§ 26-405 General powers and duties of the city rent agency.
a. (1) At the time this chapter shall become effective, the city rent agency shall establish maximum rents which, subject to the provisions of subdivision b of this section, shall be the maximum rents in effect on April thirtieth, nineteen hundred sixty-two pursuant to the state rent act and the regulations thereunder.
(2) (a) Notwithstanding the foregoing provision of this subdivision, and except as provided in subparagraph (b) of this paragraph two, effective August first, nineteen hundred seventy, the maximum rent in effect on July thirty-first, nineteen hundred seventy shall be adjusted as follows:
(i) For any individual housing accommodation for which one or more but less than two full fifteen per centum rent increases has been granted since May first, nineteen hundred fifty-three pursuant to former subparagraph (d) of paragraph one of subdivision g of this section the maximum rent shall be increased by eight per centum.
(ii) For any individual housing accommodation for which no full fifteen per centum rent increase has been granted since May first, nineteen hundred fifty-three pursuant to former subparagraph (d) of paragraph one of subdivision g of this section the maximum rent shall be increased by fifteen per centum, except that if there was no such increase for any individual housing accommodation for which a first rent was established pursuant to former subdivision m of this section after July thirty-first, nineteen hundred sixty-five and before August first, nineteen hundred sixty-eight, the maximum rent shall be increased by five per centum, and except that if there was no such increase for any individual housing accommodation for which a first rent was established pursuant to such subdivision on or after August first, nineteen hundred sixty-eight there shall be no increase in maximum rent. On or after August first, nineteen hundred seventy, a landlord may file application for labor cost rent adjustment pursuant to subparagraph (l) of paragraph (1) of subdivision g of this section. In lieu of such labor cost rent adjustment, the landlord of a building with twenty or fewer housing accommodations shall have the option of filing for a five per centum increase in maximum rent for any individual housing accommodation for which two or more full fifteen per centum increases have been granted since May first, nineteen hundred fifty-three pursuant to former subparagraph (d) of paragraph one of subdivision g of this section. Nothing contained in this subparagraph (a) however, shall have the effect of establishing the maximum rent in an amount less than the maximum rent in effect on July thirty-first, nineteen hundred seventy nor of increasing by more than fifteen per centum the maximum rent for any housing accommodation.
(b) Where the maximum rent in effect on July thirty-first, nineteen hundred seventy for any individual housing accommodation is less than sixty dollars per month such rent shall be increased effective August first, nineteen hundred seventy by ten dollars per month where the housing accommodation is comprised of three rooms or less and by fifteen dollars per month where the housing accommodation is comprised of more than three rooms.
(c) Where a lease is in effect for any housing accommodation on August first, nineteen hundred seventy, no adjustment of maximum rent for such accommodation shall become effective until the expiration of such lease. Where a housing accommodation becomes vacant on or after August first, nineteen hundred seventy and before January first, nineteen hundred seventy-two by voluntary surrender of possession by the tenant the maximum rent shall be increased by no more than fifteen per centum over the maximum rent established for such accommodation at the time the vacancy occurred, provided that a report is filed with the city rent agency as prescribed by its regulations. If the city rent agency shall make a finding of harassment in violation of subdivision d of section 26-412 of this chapter for the purpose of obtaining such a vacancy, in addition to all other civil or criminal penalties, injunctive relief and enforcement remedies authorized by section 26-413 of this chapter, no housing accommodation in the building shall thereafter be entitled to the benefit of a rental increase as a result of becoming vacant between the aforesaid dates.
(d) The total of (i) the increase pursuant to subparagraph (a) of this paragraph, or (ii) any increases granted between December thirty-first, nineteen hundred sixty-nine and December thirty-first, nineteen hundred seventy-one pursuant to subparagraph (a), (b), or (c) of paragraph one of subdivision g of this section and (iii) any increase granted on or after the effective date of this paragraph pursuant to subparagraph (l) of paragraph one of subdivision g of this section shall not exceed fifteen per centum of the "1970 base rent". For purposes of this subparagraph, the "1970 base rent" is the maximum rent on July thirty-first, nineteen hundred seventy minus the amount of any increase granted between December thirty-first, nineteen hundred sixty-nine and July thirty-first, nineteen hundred seventy pursuant to subparagraph (a), (b), or (c) of paragraph one of subdivision g of this section. This subparagraph shall not operate to decrease any maximum rent existing on its effective date.
(e) The rent increases provided for in this paragraph two shall be collectible upon the landlord's filing a report with the city rent agency on forms to be prescribed by such agency, including simplified forms for landlords of buildings with twelve or fewer housing accommodations, and giving such notice to the tenant as such agency may prescribe, subject to adjustment upon order of the city rent agency. The report shall contain a certified statement by the landlord that there is no legally habitable rent controlled housing accommodation in the building which has not been rented for a period of six months or more on the date of the filing of such report, or that if there is such a housing accommodation, the reasons it has not been rented is that it is being altered pursuant to a permit issued by the department of buildings no later than three months after the vacancy commenced and that the alteration is of such a nature that the accommodation must be kept vacant while it is being made or for such other cause found by the city rent agency not to be inconsistent with the purpose of this chapter, provided further that in the case of an alteration it is commenced within sixty days from the issuance of said permit. A copy of the permit and the application therefor shall accompany the report. No report shall be accepted for filing and no rent increase provided for in this paragraph two shall be collected in the absence of any such certified statement by the landlord. Any excess shall be credited to the tenants in full commencing with the rental payment following the receipt by the landlord of such order of adjustment. If such report is filed on or before October thirty-first, nineteen hundred seventy, the increase shall take effect August first, nineteen hundred seventy. If the report is filed thereafter, such increase shall take effect with the first rental payment following filing.
(f) The rent increases provided for in this paragraph two shall not be collected for the period between March thirty-first, nineteen hundred and seventy-one and December thirty-first, nineteen hundred seventy-one until the landlord shall have filed with the city rent agency a certified statement attesting that for every month for which he or she has received a rent increase pursuant to subparagraphs (a) and (b) of this paragraph two, he or she has expended or incurred in the operation, maintenance and improvements of the housing accommodations from which increases were collected an amount which equals the amount expended per month for such purpose averaged over the preceding five years, or such lesser period that he or she has been landlord of such properties, plus ninety per centum of all increased rents so collected.
