N.Y. Emergency Housing Rent Control Law 274/46 337/61 § 4: General powers and duties of the commission

§ 4. General powers and duties of the commission. 1. At the time this

act shall become effective, the commission shall establish maximum rents

which shall be

(a) for housing accommodations outside the city of New York, the

maximum rent which was established on March first, nineteen hundred

fifty, pursuant to the federal act, and shall not include adjustments

granted by orders issued under the federal act after that date,

regardless of whether they were made effective as of, or retroactive to,

that date or a date prior thereto; and

(b) for housing accommodations within the city of New York, the

maximum rent which was established on March first, nineteen hundred

fifty, pursuant to the federal act, and shall not include either, (1)

adjustments granted by orders issued under the federal act after that

date, regardless of whether they were made effective as of, or

retroactive to, that date or a date prior thereto, or (2) adjustments

granted by orders increasing the maximum rent, issued after March first,

nineteen hundred forty-nine, under the federal act, regardless of

whether the order of increase was made effective as of, or retroactive

to, March first, nineteen hundred forty-nine, or a date prior thereto,

but shall include adjustments for new or additional services or

facilities provided by the landlord while the housing accommodations

were not rented or where tenant-occupied, to which the tenant then in

possession had agreed, either expressly or impliedly; and

(c) for housing accommodations within the cities of New York and

Buffalo which on March first, nineteen hundred fifty, had no maximum

rent established pursuant to the federal act, but which were subject to

a maximum rent established pursuant to the local laws of the cities of

New York and Buffalo, the maximum rent which was established on March

first, nineteen hundred fifty, pursuant to such local laws.

2. Whenever the commission determines that such action is necessary to

effectuate the purposes of this act, it may also establish maximum rents

for housing accommodations, as that term is defined herein, in

municipalities in which no maximum rent was in effect on March first,

nineteen hundred fifty. Any housing accommodation for which a maximum

rent is so established shall be deemed a housing accommodation for all

the purposes, and subject to all the provisions of this act.

2-a. For housing accommodations created by a change from a non-housing

to a housing use or by conversion on or after February first, nineteen

hundred forty-seven, including those decontrolled by order, and

certified by a municipal department having jurisdiction to be a fire

hazard or in a continued dangerous condition or detrimental to life or

health, the maximum rent shall be the rent charged on January first,

nineteen hundred fifty-seven, or the date of first rental, whichever is

later. Any housing accommodations for which a maximum rent is so

established shall be deemed a housing accommodation for all the

purposes, and subject to all the provisions of this act, but only so

long as such illegal or hazardous condition continues and further

certification with respect thereto shall not be required notwithstanding

any inconsistent provision of this act.

2-b. Provision shall be made pursuant to regulations prescribed by the

commission for the establishment, adjustment and modification of maximum

rents in rooming houses, which shall include those housing

accommodations subject to control pursuant to the provisions of

paragraph (b) of subdivision two of section two of this act, having

regard for any factors bearing on the equities involved, consistent with

the purposes of this act to correct speculative, abnormal and

unwarranted increases in rent.

3. Whenever the foregoing standard is not susceptible of application

to a housing accommodation to which this act applies, and for which no

maximum rent was established on March first, nineteen hundred fifty, or

where no registration statement had been filed as had been required by

the federal act, the maximum rent thereof shall be fixed by the

commission, having regard to the maximum rents for comparable housing

accommodations or any other factors bearing on the equities involved,

consistent with the purposes of this act.

3-a. Notwithstanding the foregoing provisions of this section, on and

after May first, nineteen hundred fifty-three, the maximum rent for any

housing accommodations shall not be less than the maximum rent in effect

on March first, nineteen hundred forty-three (or if there was no such

maximum rent then in effect, the maximum rent first established pursuant

to the federal act prior to July first, nineteen hundred forty-seven)

plus fifteen per centum thereof as such sum is adjusted to reflect:

(1) the amount of any decreases in maximum rent required by order

because of decreases in dwelling space, services, furniture, furnishings

or equipment, or substantial deterioration or failure to properly

maintain such housing, and

(2) the amount of increases in maximum rent authorized by order

because of increases in dwelling space, services, furniture, furnishings

or equipment and the amount of the temporary increase authorized by

order because of a major capital improvement.

