two preceding years and the rent was $2,774.76 or higher.

Now, the 2019 HSTPA changed Rent Regulation Luxury Deregulation by abolishing both high-rent and high-income & high-rent.  A clean-up bill clarifies that any unit lawfully deregulated before June 14, 2019 shall remain deregulated; also provides that 421-a buildings remain deregulated and ensures that all units regulated before June 14, 2019  will remain regulated effective June 14, 2019.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Rent Increases for Building Improvements for Individual Apartment Improvements (IAIs) and Major Capital Improvements (MCIs) (NYC Admin. Code Sections 26-511(13) & 26-511.1, 26-511(6), 24-405.1).

Prior to 2019 HSTPA Individual Apartment Improvements (IAIs) permanent monthly rent increases were equal to 1/40th pf the cost of apartment improvement in buildings with 35 or fewer apartments and 1/60th in buildings with 36 or more apartments; DHCR approval was not necessary; tenant consent was required only if the apartment was occupied.

Now, the 2019 HSTPA changed Rent Regulation Rent Increases for Individual Apartment Improvements with the increase Revised 1/168th in buildings with equal to or more than 35 units and 1/180th in buildings with less than 35 units.  IAIs are now temporary and will be removed thirty (30) years from date increase became effective.  DHCR must notify owners and occupants that and IAI increase will expire.  Only 3 IAIs over fifteen (15) years permitted, for total aggregate cost of $15,000.  The most a landlord may increase the rent with IAIs is $89 for buildings with fewer than 35 units and $83 for buildings with more than 35 units.  DHCR to promulgate guidelines and create a centralized IAI documentation electronic database. For IAIs in occupied units, tenant must be given informed consent on a DHCR form.  The form must be in one of the six primary languages (other than English), as determined by the U.S. Census Bureau. To charge for IAIs, landlord must remove from apartment all hazardous (“B”) or immediately hazardous (“C”) violations.  A clean-up bill clarifies that 15-year period and $15,000 cap on 3 IAIs start with first IAI after June 14, 2019.  Costs must be “reasonable and verifiable modification or increase in dwelling space, furniture, furnishing or equipment.”  Increase in rent is aggregate over 15 years. Work performed by an independent contractor who is licensed; no relationship with landlord. Photographs to be taken before and after work is done; photos/records must be kept permanently.  Effective June 14, 2019.

Prior to 2019 HSTPA Major Capital Improvements (MCIs) permanent rent increases based on actual cost of building improvements, apportioned among building's tenants on a per-room basis and amortized over eight (8) years for buildings with thirty fie (35) or fewer apartments and 9 years for thirty six (36) or more apartments; annual rent increases were capped at 6% in NYC and 15% in the rest of the state; owners had to apply for DHCR approval; there was a temporary retroactive component for application processing time.

Now, the 2019 HSTPA changed Rent Regulation Rent Increases for Major Capital Improvements (MCIs) with an annual cap decreased from 6% to 2%.  Amortization period extended to 12 years if equal to or more than thirty-five (35) units and to 12 ½ years if more than thirty-five (35) units.  The retroactive component for MCIs approved between June 16, 2012 to June 16, 2019 may not exceed 2% cap starting September 1, 2019 for any tenant in occupancy on the date of the MCI order.  MCI increase now temporary and will be removed thirty (30) years after effective date.  DHCR required to set a schedule of “reasonable costs”.  DHCR must send notice to landlord and all tenants sixty (60) days before end of temporary MCI.  Notice shall include the initial approved improvement increase and the total amount to be removed.  MCIs are work essential for preservation, energy efficiency, functionality, or infrastructure of the entire building.  Amount of MCI must be reduced by the amount of any government grant given to help pay for improvements and by any insurance payments that compensate for improvement costs.  Collection of MCI starts on the first day of the month at least sixty (60) days after notice to tenant of the increase.  MCIs not permitted in buildings with 35% or fewer regulated units.  Application requires additional and more detailed documentation; DHCR to audit 25% of MCIs.  No MCI if there are outstanding hazardous or immediately hazardous violations.  Eliminates retroactive portion of MCI Independent contractors must perform work.  Effective June 14, 2019.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Rent Increases During Vacancies (NYC Admin. Code Section 26-510(j).

The 2019 HSTPA repealed vacancy increases.  Longevity increases were repealed. The NYC Rent Guidelines board may not adopt vacancy or rent adjustment with legislature's approval.  The Rent Guidelines Board may not establish rent adjustment or allow any increase that does not apply to all regulated apartments equally. All rent increases are the same regardless whether for a renewal or vacancy lease. Effective June 14, 2019. 

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Rent Stabilization Coverage.

Prior to 2019 HSTPA, rent stabilization was in effect in NYC; parts of Nassau, Rockland and Westchester Counties; and Buffalo and other upstate cities.

Now, the 2019 HSTPA has made rent stabilization available statewide to any municipality with less than 5% vacancy and a population of less than a million where local legislature determines that a housing emergency exists. Same criteria as NYC. DHCR to reconstitute an RGB outside NYC. Effective June 14, 2019.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Rent Overcharge Claims, Treble Damages, Records Requirements and Choice of Forum (NYC Admin. Code Section 26-516(a), CPLR 213-a).