(3) The city rent agency shall establish maximum rents to be effective January first, nineteen hundred seventy-two by dividing the maximum gross building rental from all housing accommodations in the property whether or not subject to or exempt from control under this chapter by the number of such accommodations, after giving consideration to such factors as may be prescribed by formula, such as size and location of housing accommodations and number of rooms. Such maximum gross building rental shall be computed on the basis of real estate taxes, water rates and sewer charges and an operation and maintenance expense allowance, a vacancy allowance not in excess of two per cent, and a collection loss allowance, both as prescribed by such agency, and an eight and one-half per centum return on capital value. The operating and maintenance expense allowance shall include provision for the cost of fuel, utilities, payroll, maintenance repairs, replacement reserves and miscellaneous charges attributed to the property, excluding mortgage interest and amortization, and may be varied by the agency for different types of properties depending upon such factors as the year of construction, elevator or non-elevator buildings, and the average number of rooms per individual housing accommodations in the building. Capital value shall be equalized assessed valuation based upon the appropriate tax class ratio which is established pursuant to article twelve of the real property tax law. Where the property receives income from sources other than such housing accommodations, the taxes, water and sewer charges and the capital value attributed to the portion consisting of housing accommodations shall be in the same ratio of the total taxes, water and sewer charges (where not computed separately) and the total capital value as the gross income from such portion consisting of housing accommodations bears to the total gross income from the property, as prescribed by the agency. The agency shall report to the council on or before October fifteenth, nineteen hundred seventy-one as to the status of preparation of the formulas necessary to implement the rent adjustments to be effective January first, nineteen hundred seventy-two.
(4) The city rent agency shall establish maximum rents effective January first, nineteen hundred seventy-four and biennially thereafter by adjusting the existing maximum rent to reflect changes, if any, in the factors which determine maximum gross building rental under paragraph three of this subdivision except that commencing January first, nineteen hundred eighty-two, said maximum rent shall no longer recognize or reflect the adjustment allocable to changes in heating costs after April ninth, nineteen hundred seventy-nine. Notwithstanding any other provisions in this paragraph to the contrary, commencing January first, nineteen hundred seventy-four, the city rent agency shall require each owner to make available for examination his or her books and all other financial records relating to the operation of each building under his or her ownership containing accommodations subject to this chapter at least once every three years for the purpose of determining whether the maximum formula rent is appropriate for each building in light of actual expenditures therefor and shall also alter such formula rent to take into account significant variations between the formula and actual cost experience. The agency shall also establish maximum costs for the factors under paragraph three of this subdivision which determine maximum gross building rental to preclude increases which would otherwise results from excessive expenditures in the operation and maintenance of the building. The return allowed on capital may be revised from time to time by local law.
(5) Where a maximum rent established pursuant to this chapter on or after January first, nineteen hundred seventy-two, is higher than the previously existing maximum rent, the landlord may not collect an increase from a tenant in occupancy in any one year period of more than the lesser of either seven and one-half percentum or an average of the previous five years of one-year rent adjustments on rent stabilized apartments as established by the rent guidelines board, pursuant to subdivision b of section 26-510 of this title. If the period for which the rent is established exceeds one year, regardless of how the collection thereof is averaged over such period, the rent the landlord shall be entitled to receive during the first twelve months shall not be increased by more than the lesser of either seven and one-half percentum or an average of the previous five years of one-year rent adjustments on rent stabilized apartments as established by the rent guidelines board, pursuant to subdivision b of section 26-510 of this title, over the previous rent. Any additional annual rents shall not exceed the lesser of either seven and one-half percentum or an average of the previous five years of one-year rent adjustments on rent stabilized apartments as established by the rent guidelines board, pursuant to subdivision b of section 26-510 of this title, of the rent paid during the previous year. Notwithstanding any of the foregoing limitations in this paragraph five, maximum rent shall be increased if ordered by the agency pursuant to subparagraphs (d), (e), (f), (g), (h), (i), (k), or (m) of paragraph one of subdivision g of this section. Where a housing accommodation is vacant on January first, nineteen hundred seventy-two, or becomes vacant thereafter by voluntary surrender of possession by the tenants, the maximum rent established for such accommodations may be collected.
(6) Where a new maximum rent has been established pursuant to former subdivision m of this section or, following the repeal of such subdivision, pursuant to subparagraph (m) of paragraph one of subdivision g of this section, a new maximum rent shall not be established pursuant to paragraph three of this subdivision. Except with respect to a housing accommodation to which the preceding sentence applies, where the maximum rent on December thirty-first, nineteen hundred seventy-one is higher than the maximum rent established pursuant to paragraph three of this subdivision, such prior maximum rent shall continue in effect until the maximum rent under paragraph three, as adjusted from time to time pursuant to the provisions of this chapter, shall equal or exceed such prior maximum rent, at which time the maximum rent for such housing accommodations shall be as prescribed in this chapter.
(7) Section eight housing assistance.
(a) Notwithstanding any provision of this chapter, if during a rental period in which the landlord is eligible for an adjustment or establishment of rents pursuant to paragraph three or four of this subdivision, housing assistance payments are being made pursuant to section eight of the United States housing act of nineteen hundred thirty-seven, as amended, with respect to any housing accommodation covered by this chapter, the maximum rent collectible from the tenant in occupancy shall be the lesser of:
(1) the maximum rent established pursuant to paragraph three of this subdivision as adjusted pursuant to this chapter, computed without regard to the limitations of paragraph five of this subdivision (provided that in any case the rent paid by the tenant pursuant to this chapter without regard to this paragraph is higher than such rent, the rent paid shall be substituted for such rent), or
(2) the contract or fair market rent approved for the housing accommodation pursuant to federal law or regulation.
(b) Prior to the collection of any increase in maximum rent pursuant to this paragraph, the landlord shall advise the city rent agency of his or her intent to compute the maximum rent pursuant to this paragraph.
(c) If a housing accommodation to which this subdivision applies ceases for any reason to be governed by this paragraph, the maximum rent collectible from the tenant shall be computed as if this paragraph had not applied and any adjustments thereto which would have been permitted pursuant to this chapter during the period such rent was set by this paragraph shall be proper rental adjustments.
(8) Notwithstanding the provisions of this chapter, upon the sale in any manner authorized by law of a multiple dwelling which was previously subject to the provisions of such chapter and which was acquired by the city in a tax foreclosure proceeding or pursuant to article nineteen-A of the real property actions and proceedings law, for a dwelling unit which was subject to this chapter pursuant to the local emergency housing rent control act at the time the city so acquired title, is occupied by a tenant who was in occupancy at the time of acquisition and remains in occupancy at the time of sale, the maximum rent shall be the last rent charged by the city, or on behalf of the city, for such dwelling unit, which rent shall not exceed the rent computed pursuant to paragraph three of this subdivision, computed as of the time of such sale. This paragraph shall not apply to redemptions from city ownership pursuant to chapter four of title eleven of the code.
b. Such agency, to effectuate the purposes of this chapter, and in accordance with the standards set forth in paragraph two of subdivision c of this section, may set aside and correct any maximum rent resulting from illegality, irregularity in vital matters or fraud, occurring prior to or after May first, nineteen hundred sixty-two.
c. (1) Whenever such agency determines that such action is necessary to effectuate the purposes of this chapter, it may also establish maximum rents for housing accommodations to which this chapter applies, where no maximum rent with respect thereto was in effect on April thirtieth, nineteen hundred sixty-two, or where no registration statement had been filed with respect thereto as required by the state rent act, or where for any other reason the provisions of subdivision a of this section are not susceptible to application to any such housing accommodations.
