2012 Annual Review New York State Homes & Community Renewal Office of Rent Administration ANDREW M. CUOMO, Governor DARRYL C. TOWNS, Commissioner/CEO

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1 2012 Annual Review New York State Homes & Community Renewal Office of Rent Administration ANDREW M. CUOMO, Governor DARRYL C. TOWNS, Commissioner/CEO

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3 2012 Annual Review New York State Homes & Community Renewal Office of Rent Administration Contents Office of Rent Administration Mission Statement...2 Letter from the Commissioner/CEO...3 A History of Rent Regulation...5 Organization...6 Office of Rent Administration s Bureaus...8 Changes to Rent Laws Over the Years...12 ORA Enhancements...14 Improving Outreach...15 ORA is Here to Help...16 Borough and District Rent Offices...17 Glossary of Terms...18 All Photographs from the New York State Homes & Community Renewal Photographic Archives NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 1

4 ORA s Mission HCR s Office of Rent Administration (ORA) is committed to effectively administering New York State s Rent Laws, which provide decent, affordable housing for millions of New Yorkers. The laws and regulations are designed to afford owners an adequate return on investment while protecting tenants from unlawful rent increases, harassment, and illegal evictions in a market with a persistent shortage of decent affordable rental housing. As the Administrator of the laws and custodian of all rent registration records, the ORA is responsible for responding to applications and legitimate inquiries of tenants and owners of the more than one million regulated apartments.

5 Letter from the Commissioner Dear Friend: New York State Homes and Community Renewal s Office of Rent Administration (ORA) has overseen the State s Rent Regulation Laws since 1984, helping provide safe, decent homes for families and vital information to help owners who maintain their properties see an adequate return on investment. This has been a remarkable year under Governor Andrew Cuomo s leadership and we ve all seen the incredible impact his vision has had on New York State. At HCR we ve experienced the Governor s commitment to making our state a better place to live through his working with the Legislature to enact the state s strongest rent laws since 1974 and creation of a dedicated Tenant Protection Unit. Many long-overdue and historic improvements are now helping to keep almost 100,000 units in the system and affordable for New Yorkers. The ORA continued this effort by putting a variety of measures in place to strengthen tenants rights and increase access to information for owners and tenants. We ve eliminated many timeconsuming steps so that we can more quickly respond to complaints, strengthened enforcement measures, increased inspector training requirements, and cross-trained staff to handle a variety of issues.we ve also made information more easily accessible and available in multiple languages through the Rent Info Line, borough and district offices, and our website. I want to thank the professional, dedicated ORA staff that work day and night on the ground in communities attending meetings, answering questions, and listening to concerns. HCR is committed to making rent regulation work. This report will highlight the steps we ve taken this past year and provide what I hope you ll find to be an informative overview of the work of ORA and of New York s rent regulation system. DARRYL C. TOWNS HCR Commissioner/CEO NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 3

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7 A History of Rent Regulation Rent regulation began in 1943 as a federal initiative to stabilize the economy after World War II and address a severe housing shortage. In 1950 New York State first assumed responsibility for administering rent controls through the Temporary State Housing Rent Commission. In 1962, New York City began administering its own program, and in 1964, the New York State Division of Housing and Community Renewal (DHCR), now an agency under the HCR umbrella, assumed responsibility for administering rent control in municipalities outside New York City. In 1969, New York City expanded the current rent stabilization laws through the enactment of the Rent Stabilization Law of This new law placed approximately 400,000 previously exempt apartments under a new system of rent regulation. In 1974 the State passed the Emergency Tenant Protection Act (ETPA) which provided for a stabilization system in Nassau, Rockland and Westchester counties in municipalities choosing to adopt the regulations. DHCR implemented ETPA in these counties. ETPA also amended the New York City Rent Stabilization Law, re-regulating many decontrolled apartments and placing additional buildings under stabilization for the first time. DHCR assumed jurisdiction over the administration of rent regulation throughout New York State effective April 1, 1984, pursuant to the Omnibus Housing Act of Today there are approximately 43,000 buildings and 900,000 units under the rent stabilization system, and approximately 33,800 units under Rent Control. These Rent Regulated apartments are an essential component of affordable housing in New York. Today there are approximately 43,000 buildings and 900,000 units under the rent stabilization system, and approximately 33,800 units under Rent Control. These Rent Regulated apartments are an essential component of affordable housing in New York. NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 5

