N.Y. Multiple Dwelling Law § 286: Tenant protection

§ 286. Tenant protection. 1. It shall not be a ground for an action or

proceeding to recover possession of a unit occupied by a residential

occupant qualified for the protection of this article that the occupancy

of the unit is illegal or in violation of provisions of the tenant's

lease or rental agreement because a residential certificate of occupancy

has not been issued for the building, or because residential occupancy

is not permitted by the lease or rental agreement.

2. (i) Prior to compliance with safety and fire protection standards

of article seven-B of this chapter, residential occupants qualified for

protection pursuant to this article shall be entitled to continued

occupancy, provided that the unit is their primary residence, and shall

pay the same rent, including escalations, specified in their lease or

rental agreement to the extent to which such lease or rental agreement

remains in effect or, in the absence of a lease or rental agreement, the

same rent most recently paid and accepted by the owner; if there is no

lease or other rental agreement in effect, rent adjustments prior to

article seven-B compliance shall be in conformity with guidelines to be

set by the loft board for such residential occupants within six months

from the effective date of this article.

(ii) In addition to any rent adjustment pursuant to paragraph (i) of

this subdivision, on or after June twenty-first, nineteen hundred

ninety-two, the rent for residential units in interim multiple dwellings

that are not yet in compliance with the requirements of subdivision one

of section two hundred eighty-four of this article shall be adjusted as

follows:

(A) Upon the owners' filing of an alteration application, as required

by paragraphs (ii), (iii), (iv), (v), (vi), and (vii) of subdivision one

of section two hundred eighty-four of this article, an adjustment equal

to three percent of the rent in effect at the time the owner files the

alteration application.

(B) Upon obtaining an alteration permit, as required by paragraphs

(ii), (iii), (iv), (v), (vi), and (vii) of subdivision one of section

two hundred eighty-four of this article, an adjustment equal to three

percent of the rent in effect at the time the owner obtains the

alteration permit.

(C) Upon achieving compliance with the standards of safety and fire

protection set forth in article seven-B of this chapter for the

residential portions of the building, an adjustment equal to four

percent of the rent in effect at the time the owner achieves such

compliance.

(D) Owners who filed an alteration application prior to the effective

date of this subparagraph shall be entitled to a prospective adjustment

equal to six percent of the rent on the effective date of this

subparagraph.

(E) Owners who obtained an alteration permit prior to June

twenty-first, nineteen hundred ninety-two shall be entitled to a

prospective adjustment equal to fourteen percent of the rent on June

twenty-first, nineteen hundred ninety-two.

(F) Owners who achieved compliance with the standards of safety and

fire protection set forth in article seven-B of this chapter for the

residential portions of the building prior to June twenty-first,

nineteen hundred ninety-two shall be entitled to a prospective

adjustment equal to twenty percent of the rent on June twenty-first,

nineteen hundred ninety-two.

(iii) Any rent adjustments pursuant to paragraph (ii) of this

subdivision shall not apply to units which were rented at market value

after June twenty-first, nineteen hundred eighty-two and prior to June

twenty-first, nineteen hundred ninety-two. This paragraph shall not

apply to units made subject to this article by subdivision five of

section two hundred eighty-one of this article.

(iv) Payment of any rent adjustments pursuant to paragraph (ii) of

this subdivision shall commence the month immediately following the

month in which the act entitling the owner to the adjustment occurred.

3. Upon or after compliance with the safety and fire protection

standards of article seven-B of this chapter, an owner may apply to the

loft board for an adjustment of rent based upon the cost of such

compliance. Upon approval by the loft board of such compliance, the loft

board shall set the initial legal regulated rent, and each residential

occupant qualified for protection pursuant to this article shall be

offered a residential lease subject to the provisions regarding

evictions and regulation of rent set forth in the emergency tenant

protection act of nineteen seventy-four, except to the extent the

provisions of this article are inconsistent with such act.

4. The initial legal regulated rent established by the loft board

shall be equal to (i) the rent in effect, including escalations, as of

the date of application for adjustment ("base rent"), plus, (ii) the

maximum annual amount of any increase allocable to compliance as

provided herein; and (iii) the percentage increase then applicable to

one, two or three year leases, as elected by the tenant, as established

by the local rent guidelines board, and applied to the base rent,

provided, however, such percentage increases may be adjusted downward by

the loft board if prior increases based on loft board guidelines cover

part of the same time period to be covered by the rent guidelines board

adjustments.