Nothing contained in this subdivision, however, shall have the effect

of increasing the maximum rent of any housing accommodation more than

fifteen per centum above the maximum rent in effect on April thirtieth,

nineteen hundred fifty-three.

4. (a) The commission may from time to time adopt, promulgate, amend

or rescind such rules, regulations and orders as it may deem necessary

or proper to effectuate the purposes of this act, including practices

relating to recovery of possession; provided that such regulations can

be put into effect without general uncertainty, dislocation and hardship

inconsistent with the purposes of this act; and provided further that

such regulations shall be designed to maintain a system of rent controls

at levels which, in the judgment of the commission, are generally fair

and equitable and which will provide for an orderly transition from and

termination of emergency controls without undue dislocations,

inflationary price rises or disruption. Provision shall be made pursuant

to regulations prescribed by the commission, for individual adjustment

of maximum rents where the rental income from a property yields a net

annual return of less than seven and one-half per centum of the

valuation of the property. Such valuation shall be the current assessed

valuation established by a city, town or village, which is in effect at

the time of the filing of the application for an adjustment under this

subparagraph properly adjusted by applying thereto the ratio which such

assessed valuation bears to the full valuation as determined by the

state board of equalization and assessment on the basis of assessment

rolls of cities, towns and villages for the year nineteen hundred

fifty-four and certified for such year by such board pursuant to section

forty-nine-d of the tax law; provided, however, that where at the time

of the filing of the application for an adjustment under this

subparagraph such board has computations for such year indicating a

different ratio for subclasses of residential property in a city, town

or village, the commission shall give due consideration to such

different ratio except ratios in excess of one hundred percent,

provided, further, that where such board has not determined and

certified any ratio pursuant to such section of such law for a city,

town or village for such year, the commission shall apply the ratio

determined or certified by such board pursuant to section twelve hundred

twelve of the real property tax law for the most recent year; except

where there has been a bona fide sale of the property within the period

between March fifteenth, nineteen hundred fifty-seven, and the time of

the filing of the application, as the result of a transaction at arms'

length, on normal financing terms at a readily ascertainable price and

unaffected by special circumstances such as a forced sale, exchange of

property, package deal, wash sale or sale to cooperative; provided,

however, that where there has been more than one such bona fide sale

within a period of two years prior to the date of the filing of such

application the commission shall disregard the most recent of such sales

if a prior sale within such two-year period was adopted as the valuation

of the property in a proceeding under this subparagraph. In determining

whether a sale was on normal financing terms, the commission shall give

due consideration to the following factors:

(i) The ratio of the cash payment received by the seller to (a) the

sales price of the property and (b) the annual gross income from the

property;

(ii) The total amount of the outstanding mortgages which are liens

against the property (including purchase money mortgages) as compared

with the equalized assessed valuation of the property;

(iii) The ratio of the sales price to the annual gross income of the

property, with consideration given to the total amount of rent

adjustments previously granted, exclusive of rent adjustments because of

changes in dwelling space, services, furniture, furnishings or

equipment, major capital improvements, or substantial rehabilitation;

(iv) The presence of deferred amortization in purchase money

mortgages, or the assignment of such mortgages at a discount;

(v) Any other facts and circumstances surrounding such sale which, in

the judgment of the commission, may have a bearing upon the question of

financing.