(2) Such rents shall be established, having regard for the maximum rents for comparable housing accommodations or any other factors bearing on the equities involved, consistent with the purposes of this chapter.
d. Where any housing accommodations, which are decontrolled (including those decontrolled by order) or exempted from control pursuant to the provisions of subparagraph (i) of paragraph two of subdivision e of section 26-403 of this chapter, are certified by any city agency having jurisdiction to be a fire hazard or in a continued dangerous condition or detrimental to life or health, the city rent agency shall establish maximum rents for such housing accommodations, having regard for the maximum rents for comparable housing accommodations or any other factors bearing on the equities involved, consistent with the purposes of this chapter.
e. Notwithstanding any other provision of this chapter, and subject to the provisions of subdivision f of this section, provision shall be made pursuant to regulations prescribed by the city rent agency for the establishment, adjustment and modification of maximum rents with respect to rooming house and single room occupancy accommodations, which shall include those housing accommodations subject to control pursuant to the provisions of subparagraph (c) of paragraph two of subdivision e of section 26-403 of this chapter (other than those accommodations subject to control under the last proviso of such subparagraph (c)), having regard for any factors bearing on the equities involved, consistent with the purposes of this chapter, to correct speculative, abnormal and unwarranted increases in rent.
f. On or before June thirtieth, nineteen hundred sixty-two, the city rent agency shall undertake a survey and investigation of all factors affecting rents, rental conditions and rental practices with respect to rooming houses and single room occupancy accommodations within the city for the purpose of determining whether the provisions of this chapter and the regulations thereunder relating to the establishment and adjustment of maximum rents for rooming house and single room occupancy accommodations are reasonably designed to prevent exaction of unreasonable and oppressive rents. Not later than January fifteenth, nineteen hundred sixty-three, such agency shall submit to the council a report setting forth the results of such survey and investigation, together with the findings and recommendations of such agency and any amendments to this chapter and the regulations thereunder which such agency may deem necessary or desirable for the accomplishment of the purposes of this chapter in relation to such accommodations. During the period between May first, nineteen hundred sixty-two and the thirtieth day next succeeding the date of the submission of such report to the council (1) no application for an increase in any maximum rent for any rooming house or single room occupancy accommodations may be filed on any ground other than those specified in subparagraphs (f) and (g) of paragraph one of subdivision g of this section, and (2) no maximum rents for any rooming house or single room occupancy accommodations shall be increased on any grounds other than those specified in such subparagraphs (f) and (g); provided that where the maximum rents for any such accommodations were or are decreased prior to or during such period because of the landlord's reduction of living space, essential services, furniture, furnishings or equipment, and such reduction has been corrected, an application for restoration of the rent decrease may be filed and such rents may be adjusted so as to fix maximum rents which the city rent agency may determine to be proper, pursuant to the provisions of subdivision e of this section, but which shall not in any event exceed the maximum rents for such accommodations in effect immediately prior to such rent decrease.
g. (1) The city rent agency 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 chapter, 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 chapter; and provided further that such regulations shall be designed to maintain a system of rent controls at levels which, in the judgment of such agency, 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 such agency, for individual adjustment of maximum rents where:
(a) The rental income from a property yields a net annual return of less than six per centum of the valuation of the property.
(1) Such valuation shall be the current assessed valuation established by the city, which is in effect at the time of the filing of the application for an adjustment under this subparagraph (a); provided that:
(i) The city rent agency may make a determination that the valuation of the property is an amount different from such assessed valuation 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; and
(ii) Such agency may make a determination that the value of the property is an amount different from the assessed valuation where there has been a bona fide sale of the property within the period February first, nineteen hundred sixty-one, and the time of filing of the application, as the result of a transaction at arm's length, on normal financing terms, at a readily ascertainable price, and unaffected by special circumstances such as but not limited to a forced sale, exchange of property, package deal, wash sale or sale to a cooperative; provided, however, that where an application was filed under this subparagraph (a) on or before the effective date of this sub-item (ii), the city rent agency may determine the value of the property on the basis that there has been a bona fide sale of the property within the period between March fifteenth, nineteen hundred fifty-eight, and the time of the filing of the application. In determining whether a sale was on normal financing terms, such agency shall give due consideration to the following factors:
(a) the ratio of the cash payment received by the seller to (1) the sales price of the property and (2) the annual gross income from the property;
(b) the total amount of the outstanding mortgages which are liens against the property (including purchase money mortgages) as compared with the assessed valuation of the property;
(c) 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;
(d) the presence of deferred amortization in purchase money mortgages, or the assignment of such mortgage at a discount;
(e) Any other facts and circumstances surrounding such sale which, in the judgment of such agency, may have a bearing upon the question of financing; and
(iii) Where the assessed valuation of the land exceeds four times the assessed valuation of the buildings thereon, the city rent agency may determine a valuation of the property equal to five times the assessed valuation of the buildings, for the purposes of this subparagraph (a).
(2) An application for an increase in any maximum rent under this subparagraph (a) of this paragraph one may not be filed with respect to any property if, on the date when the application is sought to be filed:
(i) Less than two years have elapsed since the date of the filing of the last prior application for an increase under this subparagraph (a) of this paragraph one with respect to such property, which application resulted in the granting of an increase; or
(ii) Less than two years have elapsed since the last sale of the property, and the application is based upon a sale price in excess of the assessed valuation. This subitem shall not apply, however, where less than two years have elapsed since the last sale of the property and the application is based upon a sale within such two-year period at a price in excess of the assessed valuation, if such price is less than the price in the last sale which meets the criteria heretofore specified in this subparagraph (a) occurring prior to two years before the application is sought to be filed and since February first, nineteen hundred sixty-one.
(3) No increase in maximum rents shall be granted under this subparagraph (a) by the city rent agency while there is pending without final disposition any judicial proceeding to correct the final determination of the tax commission with respect to the assessed valuation of such property, (a) for the city fiscal year in which the landlord filed the application for such increase or (b) for the city fiscal year immediately preceding the filing of the application for such increase.