Prior to 2019 HSTPA overcharge claims were limited to 4-year period before filing of claim; subject to exceptions like fraud; determination of legal rent limited to 4-year lookback period; landlord required to maintain rent records for 4 tears; treble damages imposable for 2-year period before filing of claim if overcharge was willful, but not based solely on failure to file rent registrations; and safe-harbor exception, which allowed the landlord to refund ant overcharge, plus interest, and reduce the rent before time to answer complaint expired. Permitted late registrations to avoid overcharge liability.

Now, the 2019 HSTPA has extended rent overcharge claims to a 6-year statute of limitations., but CPLR amended to permit to permit filing of claim at any time; applicable to any proceeding application pending as of June 14, 2019. Overcharge penalties limited to 6 years preceding the complaint. No limitation on lookback period to determine legal rent; all available rent history may be examined in “reasonably necessary”; unexplained rental increases can make registrations “unreliable”; base rent is last “reliable” registration file 6 years or more prior to complaint; certain common law exceptions to the statute of limitations set by the Rent Stabilization Code written into law.  Treble-damages period extended to 6-years; no longer defense that overcharge was based on untimely registration.  No safe harbor; treble damages may be imposed even if owner refunds overcharge. Attorney fees ad costs must be imposed if landlord is found to have overcharged a tenant (discretionary under prior law).  Record-keeping obligation extended to 6-years, but no limitations on look-back period to determine legal rent.  Evidence of improvements should not be discarded; new law mentions useful life provisions, which can be as many as twenty-five (25) years.  Failure to maintain records permits DHCR or court to consider evidence of overcharge beyond six years.  Although DHCR and the courts shared concurrent jurisdiction under the prior law, the new law gives the tenant choice of forum.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Preferential Rents (NYC Admin. Code Section 26-511(14).

Prior to 2019 HSTPA landlords could charge a “preferential” rent that was less than the legal rent; landlords could rescind preferential rent during renewal unless lease provided otherwise.

Now, with the passage of 2019 HSTPA owners may charge only the preferential rent, subject to applicable RGB rates and any other applicable rent increases; when the tenant vacates, the preferential rent can be rescinded if warranty of hability issues did not cause the vacancy.  Subject to limited exception for buildings subject to a regulatory agreement (i.e., federal housing projects).  Effective June 14, 2019, bit it applies to any tenant subject to a lease on or after the effective date or that is entitled to receive a renewal or vacancy lease on or after that date.  Effective June 14, 2019.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Recovery of Regulated Apartments for Owner's Use (NYC Admin. Code Sections 26-511(b), and 26-408(1).

Prior to 2019 HSTPA rent-regulated apartment(s) could be recovered if the owner or owner's immediate family intended in good-faith to occupy apartment(s) as their primary residence.

The 2019 HSTPA limits Rent Regulation Recovery of Regulated Apartments for Owner's Use to only one apartment.  Landlord must have “immediate and compelling necessity” to recover apartment.  Owner or immediate family must occupy apartment for 3 years after recovery.  New cause of action is created for damages and declaratory and injunctive relief based on owner's fraudulent statement regarding proposed use of apartment; clean-up bill clarifies that his exists only when tenant was required to surrender the premises under owner's own-use provision.  Unless owner can provide an equivalent or superior housing accommodation at same or lower stabilized rent in an area closely proximate to subject unit, owner is precluded from recovering a unit when any member of the household lawfully occupying unit has 15 or more years' (previously 20 years) tenancy; is 62 years old or older; or has a permanent anatomical, physiological, psychological condition that prevents “substantial gainful employment,”  Effective June 14, 2019.  Applies to any tenant in occupancy  on this date.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Non-Profit Exemption from Rent Stabilization.

Prior to 2019 HSTPA non-profits operated for charitable or educational purposes exempt form rent stabilization.

Now the 2019 HSTPA changed Rent Regulation Non-Profit Exemption from Rent Stabilization.  Non-profits operating programs for those who are or were homeless or at risk of homelessness no longer exempt for rent stabilization.  Existing occupants are deemed tenants, and the legal rent is set at the next renewal to the legal rent of the prior tenant, plus applicable RGB increases.  Clean-up bill excludes from the exemption premises owned or operated by a hospital or other charitable organization operated on an exclusive not-for-profit basis.  Effective June 14, 2019.

New York's Housing Stability and Tenant Protection Act of 2019 (HSTPA) changed Rent Regulation Rent Increases for Rent Controlled Tenants (NYC Admin. Code Sections 26-405(a)(5) and 26-407.1).

Prior to 2019 HSTPA maximum collectible rent for rent-controlled tenants could not be increased by more than 7.5% per year; separate fuel cost adjustments were available based on changes in heating fuel cost.

Now, the 2019 HSTPA changed Rent Regulation annual rent increases for rent controlled tenants are lesser of 7.5% and average of the last 5 years of RGB 1-year renewal leases.  Fuel cost pass-along eliminated.  Effective June 14, 2019

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