8 Organization Darryl C. Towns HCR Commissioner/CEO ORA Senior Staff Woody Pascal Deputy Commissioner Office of Rent Administration Michael B. Rosenblatt Deputy Counsel and Bureau Chief Rent Control/ETPA Bureau John Lance Bureau Chief Overcharge and Luxury Decontrol Bureau Paul Fuller Bureau Chief Property Management Bureau Bruce Falbo Bureau Chief Rent Information Bureau Michael Berrios Executive Assistant to the Deputy Commissioner Darryl C.Towns was named by Governor Andrew M. Cuomo to serve as Commissioner/CEO of NYS Homes & Community Renewal (HCR), which includes all of the state s integrated housing and community renewal agencies and programs. Prior to his appointment, Commissioner/CEO Towns served in the NYS Assembly for 18 years, where he chaired the Banking Committee and served on the Education, Health, Rules and Economic Development, Job Creation, Commerce and Industry committees. Towns also served as Chairman of the Subcommittee on Mass Transit and in 2007 was elected chair of the State Legislature s Black, Puerto Rican, Hispanic & Asian Legislative Caucus. During his 18 years in the New York State Assembly, Commissioner Towns worked closely with not-for-profit housing agencies and community development corporations to revitalize neighborhoods and build and preserve affordable housing for his constituents. He sponsored legislation to improve access to affordable housing for disabled veterans, and was a strong advocate of projects that provided affordable housing units for rentals and homeownership, including a long-awaited mixed-use development that helped revitalize a once desolate section of the Fulton Street commercial strip in Cypress Hills. Commissioner Towns also secured grant funding for the development of the Cypress Hills Community School, Brooklyn s first green school building. He also sponsored legislation to battle predatory lending, subprime lending and the myriad of mortgage and refinancing scams that plagued communities across New York State. He also supported mortgage foreclosure prevention services in the most impacted communities, and authored legislation to institute mandatory settlement conferences. Commissioner/CEO Towns also sponsored legislation to support community and economic development efforts, including a measure to revise and expand the State Charter Deposit Program. The measure encouraged the State to place funds in local community banks in order to support and promote local economic activity. He also sponsored legislation to create the New York State Community Development Financial Institutions Program, to ensure that capital is available for small businesses. Towns attended City University of New York s Medgar Evers College and earned a Bachelor of Science degree in Economics from North Carolina Agricultural and Technical State University. He also served in the US Air Force for five years. Commissioner/CEO Towns is the son of veteran Congressman Edolphus Ed Towns. He lives in Brooklyn with his wife, Karen Boykin-Towns, and their daughters, Jasmine and Trinity. 6 NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration

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10 Office of Rent Administration s Bureaus The Office of Rent Administration (ORA) is committed to effectively administering New York State s Rent Laws and maintaining this critical stock of affordable rent stabilized and rent controlled housing. Overcharge and Luxury Decontrol Bureau Total Treble Damages Awarded $2 million 2010 $1.7 million 2009 $2.1 million Total Overcharge Amount Awarded 2010 $1.4 million 2009 $1.8 million 2011 $1.4 million ORA s Overcharge Unit processes overcharge, lease renewal, and fair market rent appeal complaints from tenants, and handles cases related to evictions and demolition. The Luxury Decontrol Unit of the bureau processes all luxury decontrol cases. Each apartment s rent is unique and individually developed, and overcharge case processing involves the analysis of numerous complex issues and calculations including verification of registration and documentation of individual apartment improvements. The processing of each case must also take into account the impact of services-related rent reductions and restorations, Major Capital Improvement (MCI) increases, and the timeliness of lease renewal offerings and collection of rental increases. Fair Market Rent Appeals are complaints disputing the amount of rent charged in newly stabilized apartments that were formerly rent controlled. An owner must notify the first rent stabilized tenant of the Initial Regulated Rent, by certified mail. This notification must take place within 90 days from the date the tenant moves into the apartment. The tenant has 90 days to challenge this rent with HCR, otherwise the Initial Regulated Rent is no longer subject to challenge by the occupying tenant or any subsequent tenant. The Overcharge Unit also processes substantial rehabilitation applications where the owner alleges that the building was substantially rehabilitated as family units on or after January 1, 1974, as well as applications by owners seeking permission to refuse to renew leases based upon the fact that they plan to demolish the building. Luxury Decontrol Unit was formed to process all cases derived from the luxury decontrol provisions of the Rent Regulation Reform Act of This Unit focuses on the single case type that provides for deregulation on the basis of the economic characteristics of the household. If the tenant s household income is in excess of $200,000 in each of the preceding two calendar years and the tenant s rent is $2,500 or more per month, the apartment, upon application of the owner, is subject to deregulation. 8 NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration

11 Property Management Bureau The Property Management Bureau processes building-wide owner applications for rent increases based on MCIs, hardship rent increases, tax abatement offsets and owner applications for modification of building-wide services. The bureau also processes tenant applications related to the maintenance of both individual apartment and building-wide services, tenant complaints of harassment and tenant complaints of non-compliance with DHCR orders. In addition, the bureau makes administrative determinations where the legal rent or other facts are in dispute, in doubt or unknown. The bureau also oversees the Inspection Unit for ORA. MCI Unit processes applications by owners who undertake building-wide MCIs to increase rents by 1/84th of approved cases. These increases are for the "operation, preservation and maintenance of the building" and must meet all other criteria established for an MCI rent increase. The MCI unit reviews applications for all rent regulated buildings throughout New York State, audits the scope of work and costs of projects, seeks input from the tenants, and issues orders pertaining to eligibility. In addition, tax abatement orders are issued which modify MCI rent increases for tenants in buildings where the owner has taken advantage of J-51 tax abatements. During the past year, ORA reviewed applications related to the investment in capital improvements and modernization of the housing stock in rent regulated buildings, in excess of $200 million dollars. After review, applications in excess of $144 million dollars were allowed. Services Unit. Tenants may file for rent reductions based upon defective conditions in an individual apartment and/or building-wide. The Services Unit will determine if: A service is required to be provided to the tenant by the owner Whether such service is being adequately maintained DHCR will issue an order reducing the tenant's rent and ordering the owner to restore services if the facts so warrant. Owners may file for a rent restoration of a previously reduced rent by demonstrating that the services in question have been restored or are Major Capital Improvement Applications Total Applications Denied or Reduced Granted In the past three years, ORA s evaluations have resulted in the reduction or denial of the majority of applications filed for rent increases due to Major Capital Improvements. NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 9

12 ORA Case Resolutions ,000 25,000 20,000 15,000 10,000 5, Avg. Total Cases now being adequately maintained. In 2011 ORA reconfigured the services unit to establish a team which deals with the most serious service deprivation complaints on a priority basis. This has resulted in inspections being performed and services being restored or orders issued within 60 days of the filing of the complaint. Compliance Unit. Tenants may file a complaint of non-compliance where the owner fails to follow a directive issued by DHCR. The Compliance Unit utilizes mediation techniques and, if necessary, may recommend a formal administrative hearing resulting in the imposition of civil penalties. ORA recently restructured its Compliance Unit to more efficiently respond to cases of alleged owner non-compliance with agency orders. An owner who has not made repairs or quickly settled the matter for a civil penalty (as well as a promise to make the repairs within a specified time), will now find his case referred to the Enforcement Unit for prosecution before an Administrative Law Judge and face a possible fine of $1,000-$2,000. Enforcement Unit. HCR is committed to protecting tenants from harassment. If a tenant believes an owner is violating their rights under the rent laws, they may file a complaint of harassment with DHCR. The Enforcement Unit, staffed by attorneys, investigates and if necessary, prosecutes complaints and a finding of harassment and civil penalties may be imposed. Where an owner has been found guilty of harassment, civil penalties of $2,000-$10,000 may be imposed after hearing. ORA s Inspections Unit provides support to all case processing bureaus. Under Governor Cuomo s leadership, ORA recently strengthened this unit by requiring inspectors to receive training by New York City Department of Housing Preservation and Development (HPD) to ensure continuity and collaboration between the two agencies in the effort to protect tenants, and coordinating inspectors between boroughs to prevent a back- log of inspections. 10 NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration

13 Rent Control/ETPA Bureau The Rent Control/ETPA Bureau contains the Cyclical Cases Unit, the Owner Individual Unit and the Research and Analysis Unit. Rent laws permit the HCR to reopen and reconsider a case on its own initiative, or upon application of a party to the proceeding, upon notice to all affected parties, based upon claims that such order was issued as a result of fraud, illegality or irregularity in a vital matter. The Cyclical Cases Unit processes MBR and Fuel Cost cases as well as challenges to both case types. The Owner Individual Unit processes rent control overcharge complaints, as well as owner individual filings for rent increases and recontrol cases. The Research and Analysis Unit provides data to the Nassau, Rockland and Westchester Rent Guidelines Boards and updates the Standard Adjustment Factor, Operation & Maintenance Certification, Fuel Cost Adjustment Factor and Labor Cost Adjustment Factor, as well as operational bulletins. Rent Information Bureau The Rent Information Bureau provides direct service to the public through a number of units. It has a centralized telephone Rent Info line and answers 8,800 calls monthly with a daily average of 400. The bureau maintains an info address, five New York City based Borough Rent Offices and a Westchester County District Rent Office that together assist 2,800 walk-in visitors per month. Staff provides application forms, printed information on owner and tenant rights as well as apartment and building rent registration information to owners and tenants. Staff also attends community and legislator sponsored meetings, answering questions and providing general information. Information to callers can be provided in multiple languages through a contracted vendor, Language Line. The bureau also contains several other support service units: The Records Access- FOIL/Subpoena Unit provides access to case files, orders and rent registration information. The Central Records Unit manages the filing, delivery, scanning and disposal of all case files. The Administrative Services Unit works with agency staff, distributing supplies, managing building repair issues and related financial reporting systems. The Staffing Management Unit works with Albany-based staff to coordinate personnel matters at ORA offices in Queens. The Forms Unit responds to all requests for the creation and modification of all forms and printed material and their placement on the website. The Bureau Chief is also responsible for the writing and dissemination of Opinion Letters, providing information to other government agencies, coordinating printed material in response to court decisions with the Office of Legal Affairs and for coordinating information and responses to media inquiries with the Public Information Office. NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 11

14 Changes to Rent Laws Over the Years In the past fifteen years there have been several major pieces of legislation enacted in New York State affecting New York s Rent Laws. Most recently, the Rent Act of 2011, which Governor Cuomo championed, focused on tenant protection and provided the greatest expansion and strengthening of Rent Laws in 40 years. This will be in effect until 2015 and includes the following changes: Raises the deregulation rent threshold from $2,000 to $2,500, making this the first increase in the rent threshold since It also raises the income threshold from $175,000 to $200,000, the first change in the income threshold since These changes will help ensure that almost 100,000 units stay in the rent regulatory system over the next few years and remain available for working-class New Yorkers. The Rent Act of 2011 will help ensure that almost 100,000 units will stay in the rent regulation system over the next few years and remain available for working-class New Yorkers. Allows landlords to collect only one vacancy increase per year, reducing the manipulation of leases in order to push units out of the system. Reduces the rent increase allowed for individual apartment improvements completed in buildings with more than 35 apartments to 1/60th of the cost of the improvement. Taken together, these changes represent a historic new direction for our rent laws, significantly leveling the playing field between the landlord and tenant. Prior to 2011, the Rent Regulation Reform Act of 1993, the Rent Regulation Reform Act of 1997 & 2000 Regulatory packet, 2003 preferential rent amendments, and 2005 Regulatory Amendments all worked together to weaken the rent laws for tenants. From 1994 to the present day, more than 238,000 apartments were removed from the rent regulation system. Rent Regulation Reform Act of 1993 Allowed the deregulation of any apartment with a legal rent of $2,000 or more per month that is occupied by tenants whose household income exceeded $250,000 over the two preceding years (High Rent/High Income Deregulation). For the first time, a tenant s income became relevant to the issue of rent regulation. Established high rent vacancy decontrol for apartments that become vacant with a legal rent of $2,000 or more per month. Established an amnesty and eliminated treble damages in overcharge actions for owners who filed late registrations. 12 NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration

15 The Rent Regulation Reform Act of 1997 & 2000 Regulatory Packet Established a four-year statute of limitations for rent stabilized overcharge complaints. Established a statutory vacancy rent increase (that an owner may collect upon renting to a new tenant). Reduced the income threshold for High Income/High Rent Deregulation from $250,000 to $175,000. Established a restriction on the amount of rent that a tenant could collect from a roommate Statute Codified and extended a 2001 ruling by the Appellate Division that permitted an owner who had been collecting a preferential rent (i.e., a rent less than the legal rent) to resume collecting the higher, legal rent in accordance with the terms of the lease that included a specific provision covering this issue even if the same tenant remained in occupancy Regulatory Amendment Implemented the 2003 statutory amendment on preferential rents to change the manner by which an owner can preserve the legal rent for future use by allowing a rent registration to substitute for a specific lease provision. NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 13

16 ORA Enhancements Under the leadership of Governor Cuomo, HCR helped renew and strengthen tenant protections and improve processes to better and more efficiently serve the public: Tenant Protection Unit Governor Cuomo created a new Tenant Protection Unit to proactively enforce landlord obligations to tenants and impose penalties for failure to comply with HCR orders and New York s rent regulatory laws. The Historic 2011 Expansion of the Rent Laws Raising the deregulation rent threshold from $2,000 to $2,500, making this the first increase in the rent threshold since Services Unit Eliminated time-consuming steps that delayed the issuance of orders concerning tenant complaints of decreased services. Services Unit - Code Red Unit As part of the change in the Services Unit is processing procedures, a sub-unit was created to process cases where the conditions alleged threaten health and safety and repairs are needed quickly. The unit now orders inspections during the period of time the owner has to answer the complaint, instead of waiting for the owner to respond. Expediting Fire/Vacate cases - Complaints by tenants that they have been forced to leave their apartments due to a fire or an order to vacate now receive expedited handling by the Code Red Unit. Orders reducing the rent to one dollar ($1.00) are issued reserving the tenants legal right to return to the apartment after the repairs are made. Enforcement - Compliance - Mediation ORA re-structured the Enforcement-Compliance unit so that civil penalties can be sought from owners who have violated the law and/or HCR orders. A formal administrative hearing is required where witnesses and evidence are brought before an Administrative Law Judge. New procedures were developed for the processing of cases before the Compliance Unit where the tenants indicate an owner has not made repairs ordered by HCR. Previous policy was to work with the owner to obtain compliance with the order by making repairs. The new policies retain the flexibility to work with the owners to have repairs made. However, an owner who has not made repairs or quickly settled the matter for a civil penalty (as well as a promise to make the repairs within a specified time), will now find his case referred to the Enforcement Unit for formal hearing and civil penalties of $1,000-$2,000. Inspections Unit All inspectors have been trained by HPD in HPD procedures.hcr inspectors also perform joint inspections with HPD, resulting in buildings that not only had violations listed by HPD, but based upon the inspection results, rent reduction orders were issued for cooperating tenants. ORA has implemented a policy of sending inspectors from outside a borough in order to ensure that a back log of inspections does not occur in any part of the City. Multi-Service Unit Members of this unit have been cross trained to process cases from the Services Unit and MCI unit as work allows. 14 NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration

17 Rent Infoline ORA revised the menu offered to those who call, so that they can now access a wide range of taped messages that address frequently asked questions. Office of Rent Administration - Recent Enhancements and Events Over 5,600 owners successfully filed online Fuel Cost Adjustment reports in New York City in the 2012 cycle. The 2012 Rent Registration filing period has commenced and all owners are being encouraged to transition to the use of this online filing system ARRO. Next year (2013), only electronic filings will be accepted. Tenants can report conditions that require emergency repair on the new online form Application for Decreased Services - Individual Apartment Emergency Conditions. HCR held an open-house in April at the renovated White Plains District Rent Office at which owners, tenants, civic groups and elected officials learned about the various services available to them. Borough Rent Offices Phone messages were standardized and contain more up to date and useful information and website references. The Westchester County Office has been modernized with new cubicles, phones and furniture. FOIL We have continued to provide more than 50% of our responses to FOIL requests using scanning and . Community Outreach Additional staff has been trained in public speaking and have participated in more then 70 community meetings since January 1, Cross Training Staff - Luxury Decontrol Unit In order to resolve a burdensome case load for the Luxury Decontrol Unit, staff members from various units in the Rent Control Bureau were cross trained to also process Luxury Decontrol cases. Online Complaint System Tenants can report conditions that require emergency repair on a new online form and complaints will be treated as first priority. Improving Outreach Providing more information in multiple languages The ORA Rent Info Line ( ) has been revised to offer clients a wide range of taped messages that address frequently asked questions. Callers who need to talk to an information agent can also utilize translation services provided in over 100 languages. Improving HCR s website HCR s website has been improved to make tenant protection information more prominent. A Tenant Protection page ( allows visitors to easily access information on rent histories, increases, overcharges, reductions, and lease renewals and we ve made it possible to translate any information on HCR s website into seven most-requested languages. NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 15

18 ORA is Here to Help Tenants and owners can visit HCR at nyshcr.org or call the Rent info line for information on: Tenants Accessing apartment rent history Limits on rent increases Overcharge refunds for rent stabilized tenants Rent reductions for failure to provide services Lease renewal options Owners Lawful charges for rent, MCI, air conditioners, and appliances Rent registration forms and building-wide rent rolls Maintaining services Additional Resources NYC DEPARTMENT OF BUILDINGS: NYC DEPARTMENT OF FINANCE NYC DEPARTMENT OF HOUSING PRESERVATION & DEVELOPMENT: NYC RENT GUIDELINES BOARD: Rent info line NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration

19 Borough and District Rent Offices The Borough and District Rent Offices provide information and assistance to tenants and owners of rent controlled and rent stabilized apartments. Tenants can request registered rent histories of their apartment as well as information about cases that may affect their rent. In addition, they can access Fact Sheets and forms on many topics including rent overcharges, leases, services and security deposits. Owners can request registered rent rolls for the building, case information and related copies of orders. They can also receive technical assistance in completing rent registration forms and applications pertaining to major capital improvements, rent restoration, and Rent Control- fuel and MBR reports. BRONX BOROUGH RENT OFFICE 2400 Halsey Street, 1st Floor Bronx, New York LOWER MANHATTAN BOROUGH RENT OFFICE 25 Beaver Street, 5th Floor New York, New York BROOKLYN BOROUGH RENT OFFICE 55 Hanson Place, Room 702 Brooklyn, New York UPPER MANHATTAN BOROUGH RENT OFFICE Adam Clayton Powell, Jr. State Office Building 163 West 125th Street, 5th Floor New York, New York BUFFALO RENT OFFICE 535 Washington Street, Suite 105 Buffalo, New York QUEENS BOROUGH RENT OFFICE Gertz Plaza Union Hall Street Jamaica, New York WESTCHESTER COUNTY RENT OFFICE 75 South Broadway, 3rd Floor White Plains, New York NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration 17