(4) For the purposes of this subparagraph (a):
(i) 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 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; and
(ii) Test year shall be the most recent full calendar year or the landlord's most recent fiscal year or any twelve consecutive months ending not more than ninety days prior to the filing of the application for an increase;
(b) Where a building contains no more than nineteen rental units and the landlord 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 allowance for depreciation, obsolescence and reserves, which have occurred since the federal date determining the maximum rent; or
(c) 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 such 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
(d) The landlord and tenant in occupancy 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 on the basis of specified increased services, furniture, furnishings, or equipment, provided the city rent agency determines that the specified increased services, furniture, furnishings or equipment have a market value commensurate with the increased rent, the increase maximum rent is not in excess of fifteen per centum and the lease is for a term of not less than two years, provided further that a report of lease is filed as prescribed by regulations issued by the city rent agency or has been otherwise accepted by such agency, and provided further, that where the entire structure, or any lesser portion thereof was vacated by order of a city department having jurisdiction, on or after November twenty-second, nineteen hundred sixty-three and any tenants therein were relocated by the department of relocation, or such structure was boarded up by the department of real estate, such lease increases in subsequently executed leases shall not become effective for any housing accommodations in the structure until such departments have been reimbursed for expenses necessarily incurred in connection with the foregoing; provided further, however, that the landlord may obtain such lease increases without making such reimbursement where the vacating was caused by fire or accident not resulting from any unlawful act or omission on the part of the landlord; or
(e) The landlord and tenant by mutual voluntary written agreement demonstrating informed consent agree to a substantial increase or decrease in dwelling space or a change in furniture, furnishings or equipment provided in the housing accommodations. An adjustment under this subparagraph shall be equal to 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 adjustment 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 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 prohibit 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 subparagraph 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 city rent agency of any such adjustment pursuant to this subparagraph; or
(f) There has been since March first, nineteen hundred fifty-nine, 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
(g) There has been since July first, nineteen hundred seventy, 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. The temporary increase based upon a major capital improvement under this subparagraph for any order of the commissioner issued after the effective date of the chapter of the laws of two thousand nineteen that amended this subparagraph shall be in an amount sufficient to amortize the cost of the improvements pursuant to this subparagraph (g) 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, or
(h) There have been since March first, nineteen hundred fifty-nine, in structures containing more than four housing accommodations, other improvements made with the express consent of the tenants in occupancy of at least seventy-five per centum of the housing accommodations; provided, however, that whenever the city rent agency has determined that the improvements proposed were part of a plan designed for overall improvement of the structure or increases in services, it may authorize increases in maximum rents for all housing accommodations affected upon the express consent of the tenants in occupancy of at least fifty-one per centum of the housing accommodations, and provided further that no adjustment granted hereunder shall exceed fifteen per centum unless the tenants have agreed to a higher percentage of increase, as herein provided; or
(i) There has been, since March first, nineteen hundred fifty-nine, 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 city rent agency or pursuant to the state rent act or the federal act; or
(j) 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.
(k) The landlord has incurred, since January first, nineteen hundred seventy, in connection with and in addition to a concurrent major capital improvement pursuant to subparagraph (g) of this paragraph, other expenditures to improve, restore or preserve the quality of the structure. An adjustment under this subparagraph shall be granted only if such improvements represent an expenditure equal to at least ten per centum of the total operating and maintenance expenses for the preceding year. An adjustment under this subparagraph shall be in addition to any adjustment granted for the concurrent major capital improvement and shall be in an amount sufficient to amortize the cost of the improvements pursuant to this subparagraph over a seven-year period.
(l) [Repealed.]
(m) Where the rehabilitation or improvement of sub-standard or deteriorated housing accommodations has been financed under a governmental program providing assistance through loans, loan insurance or tax abatement or has been undertaken under another rehabilitation program not so financed but approved by the commissioner.
(n) [Repealed.]
(o) (1) There has been an increase in heating and heating fuel expenditures in a property resulting from a city-wide rise in heating fuel costs such that the verifiable expenditures for heating or heating fuel in a property for nineteen hundred seventy-four exceeds the verifiable expenditures for such heating or heating fuel during nineteen hundred seventy-three.
(2) To obtain a rental adjustment pursuant to this subparagraph (o), the landlord must certify that he or she is presently maintaining all essential services required to be furnished with respect to the housing accommodations covered by such certification, and that he or she will continue to so maintain such essential services for the period of any such adjustment.
(3) To obtain a rental adjustment pursuant to this subparagraph (o), the landlord must certify on information and belief that he or she will not be earning an amount in excess of the statutory return specified in subparagraph (a) of paragraph one of subdivision g of this section after collection of such rental adjustment, with respect to the building or buildings serviced by a single heating plant; and where the building, or buildings serviced by a single heating plant, contains forty-nine or fewer housing accommodations, the landlord must certify that the amount expended directly for heating or heating fuel in nineteen hundred seventy-four equalled or exceeded ten per cent of the total rental income which was derived from the property during nineteen hundred seventy-four; and, where the building, or buildings serviced by a single heating plant, contains fifty or more housing accommodations the landlord must certify that the amount expended directly for heating or heating fuel in nineteen hundred seventy-four equalled or exceeded seven and one-half percentum of the total rental income which was derived from the property during nineteen hundred seventy-four.
(4) The total rental adjustments for a property to be allocated or deemed allocated pursuant to this subparagraph (o) shall not exceed one-half of the gross amount by which the total verifiable expenditures for heating or heating fuel for nineteen hundred seventy-four exceeds the total verifiable expenditures for such heating or heating fuel for nineteen hundred seventy-three.
(5) Such total rental adjustments shall be allocated or deemed allocated pursuant to this subparagraph (o) to all housing accommodations subject to this chapter, to all other housing accommodations, and to all commercial, professional and similar facilities in or associated with the property in a manner to be determined by the agency. In no event shall any adjustment in maximum rent pursuant to this subparagraph (o) for any housing accommodations subject to this chapter exceed a monthly increase of two dollars per room, as defined by item eight below. In any apartment containing five or more rooms, any increase shall not exceed the total of nine dollars.
(6) Any adjustment pursuant to this subparagraph (o) shall be effective for all or part of the period July first, nineteen hundred seventy-five through June thirtieth, nineteen hundred seventy-six. Any adjustment pursuant to this subparagraph shall automatically expire no later than June thirtieth, nineteen hundred seventy-six.
(7) The rental increases provided for herein shall be effective and collectible upon the landlord's filing a report with the agency on forms prescribed by the agency and upon giving such notice to the tenants as the agency shall prescribe, subject to adjustments upon order of the agency.
(8) In determining the amount of an adjustment allocation of an adjustment pursuant to this subparagraph (o), only living rooms, kitchens over fifty-nine square feet in area, dining rooms and bedrooms shall be considered rooms; bathrooms, foyers, and kitchenettes shall not be considered rooms.
(2) In any case where any housing accommodation was vacated on or after the effective date of this paragraph two, other than by voluntary surrender of possession or in the manner provided in this chapter, the city rent agency may, by regulations having due regard for the equities involved, bar adjustments pursuant to subparagraphs (f) and (g) of paragraph one of this subdivision g, except for work which:
(a) is necessary in order to remove violations against the property;
(b) is necessary to obtain a certificate of occupancy if such certificate is required by law; or
(c) could have been performed with a tenant in physical possession of the housing accommodation.