No application for adjustment of maximum rent based upon a sales price

valuation shall be filed by the landlord under this subparagraph prior

to six months from the date of such sale of the property. In addition,

no adjustment ordered by the commission based upon such sales price

valuation shall be effective prior to one year from the date of such

sale. Where, however, the assessed valuation of the land exceeds four

times the assessed valuation of the buildings thereon, the commission

may determine a valuation of the property equal to five times the

equalized assessed valuation of the buildings, for the purposes of this

subparagraph. The commission may make a determination that the valuation

of the property is an amount different from such equalized assessed

valuation where there is a request for a reduction in such assessed

valuation currently pending; or where there has been a reduction in the

assessed valuation for the year next preceding the effective date of the

current assessed valuation in effect at the time of the filing of the

application. Net annual return shall be the amount by which the earned

income exceeds the operating expenses of the property, excluding

mortgage interest and amortization, and excluding allowances for

obsolescence and reserves, but including an allowance for depreciation

of two per centum of the value of the buildings exclusive of the land,

or the amount shown for depreciation of the buildings in the latest

required federal income tax return, whichever is lower; provided,

however, that (1) no allowance for depreciation of the buildings shall

be included where the buildings have been fully depreciated for federal

income tax purposes or on the books of the owner; or (2) the landlord

who owns no more than four rental units within the state has not been

fully compensated by increases in rental income sufficient to offset

unavoidable increases in property taxes, fuel, utilities, insurance and

repairs and maintenance, excluding mortgage interest and amortization,

and excluding allowances for depreciation, obsolescence and reserves,

which have occurred since the federal date determining the maximum rent

or the date the property was acquired by the present owner, whichever is

later; or (3) the landlord operates a hotel or rooming house or owns a

cooperative apartment and has not been fully compensated by increases in

rental income from the controlled housing accommodations sufficient to

offset unavoidable increases in property taxes and other costs as are

allocable to such controlled housing accommodations, including costs of

operation of such hotel or rooming house, but excluding mortgage

interest and amortization, and excluding allowances for depreciation,

obsolescence and reserves, which have occurred since the federal date

determining the maximum rent or the date the landlord commenced the

operation of the property, whichever is later; or (4) the landlord and

tenant voluntarily enter into a valid written lease in good faith with

respect to any housing accommodation, which lease provides for an

increase in the maximum rent not in excess of fifteen per centum and for

a term of not less than two years, except that where such lease provides

for an increase in excess of fifteen per centum, the increase shall be

automatically reduced to fifteen per centum; or (5) the landlord and

tenant by mutual voluntary written informed agreement agree to a

substantial increase or decrease in dwelling space, furniture,

furnishings or equipment provided in the housing accommodations;

provided that an owner shall be entitled to a rent increase where there

has been a substantial modification or increase of dwelling space, or

installation of new equipment or improvements or new furniture or

furnishings provided in or to a tenant's housing accommodation. The

increase in the maximum rent for the affected housing accommodation

shall be one-one hundred sixty-eighth, in the case of a building with

thirty-five or fewer housing accommodations, or one-one hundred

eightieth, in the case of a building with more than thirty-five housing

accommodations where such increase takes effect on or after the

effective date of the chapter of the laws of two thousand nineteen that

amended this subparagraph, of the total actual cost incurred by the

landlord up to thirty thousand dollars in providing such reasonable and

verifiable modification or increase in dwelling space, furniture,

furnishings, or equipment, including the cost of installation but

excluding finance charges and any costs that exceed reasonable costs

established by rules and regulations promulgated by the division of

housing and community renewal. Such rules and regulations shall include:

(i) requirements for work to be done by licensed contractors and a

prohibition on common ownership between the landlord and the contractor

or vendor; and (ii) a requirement that the owner resolve within the

dwelling space all outstanding hazardous or immediately hazardous

violations of the uniform fire prevention and building code (Uniform

Code), New York city fire code, or New York city building and housing

maintenance codes, if applicable. Provided further that an owner who is

entitled to a rent increase pursuant to this clause shall not be

entitled to a further rent increase based upon the installation of

similar equipment, or new furniture or furnishings within the useful

life of such new equipment, or new furniture or furnishings. Provided

further that the recoverable costs incurred by the landlord, pursuant to

this subparagraph, shall be limited to an aggregate cost of thirty

thousand dollars in a fifteen year period beginning with the first

individual apartment improvement on or after June fourteenth, two

thousand nineteen. The owner shall give written notice to the commission

of any such adjustment pursuant to this clause; or (6) there has been,

since March first, nineteen hundred fifty, an increase in the rental

value of the housing accommodations as a result of a substantial

rehabilitation of the building or housing accommodation therein which

materially adds to the value of the property or appreciably prolongs its

life, excluding ordinary repairs, maintenance and replacements; or (7)

there has been since March first, nineteen hundred fifty, a major

capital improvement essential for the preservation, energy efficiency,

functionality, or infrastructure of the entire building, improvement of

the structure including heating, windows, plumbing and roofing, but

shall not be for operational costs or unnecessary cosmetic improvements;