5. An owner may apply to the loft board for rent adjustments once

based upon the cost of compliance with article seven-B of this chapter

and once based upon the obtaining of a residential certificate of

occupancy. If the initial legal regulated rent has been set based only

upon article seven-B compliance, a further adjustment may be obtained

upon the obtaining of a residential certificate of occupancy. Upon

receipt of such records as the loft board shall require, the loft board

shall determine the costs necessarily and reasonably incurred, including

financing, in obtaining compliance with this article pursuant to a

schedule of reasonable costs to be promulgated by it. The adjustment in

maximum rents for compliance with this article shall be determined

either (i) by dividing the amount of the cash cost of such improvements

exclusive of interest and service charges over a ten year period of

amortization, or (ii) by dividing the amount of the cash cost of such

improvements exclusive of interest and service charges over a fifteen

year period of amortization, plus the actual annual mortgage debt

service attributable to interest and service charges in each year of

indebtedness to an institutional lender, or other lender approved by the

loft board, incurred by the owner to pay the cash cost of the

improvements, provided that the maximum amount of interest charged

includable in rent shall reflect an annual amortization factor of

one-fifteenth of the outstanding principal balance. Rental adjustments

to each residential unit shall be determined on a basis approved by the

loft board. An owner may elect that the loft board shall deem the total

cost of compliance with this article to be the amounts certified by the

local department of housing preservation and development of such

municipality in any certificate of eligibility issued in connection with

an application for tax exemption or tax abatement to the extent such

certificate reflects categories of costs approved by the loft board as

reasonable and necessary for such compliance. Rental adjustments

attributable to the cost of compliance with this article shall not

become part of the base rent for purposes of calculating rents adjusted

pursuant to rent guidelines board increases.

6. Notwithstanding any provision of law to the contrary, a residential

tenant qualified for protection pursuant to this chapter may sell any

improvements to the unit made or purchased by him to an incoming tenant

provided, however, that the tenant shall first offer the improvements to

the owner for an amount equal to their fair market value. Upon purchase

of such improvements by the owner, any unit subject to rent regulation

solely by reason of this article and not receiving any benefits of real

estate tax exemption or tax abatement, shall be exempted from the

provisions of this article requiring rent regulation if such building

had fewer than six residential units as of the effective date of the act

which added this article, or rented at market value subject to

subsequent rent regulation if such building had six or more residential

units at such time. The loft board shall establish rules and regulations

regarding such sale of improvements which shall include provisions that

such right to sell improvements may be exercised only once for each unit

subject to this article, and that the opportunity for decontrol or

market rentals shall not be available to an owner found guilty by the

loft board of harassment of tenants.

7. The local rent guidelines board shall annually establish guidelines

for rent adjustments for the category of buildings covered by this

article in accordance with the standards established pursuant to the

emergency tenant protection act of nineteen seventy-four. The local rent

guidelines board shall consider the necessity of a separate category for

such buildings, and a separately determined guideline for rent

adjustments for those units in which heat is not required to be provided

by the owner, and may establish such separate category and guideline.

The loft board shall annually commission a study by an independent

consultant to assist the rent guidelines board in determining the

economics of loft housing.

8. Cooperative and condominium units occupied by owners or

tenant-shareholders shall not be subject to rent regulation pursuant to

this article.

9. No eviction plan for conversion to cooperative or condominium

ownership for a building which is, or a portion of which is an interim

multiple dwelling shall be submitted for filing to the department of law

pursuant to the general business law until a residential certificate of

occupancy is obtained as required by this article, and the residential

occupants qualified for protection pursuant to this article are offered

one, two or three year leases, as elected by such persons, in accordance

with the provisions for establishment of initial legal regulated rent

contained herein. Non-eviction plans for such buildings may be submitted

for filing only if the sponsor remains responsible for compliance with

article seven-B and for all work in common areas required to obtain a

residential certificate of occupancy. Cooperative conversion shall be

fully in accordance with section three hundred fifty-two-eeee of the

general business law, the requirements of the code of the local real

estate industry stabilization association, and with the rules and

regulations promulgated by the attorney general.

10. The functions of the local conciliation and appeals board of such

municipality regarding owners and tenants subject to rent regulation

pursuant to this article shall be carried out by the loft board until

such time as provided otherwise by local law.

11. Residential occupants qualified for protection pursuant to this

article shall be afforded the protections available to residential

tenants pursuant to the real property law and the real property actions

and proceedings law.

12. No waiver of rights pursuant to this article by a residential

occupant qualified for protection pursuant to this article made prior to

the effective date of the act which added this article shall be accorded

any force or effect; however, subsequent to the effective date an owner

and a residential occupant may agree to the purchase by the owner of

such person's rights in a unit.

13. The applicability of the emergency tenant protection act of

nineteen seventy-four to buildings occupied by residential tenants

qualified for protection pursuant to this article shall be subject to a

declaration of emergency by the local legislative body. In the event

such act expires prior to the expiration of this article, tenents in

interim multiple dwellings shall be included in coverage of the rent

stabilization law of nineteen hundred sixty-nine of the city of New

York.