(3) Any adjustment pursuant to subparagraph (a), (b), or (c) of paragraph one of this subdivision shall be subject to the limitation set forth in paragraph five of subdivision a of this section; provided:
(a) that in ordering an adjustment pursuant to such subparagraph (a), the city rent agency may waive such limitation where a greater increase is necessary to make the earned income of the property equal to its operating expenses; and
(b) that where due to such limitation the landlord will not receive the full amount of the rent increase to which he or she would otherwise be entitled, the order of the city rent agency shall increase the maximum rent by a further additional amount during each succeeding twelve-month period, not to exceed seven and a half percentum of the maximum rent in effect on the date of the filing of the application for an adjustment, under the maximum rent shall reflect the full increase to which the landlord is entitled.
(4) 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 city rent agency shall give due consideration (a) to all previous adjustments or increases in maximum rents by lease or otherwise; and (b) 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 there is allocated to the controlled housing accommodations therein only that portion of the amount of increases necessary pursuant to subparagraph (a), (b), (c) or (k) of paragraph one of this subdivision g, as is properly attributable to such controlled accommodations.
(5) The city rent agency shall compile and make available for public inspection at reasonable hours at its principal office and at each appropriate local office, the manual of accounting procedures and advisory bulletins applicable to applications under subparagraphs (a), (b) and (c) of paragraph one of this subdivision g, and all amendments to such manual and bulletins.
(6) (a) No application for an increase in any maximum rent may be filed under subparagraph (a), (b) or (c) of paragraph one of this subdivision g with respect to any property unless there is annexed to such application:
(1) A report of search issued by the agency of the city having jurisdiction stating either that no violations against such property are recorded or a receipt (or photocopy thereof) issued by that agency attesting to the payment of the fee for the report of search or that all violations recorded against such property have been cleared, corrected or abated; and
(2) A certification by the landlord of such property that he or she is maintaining all essential services required to be furnished and that he or she will continue to maintain such services so long as any such increase in the maximum rent continues in effect.
(b) Except as provided in subparagraph (c) of this paragraph six and paragraph four of subdivision h of this section, no landlord shall be entitled to an increase in the maximum rent on any ground unless he or she certifies that he or she 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 or she 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 on any ground where an agency of the city having jurisdiction certifies that the housing accommodation is a fire hazard or is a continued dangerous condition or detrimental to life or health or is occupied in violation of law; nor shall any landlord be entitled to any increase where the landlord has not removed the violations recorded against such property as shown in the report of search required under subparagraph (a) of this paragraph six.
(c) Where an application for an increase in any maximum rent is filed under subparagraph (f) and/or (g) of paragraph one of this subdivision g, and the landlord is not entitled to any increase by reason of the provisions of subparagraph (b) of this paragraph six, the city rent agency may waive such provisions and issue orders increasing the maximum rent effective as of the date of the issuance of the orders provided, however, that the landlord agrees in writing to deposit the entire amount of such increase in maximum rent into an escrow account administered by the city rent agency in accordance with rules and regulations to be promulgated by such agency for the purpose of obtaining compliance with such provisions and further agrees to obtain and submit to the city rent agency within one year from the date of issuance of such orders; a report of search issued by the agency of the city having jurisdiction stating that the violations shown in the report of search required under subparagraph (a) of this paragraph six have been removed, cleared, corrected or abated, and his or her own certification that he or she is and will continue to maintain all essential services in accordance with the provisions of subparagraph (b) of this paragraph six. In the event the landlord fails to fully comply with such provisions within one year from the date of the issuance of the order increasing the maximum rent, the city agency may, having due regard for the equities involved, revoke such orders and direct full refund to the tenants of the entire increase paid by the tenants as a result of such orders. Any person serving as escrow agent shall not be liable except for fraud or misfeasance.
(d) No new maximum rent shall be established pursuant to paragraph three or four of subdivision a of this section unless not more than one hundred fifty days nor less than ninety days prior to the effective date thereof, the landlord has certified that he or she is maintaining all essential services required to be furnished with respect to the housing accommodations covered by such certification, and that he or she will continue to maintain such services so long as such new maximum rent is in effect. Each such certification filed to obtain a new maximum rent pursuant to paragraph four of subdivision a of this section shall be accompanied by a certification by the landlord that he or she has actually expended or incurred ninety per centum of the total amount of the cost index for operation and maintenance established for his or her type of building.
(e) The city rent agency shall establish a counseling service to provide assistance to tenants and to landlords of buildings containing nineteen or fewer housing accommodations, by way of instruction in the management, maintenance and upkeep of housing accommodations, their respective responsibilities thereto, the programs and enforcement remedies available in the agency and from other city agencies, and assistance in the preparation of applications and other forms.
(7) Before ordering any adjustment in maximum rents, the city rent agency shall accord a reasonable opportunity to be heard thereon to the tenant and the landlord.
h. (1) Whenever in the judgment of the city rent agency such action is necessary or proper in order to effectuate the purposes of this chapter, such agency 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 such agency are equivalent to or are likely to result in rent increases inconsistent with the purposes of this chapter.
(2) Whenever in the judgment of such agency such action is necessary or proper in order to effectuate the purposes of this chapter, such agency 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 such agency shall have power by regulation or order to decrease the maximum rent or take action as provided in paragraph four of this subdivision h for any housing accommodation with respect to which a maximum rent is in effect, pursuant to this chapter, if it shall find that the living space, essential services, furniture, furnishings or equipment to which the tenant was entitled on such date have been decreased. The amount of the reduction in maximum rent ordered by such agency 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.
(3) Whenever any agency of the city 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 city rent agency may issue an order decreasing the maximum rent or take action as provided in paragraph four of this subdivision h for such housing accommodation in such amount as it deems necessary or proper, until the agency issuing such certification has certified that such housing accommodation is no longer a fire or other hazard and is not in a condition detrimental to life and health and is not occupied in violation of law.
(4) (a) Whenever in the judgment of the city rent agency such action is necessary or proper in order to effectuate the purposes of this chapter, such agency may, in lieu of decreasing the maximum rents as provided in paragraphs two and three of this subdivision h, enter into a contract wherein the landlord agrees in writing to deposit all income derived from the property, including income from spaces and accommodations not controlled, into an escrow or trust account for use in maintaining or restoring essential services and equipment, for removing violations against the property or housing accommodations therein, making such repairs as are necessary to remove a certification from any city agency having jurisdiction thereof 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, and/or for such other uses as the city rent agency deems necessary or proper for the preservation, repair or maintenance of the property. The city rent agency may adopt such rules and regulations and orders as it may deem necessary or proper to effectuate the purposes of this paragraph, including but not limited to the issuance of orders adjusting all controlled rents to the appropriate maximum rent effective as of the first day of the month following the execution of the contract provided, however, that in the event the city rent agency shall determine that the landlord has breached such contract, such agency may issue orders (1) decreasing the maximum rents pursuant to such contract; (2) containing a directive that rent collected by the landlord in excess of the rent thus decreased be refunded to the tenants; and (3) containing such other determinations and directives as are necessary in order to effectuate the purposes of this paragraph four.