which for any order of the commissioner issued after the effective date

of the chapter of the laws of two thousand nineteen that amended this

paragraph the cost of such improvement shall be amortized over a

twelve-year period for buildings with thirty-five or fewer units or a

twelve and one-half year period for buildings with more than thirty-five

units, and shall be removed from the legal regulated rent thirty years

from the date the increase became effective inclusive of any increases

granted by the applicable rent guidelines board. Temporary major capital

improvement increases shall be collectible prospectively on the first

day of the first month beginning sixty days from the date of mailing

notice of approval to the tenant. Such notice shall disclose the total

monthly increase in rent and the first month in which the tenant would

be required to pay the temporary increase. An approval for a temporary

major capital improvement increase shall not include retroactive

payments. The collection of any increase shall not exceed two percent in

any year from the effective date of the order granting the increase over

the rent set forth in the schedule of gross rents, with collectability

of any dollar excess above said sum to be spread forward in similar

increments and added to the rent as established or set in future years.

Upon vacancy, the landlord may add any remaining balance of the

temporary major capital improvement increase to the legal regulated

rent. Notwithstanding any other provision of the law, for any renewal

lease commencing on or after June 14, 2019, the collection of any rent

increases due to any major capital improvements approved on or after

June 16, 2012 and before June 16, 2019 shall not exceed two percent in

any year for any tenant in occupancy on the date the major capital

improvement was approved; provided, however, where an application for a

temporary major capital improvement increase has been filed, a tenant

shall have sixty days from the date of mailing of a notice of a

proceeding in which to answer or reply. The state division of housing

and community renewal shall provide any responding tenant with the

reasons for the division's approval or denial of such application; or

(8) there has been since March first, nineteen hundred fifty, in

structures containing more than four housing accommodations, other

improvements made with the express informed consent of the tenants in

occupancy of at least seventy-five per centum of the housing

accommodations, provided, however, that no adjustment granted hereunder

shall exceed two per centum unless the tenants have agreed to a higher

percentage of increase, as herein provided; (9) there has been, since

March first, nineteen hundred fifty, a subletting without written

consent from the landlord or an increase in the number of adult

occupants who are not members of the immediate family of the tenant, and

the landlord has not been compensated therefor by adjustment of the

maximum rent by lease or order of the commission or pursuant to the

federal act; or (10) the presence of unique or peculiar circumstances

materially affecting the maximum rent has resulted in a maximum rent

which is substantially lower than the rents generally prevailing in the

same area for substantially similar housing accommodations.

In addition to the filing of written statements setting forth the

final rate of equalization concerning assessment rolls of cities, towns

and villages, after determination thereof by the state board of

equalization and assessment, with the appropriate officials as now

required by law, such board shall also file a copy of each such

statement, duly certified, in so far as they relate to cities, towns and

villages subject to rent control pursuant to this act, with the state

rent administrator and the chairman of the temporary state commission to

study rents and rental conditions. Where such board has made

computations indicating a different ratio for subclasses of residential

property, such information shall also be filed with such rent

administrator and the chairman of such temporary state commission.

(b) The total of all adjustments ordered by the commission pursuant to

(1) and (3) of paragraph (a) of subdivision four hereof for any

individual housing accommodations shall not exceed fifteen per centum

for any twelve month period; provided, however, that in ordering an

adjustment pursuant to (1), the commission may waive this limitation

where a greater increase is necessary to make the earned income of the

property equal to its operating expense; provided further, however, that

the maximum rents subject to the allocation requirement of paragraph (c)

hereof shall be increased by such further additional amount during each

succeeding twelve-month period, not exceeding fifteen per centum of the

maximum rent in effect on the effective date of the original order of

adjustment, until the maximum rents for the property shall reflect the

net annual return provided for pursuant to (1) hereof, but in no event,

however, shall the total increase ordered for a succeeding twelve-month

period be more than an additional three per centum of the maximum rent

in effect on the effective date of the original order of adjustment

unless a new application be filed by the landlord.

The commission shall compile and make available for public inspection

at reasonable hours at its principal office and at each appropriate

local office, and shall file with the chairman of the temporary state

commission to study rents and rental conditions the manual of accounting

procedures and advisory bulletins applicable to applications under (1),

(2) and (3) hereof, and all amendments thereto.