20 Glossary of Terms Emergency Tenant Protection Act of 1974 (ETPA) - This is the law that provides for rent stabilization in Nassau, Rockland and Westchester counties. For a building to be covered by ETPA, it must be located in a municipality that adopted the Emergency Tenant Protection Act. Fair Market Rent - The fair market rent is the rent charged the first stabilized tenant after the vacancy of a rent controlled tenant, subject to challenge in a Fair Market Rent Appeal. Fair Market Rent Appeal - A challenge to the first rent stabilized rent after rent control which must be filed within 90 days after the tenant receives the initial apartment registration. Fuel Cost Adjustment - A separate rent adjustment applied to rent controlled apartments only. This adjustment is based on fuel price changes during the prior year. The rent adjustment may go up or down depending on the price of various types of heating fuel. Harassment - A course of action intended to force a tenant out of his or her apartment or cause a tenant to give up rights granted to the tenant by the Rent Stabilization or Rent Control Laws. No owner, or owner s representative, may interfere with a tenant's privacy, comfort or quiet enjoyment of the tenant's apartment. Heat and Hot Water - By law owners must provide tenants with heat and hot water. Initial Apartment Registration - Registration that occurs when an apartment first becomes subject to the registration requirements of the rent stabilization law. A copy of the registration form must be served on the tenant. Luxury Decontrol - Apartments can become deregulated in one of two ways if the rent is over $2,500. The first way is if the apartment becomes vacant with such a rent. The second is upon application by the owner, where the tenant(s) in occupancy have an annual income in excess of $200,000 per year for the two prior calendar years. Major Capital Improvement (MCI) - An MCI is a building wide improvement which is for the operation, preservation and maintenance of the structure, directly or indirectly benefits all tenants, involves a capital expenditure which is deemed depreciable by the Internal Revenue Service and meets the requirements set forth in the Agency's useful life schedule. To be eligible to collect a rent increase for an MCI, an owner must first apply to HCR and obtain an order granting the rent increase. Maximum Base Rent (MBR) - A maximum base rent is established for each rent controlled apartment and is updated every two years to reflect changes in operating costs. Petition for Administrative Review (PAR) - An administrative appeal, filed by an owner or tenant, against an order issued by the Rent Administrator, which alleges errors in fact or application of the law. Rent Overcharge - A rent overcharge occurs when a tenant pays an amount of rent above the legal rent. Some allowable adjustments to a 18 NYSHCR 2012 ANNUAL REVIEW Office of Rent Administration legal rent occur when a Major Capital Improvement is approved, upon the renewal of a lease, or if an owner adds equipment or services with the tenant s consent. Rent Reduction - If an owner is not providing all required services, a tenant may file a complaint with HCR seeking to have the services restored. If the Agency determines that the services have not been restored, the Agency will issue a service reduction order which may relate to an individual apartment or may be building-wide. In rent stabilized apartments the rent will be reduced by an amount equal to the most rent guideline increase. In rent controlled apartments, the rent is reduced by a specific dollar amount based on the nature of the condition or decrease in service. Rent Restoration - This is an application filed by the owner to restore rents that were reduced by a rent reduction order. It is filed after the services have been restored. If granted, the effective date in rent stabilization is based on the date of the owner s application; for rent controlled apartments, the effective date is prospective only from the first day of the month after the issuance of the order. Service - Both the Rent Control and Rent Stabilization Laws require that the owner continue to provide all services provided on the base date, (generally the date the apartment became subject to regulations), as well as any services which are required by law. Sublet Apartment - Rent stabilized apartments are rented pursuant to a lease between an owner and a tenant. Under certain circumstances, a tenant may enter into a sublease with a new tenant (called the subtenant) for the rental of the apartment. The owner has the right to charge the prime tenant a sublet allowance during the period of sublet if the sublet occurs during a renewal lease term. The prime tenant (tenant who holds the lease with the owner) may pass this allowance onto the subtenant. The prime tenant may also charge the subtenant an additional 10% for the use of furniture. An apartment which is sublet continues to be under the jurisdiction of the rent stabilization law. The subtenant is protected from overcharges by the prime tenant and may file an overcharge complaint against the prime tenant if he or she feels a rent in excess of a legal rent is being collected. Generally the subtenant may not file such a complaint against the owner. Substantial Rehabilitation - A major reconstruction of the building, taking place after January 1, 1974, wherein at least 75% of the building-wide and apartment systems have been completely replaced with new systems. Upon completion of such work an apartment is no longer subject to regulation and market rents can be charged. Succession - The ability of a tenant to pass on their regulated apartment to certain immediate family members. The family member may have the right to succeed to the tenancy provided the family member s primary residence has been with the tenant for two years or since the inception of the relationship. Treble Damages - Treble damages refers to a penalty of three times the dollar amount of an overcharge that is payable to the tenant. This penalty, imposed by an order of HCR, is assessed against an owner when he or she willfully collects any rent in excess of the legal regulated rent.

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22 ANDREW M. CUOMO Governor DARRYL C. TOWNS Commissioner/CEO 2012 Annual Review Office of Rent Administration