(b) Notwithstanding any provision of this chapter to the contrary, whenever in the judgment of the city rent agency action as provided in paragraph two or three of this subdivision h is necessary or proper in order to effectuate the purposes of this chapter, such agency may in lieu of decreasing the maximum rents thereof issue orders adjusting all controlled rents and directing that rents be paid into an escrow account for the uses stated in subparagraph (a) of this paragraph four where:
(1) The landlord fails to take corrective action after notice by the city rent agency of proposed action to decrease the maximum rents pursuant to paragraph two or three of this subdivision h, and,
(2) The city rent agency has notified all mortgagees who have filed with the city rent agency a declaration of interest in such property and in such proposed action, and,
(3) The landlord has failed for three consecutive months to collect any controlled rents or to commence court proceedings for their collection or if such proceedings have been commenced, the landlord has not diligently prosecuted them or such proceedings have not resulted in judgment in favor of such landlord.
(c) The city rent agency shall promulgate rules and regulations for the administration of escrow and trust accounts set forth in this paragraph four. Any person serving as escrow agent or trustee shall not be liable except for fraud, breach of fiduciary duties or misfeasance.
(5) Whenever the essential services, furnishings, furniture or equipment of any individual housing accommodation are reduced, impaired, mutilated, or made unworkable as the result of the neglect, failure to exercise due care, or failure of the tenant to take practicable precautions to prevent such condition, the landlord shall restore such services, furniture, furnishings or equipment and pursuant to regulations to be prescribed by the city rent agency may make application for a temporary increase in the maximum rent based upon the cost of such restoration. In the event of the failure of the tenant to make restitution within a reasonable time, as determined by the city rent agency an order shall be issued adjusting the maximum rent for such tenant in an amount sufficient to recover the cost over twelve monthly installments, or until the tenant surrenders possession, whichever is sooner. The provisions of this paragraph shall be in addition to all other rights and remedies of the landlord.
(6) If at least six months before the effective date of any adjustment or establishment of rents pursuant to paragraph three or four of subdivision a of this section, the landlord has not certified to the agency having jurisdiction that (a) all rent impairing violations (as defined by section three hundred two-a of the multiple dwelling law), and (b) at least eighty per centum of all other violations of the housing maintenance code or other state or local laws that impose requirements on property that were recorded against the property one year prior to such effective date have been cleared, corrected, or abated, no increase pursuant to such paragraphs shall take effect until he or she shall have entered into a written agreement with the city rent agency to deposit all income derived from the property into an escrow or trust account pursuant to subparagraph (a) of paragraph four of this subdivision, in addition to the procedures set forth in this paragraph and all other applicable penalties and procedures under this chapter, such violation shall also be subject to repair or removal by the city pursuant to the provisions of article five of subchapter five of the housing maintenance code, the landlord to be liable for the cost thereof.
i. 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 including the establishment of new or adjusted maximum rents in whole dollar amounts, and such reasonable exceptions as in the judgment of the city rent agency are necessary or proper in order to effectuate the purposes of this chapter.
j. No increase or decrease in maximum rent shall be effective prior to the date on which the order therefor is issued, except as hereinafter provided. If an application for an increase pursuant to subparagraph (a) of paragraph one of subdivision g of this section submitted on or after August first, nineteen hundred seventy is accompanied by a certified statement of expenditures and no order is issued thereon within four months of the filing of an application based on assessed value or equalized assessed value, or eight months of the filing of an application based on sale price, with all required documentation the increased rent requested shall thereafter be placed in an interest bearing escrow account until a final determination is made upon such application by the city rent agency. Upon initial determination by the agency an order shall be issued providing for the payment of the increased amount, if any, due to the landlord from the date of first deposit of rent in said escrow account with interest, and the excess amount, if any, be paid the tenants entitled thereto, with an appropriate amount of interest. The city rent agency shall promulgate rules and regulations for the administration of such escrow accounts. Any person serving as escrow agent shall not be liable except for fraud or misfeasance.
k. Regulations, orders, and requirements under this chapter may contain such provisions as the city rent agency deems necessary to prevent the circumvention or evasion thereof.
l. The powers granted in this action shall not be used or made to operate to compel changes in established rental practices, except where such action is affirmatively found by the city rent agency to be necessary to prevent circumvention or evasion of any regulation, order, or requirement under this chapter.
m. Findings. The council finds that there is an acute and continuing housing shortage; that this shortage has and continues to have an adverse effect on the population and especially on inhabitants of the city who are sixty-two years of age or older and of limited means, as well as persons with disabilities, who cannot pay enough rent to induce private enterprise to maintain decent housing at rents they can afford to pay; that this condition is and continues to be particularly acute in a time of rising costs such as the present; that present rising costs and the continuing increase in rents pursuant to amendments to the New York city rent and rehabilitation law may result in such persons being unable to pay their rent, thus making them subject to eviction; that such hardships fall with particular severity upon older persons in the population, as well as persons with disabilities, because of their particular inability to find alternative accommodations within their means, because of the trauma experienced by many older persons, as well as persons with disabilities, who have to relocate and because they may endanger their health by paying additional sums for shelter and thereby deprive themselves of other necessities; that hardships imposed upon such people adversely affect their health and welfare and the general welfare of the inhabitants of the city. The council is aware of the provisions set forth in chapter three hundred seventy-two and chapter one thousand twelve of the laws of nineteen hundred seventy-one. It is our considered opinion that this legislation extending the rent exemption to cover the resultant rent increases due to the maximum rents established January first, nineteen hundred seventy-two, is not more stringent or restrictive than those presently in effect. It is found and declared to be necessary for the health, welfare and safety of persons who are sixty-two years of age or older, persons with disabilities and inhabitants of the city that the city continue a system of special rent adjustments for such older persons, as well as extend such special rent adjustments to persons with disabilities as hereinafter provided.
(1) No increase in maximum rent pursuant to paragraph two or paragraph three, four or five of subdivision a of this section, or subparagraph (a), (b), (c), (l) or (n) of paragraph one of subdivision g of this section, shall be collectible from a tenant to whom there has been issued a currently valid rent exemption order pursuant to this subdivision, except as provided in such order.