(c) Any increase in maximum rent shall be apportioned equitably among

all the controlled housing accommodations in the property. In making

such apportionment and in fixing the increases in maximum rents the

commission shall give due consideration (1) to all previous adjustments

or increases in maximum rents by lease or otherwise; and (2) to all

other income derived from the property, including income from space and

accommodations not controlled, or the rental value thereof if vacant or

occupied rent-free, so that there is allocated to the controlled housing

accommodations therein only that portion of the amount of increase

necessary pursuant to (1), (2) or (3) of paragraph (a) of subdivision

four hereof, as is properly attributable to such controlled

accommodations.

(d) No landlord shall be entitled to any increase in the maximum rent

unless he certifies that he is maintaining all essential services

furnished or required to be furnished as of the date of the issuance of

the order adjusting the maximum rent and that he will continue to

maintain such services so long as the increase in such maximum rent

continues in effect; nor shall any landlord be entitled to any increase

in the maximum rent in any case where a municipal department having

jurisdiction certifies that the housing accommodation is a fire hazard

or is in a continued dangerous condition or detrimental to life or

health, or is occupied in violation of law.

(e) Before ordering any adjustment in maximum rents, a reasonable

opportunity to be heard thereon shall be accorded the tenant and the

landlord.

(f) An owner, lessor or agent thereof shall be prohibited from

assessing a lessee any fee, surcharge or other charges for legal

services in connection with the operation or rental of a residential

unit unless the owner, lessor or agent has the legal authority to do so

pursuant to a court order. Legal services include, but are not limited

to, court fees, legal representation, attorney fees, notary public

charges, and administrative fees incurred by the owner, lessor or agent

in connection with management of the building, including actions and

proceedings in a court of law. Any agreement or assessment to the

contrary shall be void as contrary to public policy.

(g) No owner of a housing accommodation subject to the provisions of

this law shall impose any surcharge for the installation and use of a

tenant-installed air conditioner unit where the tenant pays for electric

utility service.

5. (a) Whenever in the judgment of the commission such action is

necessary or proper in order to effectuate the purposes of this act, the

commission may, by regulation or order, regulate or prohibit speculative

or manipulative practices or renting or leasing practices, including

practices relating to recovery of possession, which in the judgment of

the commission are equivalent to or are likely to result in rent

increases inconsistent with the purposes of this act.

(b) Whenever in the judgment of the commission such action is

necessary or proper in order to effectuate the purposes of this act, the

commission may provide regulations to assure the maintenance of the same

living space, essential services, furniture, furnishings and equipment

as were provided on the date determining the maximum rent, and the

commission shall have power by regulation or order to decrease the

maximum rent for any housing accommodation with respect to which a

maximum rent is in effect, pursuant to this act if it shall find that

the living space, essential services, furniture, furnishings or

equipment to which the tenant was entitled on such date has been

decreased. The amount of the decrease in maximum rent ordered by the

commission under this paragraph shall be reduced by any credit,

abatement or offset in rent which the tenant has received pursuant to

section two hundred thirty-five-b of the real property law, that relates

to one or more conditions covered by such order.

(c) Whenever any municipal department having jurisdiction certifies

that any housing accommodation is a fire hazard or is in a continued

dangerous condition or detrimental to life or health, or is occupied in

violation of law, the commission may issue an order decreasing the

maximum rent of such housing accommodation in such amount as it deems

necessary or proper, until the said municipal department has certified

that the illegal or hazardous condition has been removed.

6. Any regulation or order issued pursuant to this section may be

established in such form and manner, may contain such classifications

and differentiations, and may provide for such adjustments and

reasonable exceptions as in the judgment of the commission are necessary

or proper in order to effectuate the purposes of this act. No increase

or decrease in maximum rent shall be effective prior to the date on

which the order therefor is issued.

7. Regulations, orders, and requirements under this act may contain

such provisions as the commission deems necessary to prevent the

circumvention or evasion thereof.

8. The powers granted in this section shall not be used or made to

operate to compel changes in established rental practices, except where

such action is affirmatively found by the commission to be necessary to

prevent circumvention or evasion of any regulation, order, or

requirements under this act.

9. No annual rent increase authorized pursuant to this act shall

exceed the average of the previous five annual rental adjustments

authorized by a rent guidelines board for a rent stabilized unit

pursuant to section 4 of the emergency tenant protection act of nineteen

seventy-four.