(2) A tenant is eligible for a rent exemption order pursuant to this subdivision if:
(i) the head of the household residing in the housing accommodation is sixty-two years of age or older or is a person with a disability, and is entitled to the possession or to the use or occupancy of a dwelling unit. To qualify as a person with a disability for the purposes of this section, an individual shall submit to such agency as the mayor shall designate proof (as specified by regulation of such agency as the mayor shall designate) showing that such individual is currently receiving social security disability insurance (SSDI) or supplemental security income (SSI) benefits under the federal social security act or disability pension or disability compensation benefits provided by the United States department of veterans affairs, or was previously eligible by virtue of receiving disability benefits under the supplemental security income program or the social security disability program and is currently receiving medical assistance benefits based on determination of disability as provided in section three hundred sixty-six of the social services law.
(ii) the aggregate disposable income (as defined by regulation of the department of finance) of all members of the household residing in the housing accommodation whose head of household is sixty-two years of age or older does not exceed twenty-five thousand dollars beginning July first, two thousand five, twenty-six thousand dollars beginning July first, two thousand six, twenty-seven thousand dollars beginning July first, two thousand seven, twenty-eight thousand dollars beginning July first, two thousand eight, twenty-nine thousand dollars beginning July first, two thousand nine, and fifty thousand dollars beginning July first, two thousand fourteen, per year, after deduction of federal, state and city income and social security taxes. For purposes of this subparagraph, "aggregate disposable income" shall not include gifts or inheritances, payments made to individuals because of their status as victims of Nazi persecution, as defined in P.L. 103-286, or increases in benefits accorded pursuant to the social security act or a public or private pension paid to any member of the household which increase, in any given year, does not exceed the consumer price index (all items United States city average) for such year which take effect after the date of eligibility of a head of the household receiving benefits under this subdivision whether received by the head of the household or any other member of the household.
(iii) the aggregate disposable income (as defined by regulation of such agency as the mayor shall designate) for the current income tax year of all members of the household residing in the housing accommodation whose head of the household is a person with a disability pursuant to this section does not exceed fifty thousand dollars beginning July first, two thousand fourteen. For purposes of this subparagraph, "aggregate disposable income" shall not include gifts or inheritances, payments made to individuals because of their status as victims of Nazi persecution, as defined in P.L. 103-286, or increases in benefits accorded pursuant to the social security act or a public or private pension paid to any member of the household which increase, in any given year, does not exceed the consumer price index (all items United States city average) for such year which take effect after the date of eligibility of a head of the household receiving benefits under this subdivision whether received by the head of the household or any other member of the household.
(iv) (a) in the case of a head of the household who does not receive a monthly allowance for shelter pursuant to the social services law, (A) the maximum rent for the housing accommodations exceeds one-third of the aggregate disposable income, or (B) if any expected increase in the maximum rent pursuant to paragraph two, three, four or five of subdivision a of this section, or subparagraph (a), (b), (c), (l) or (n) of paragraph one of subdivision g of this section would cause such maximum rent to exceed one-third of the aggregate disposable income, or (C) if such head of household has been granted a rent increase exemption order that is in effect as of January first, two thousand fifteen or takes effect on or before July first, two thousand fifteen regardless of whether the maximum rent or any expected increase described in this clause exceeds one-third of the aggregate disposable income; or
(b) in the case of a head of the household who receives a monthly allowance for shelter pursuant to the social services law, the maximum rent for the housing accommodations exceeds the maximum allowance for shelter which the head of the household is entitled to receive pursuant to the social services law or if any expected increase in the maximum rent pursuant to paragraph two, three, four or five of subdivision a of this section, or subparagraph (a), (b), (c), (l) or (n) of paragraph one of subdivision g of this section would cause such maximum rent to exceed the maximum allowance for shelter which the head of the household is entitled to receive.
(3) (a) A rent exemption order pursuant to this subdivision shall provide:
(i) in the case of a head of the household who does not receive a monthly allowance for shelter pursuant to the social services law, that the landlord may not collect from the tenant to whom it is issued rent at a rate in excess of one-third of the aggregate disposable income, or the maximum collectible rent in effect on December thirty-first of the year preceding the effective date of the order, whichever is greater; or
(ii) in the case of a head of the household who receives a monthly allowance for shelter pursuant to the social services law, that the landlord may not collect from the tenant to whom it is issued rent at a rate in excess of either the maximum allowance for shelter which the head of the household is entitled to receive, or the maximum collectible rent in effect on December thirty-first of the year preceding the effective date of the order, whichever is greater; except,
(iii) notwithstanding clause (i) of this subparagraph, in the case of an eligible head of the household who has been granted a rent increase exemption order that is in effect as of January first, two thousand fifteen or takes effect on or before July first, two thousand fifteen, that the landlord may not collect from the tenant to whom it is issued rent at a rate in excess of the amount specified in such order, except as may be adjusted by any other provision of this chapter; and except (iv) that the landlord may collect from the tenants described in clause (i) and items (ii) and (iii) of this subparagraph increases in rent pursuant to subparagraphs (d), (e), and (i) of paragraph one of subdivision g of this section.
(b) Each such order shall expire upon termination of occupancy of the housing accommodation by the tenant to whom it is issued. The landlord shall notify the department of finance, in the case of a household whose eligibility for such order is based on the fact that the head of such household is sixty-two years of age or older, or such agency as the mayor shall designate, in the case of a household whose eligibility for such order is based on the fact that the head of such household is a person with a disability, on a form to be prescribed by such department or agency, within thirty days of each such termination of occupancy.
(c) When a rent reduction order is issued by the city rent agency, the amount of the reduction shall be subtracted from the rent payable by the tenant specified in a currently valid rent exemption order issued pursuant to this subdivision. The landlord may not collect from the tenant a sum of rent exceeding the adjusted amount while the rent reduction order is in effect.
(4) Any landlord who collects, or seeks to collect or enforce, rent from a tenant in violation of the terms of a rent exemption order shall, for the purposes of all remedies, sanctions and penalties provided in this chapter, be deemed to have collected or attempted to collect or enforce, a rent in excess of the legal maximum rent.
(5) A rent exemption order shall be issued to each tenant who applies to the department of finance or such agency as the mayor shall designate (which agency may also be the department of finance) in accordance with such department's or agency's regulations and who is found to be eligible under this subdivision. Such order shall take effect on the first day of the first month after receipt of such application, except that where the aggregate disposable income of all members of the household residing in the housing accommodation whose head of the household is sixty-two years of age or older is greater than five thousand dollars per year but does not exceed twenty-five thousand dollars beginning July first, two thousand five, twenty-six thousand dollars beginning July first, two thousand six, twenty-seven thousand dollars beginning July first, two thousand seven, twenty-eight thousand dollars beginning July first, two thousand eight, twenty-nine thousand dollars beginning July first, two thousand nine, and fifty thousand dollars beginning July first, two thousand fourteen, per year pursuant to subparagraph (ii) of paragraph two of subdivision m of this section on orders issued on applications received before July first, nineteen hundred seventy-five, the effective date of such order shall be the later of (1) June thirtieth, nineteen hundred seventy-four or (2) the last day of the month in which a person becomes an eligible head of household in the housing accommodation in which such person resides at the time of filing the most recent application for a rent exemption order; and further, except that where any other application has been received within ninety days of the issuance of the order increasing the tenant's maximum rent pursuant to paragraph three, four or six of subdivision (a) of this section, or subparagraph (a), (b), (c), or (l) of paragraph (1) of subdivision (g) of this section or pursuant to court order, whichever is later, the rent exemption order shall without further order take effect as of the effective date of said order increasing the tenant's rent including any retroactive increments collectible pursuant to such orders.
(6) A rent exemption order shall be valid for a period of two years and may be renewed for further two year periods upon application by the tenant; provided, that upon any such renewal application being made by the tenant, any rent exemption order then in effect with respect to such tenant shall be deemed renewed until such time as the department of finance or such other agency as the mayor shall designate shall have found such tenant to be either eligible or ineligible for a rent exemption order but in no event for more than six additional months. If such tenant is found eligible, the order shall be deemed to have taken effect upon expiration of the exemption. In the event that any such tenant shall, subsequent to any such automatic renewal, not be granted a rent exemption order, such tenant shall be liable to his or her landlord for the difference between the amounts he or she has paid under the provisions of the automatically renewed order and the amounts which he or she would have been required to pay in the absence of such order. Any rent exemption order issued pursuant to this subdivision shall include provisions giving notice as to the contents of this paragraph relating to automatic renewals of rent exemption orders. Any application or renewal application for a rent exemption order shall also constitute an application for a tax abatement under such section. The department of finance and such other agency as the mayor shall designate may, with respect to renewal applications by tenants who have been found eligible for rent exemption orders, prescribe a simplified form including a certification of the applicant's continued eligibility in lieu of a detailed statement of income and other qualifications.
(7) Notwithstanding the provisions of this chapter, a tenant who resides in a housing accommodation which becomes subject to this chapter upon the sale by the city of New York of the building in which such housing accommodation is situated may be issued a rent increase exemption order for increases in rent which occurred during ownership of such building by the city of New York provided that such tenant would have been otherwise eligible to receive a rent increase exemption order at the time of such increase but for the fact that such tenant occupied a housing accommodation owned by the city of New York and was therefore not subject to this chapter. Application for such rent increase exemption orders shall be made within one year from the date such building is sold by the city of New York or within one year of the effective date of this provision, whichever is later.
(8) Notwithstanding the provisions of this chapter or chapter four of this title, when a dwelling unit is subject to regulation under this chapter or chapter four of this title is reclassified by a city rent agency order subject to the other chapter, the tenant, who holds a senior citizen rent increase exemption order or disability rent increase exemption order at the time of the reclassification or is otherwise eligible and entitled to an exemption order from one or more rent increases but for the reclassification of the dwelling unit, may be issued a rent increase exemption order under the chapter to which the unit is thereafter subject by virtue of the reclassification continuing the previous exemption notwithstanding the reclassification of the dwelling unit or, where no previous rent increase exemption order has been granted, issuing an initial order exempting the tenant from paying the rent increase to the extent for which he or she would have been eligible and entitled to be exempted at the time of the increase and reclassification but for the fact of reclassification of the dwelling unit including exemption from the rent increase granted pursuant to subparagraph (m) of paragraph one of subdivision g of this section to the extent that it is not predicated upon any improvement or addition in a category as provided for in subparagraph (d), (e), (f), (g), (h) or (i) of paragraph one of subdivision g of this section. Application for such rent increase exemption order shall be made within ninety days from the date of reclassification or within ninety days of the effective date of this paragraph, whichever is later. The rent increase exemption order shall take effect as of the effective date of reclassification including any retroactive increments pursuant to such rent increase.
(9) Notwithstanding any other provision of law to the contrary, where a head of household holds a current, valid rent exemption order and, after the effective date of this paragraph, there is a permanent decrease in aggregate disposable income in an amount which exceeds twenty percent of such aggregate disposable income as represented in such head of the household's last approved application for a rent exemption order or for renewal thereof, such head of the household may apply for a redetermination of the amount set forth therein. Upon application, such amount shall be redetermined so as to re-establish the ratio of adjusted rent to aggregate disposable income which existed at the time of the approval of such eligible head of the household's last application for a rent exemption order or for renewal thereof; provided, however, that in no event shall the amount of the adjusted rent be redetermined to be (i) in the case of a head of the household who does not receive a monthly allowance for shelter pursuant to the social services law, less than one-third of the aggregate disposable income unless such head of the household has been granted a rent exemption order that is in effect as of January first, two thousand fifteen or takes effect on or before July first, two thousand fifteen; or (ii) in the case of a head of the household who receives a monthly allowance for shelter pursuant to the social services law, less than the maximum allowance for shelter which such head of the household is entitled to receive pursuant to such law. For purposes of this paragraph, a decrease in aggregate disposable income shall not include any decrease in such income resulting from the manner in which such income is calculated pursuant to any amendment to paragraph c of subdivision one of section four hundred sixty-seven-b of the real property tax law, any amendment to the regulations of the department of finance made on or after the effective date of the local law that added this clause, or any amendment to the regulations of such other agency as the mayor shall designate made on or after October tenth, two thousand five. For purposes of this paragraph, "adjusted rent" shall mean maximum rent less the amount set forth in a rent exemption order.
(Am. 2015 N.Y. Laws Ch. 20 Pt. A § 31, 6/26/2015, eff. 6/26/2015; Am 2015 N.Y. Laws Ch. 553, 12/11/2015, eff. 12/11/2015; Am. 2019 N.Y. Laws Ch. 36 Pt. H §§ 1, 2, Pt. K §§ 3, 10, 6/14/2019, eff. 6/14/2019; Am. 2019 N.Y. Laws Ch. 39 Pt. Q §§ 20, 27, 6/24/2019, retro eff. 6/14/2019; Am. 2024 N.Y. Laws Ch. 56 Pt. FF § 5, 4/20/2024, eff. 10/17/2024; Am. 2024 N.Y. Laws Ch. 458, 11/22/2024, eff. 11/22/2024)
Editor's note: For related unconsolidated provisions, see Appendix A at L.L. 1986/052, L.L. 1988/067, L.L. 1992/040, L.L. 1992/096, L.L. 1996/001, L.L. 1997/073, L.L. 2003/056, L.L. 2003/067, L.L. 2005/021, L.L. 2009/044, L.L. 2014/019, L.L. 2014/039, L.L. 2017/024, and L.L. 2020/112.
