It is not too rare in a city where many people rent houses and apartments to come across a news article where a landlord is trying to evict a tenant from one of its apartments that is rent-controlled.[1] These articles typically offer a profile of the tenant, or the tenant’s successors, discuss how the tenant has lived in the apartment for decades, and here comes the landlord, attempting to evict him or her through various proceedings (or none at all). Tenants in rent-controlled apartments typically pay very low monthly rent while location places their market rental value at a much higher rate. Thus, it does not seem too difficult to infer why the landlords may be pursuing to evict rent-controlled tenants.
Several questions arise, viz., what is rent control? What are rent-controlled apartments? Is there a way for landlords of rent-controlled apartments to deregulate or decontrol them? Who administers the rent control system? In what instances may landlords pursue to evict tenants in rent-controlled apartments? This article offers a glimpse into the background of the rent control system in New York City and offers insight on some of the legal obligations, remedies and requirements.
New York’s rent control system originated in the 1940s, which makes it perhaps one of the oldest in the United States. It was put in place “to protect tenants in privately-owned buildings from illegal rent increases and allow owners to maintain their buildings and realize a reasonable profit.”[2] Due to the housing shortage immediately after World War II, the risk of wrongful rent increases was high and had to be brought under the government’s control. NYC’s Rent Control law is codified as part of its Administrative Code.[3] It is administered by the “Office of Rent Administration” which is under the New York State Division of Housing and Community Renewal (“DHCR”). Although the immediate aftermath of WWII is long over, the law continues to be in effect and enforced wherever applicable, although the number of rent-controlled apartments has since drastically decreased. Currently, they constitute approximately 2% of all NYC apartments.[4]
What type of apartments fall under the rent control system? The law applies to all “housing accommodations” as it is defined in Section 26-403(e).[5] Generally, it applies to buildings built before 1947.[6] Tenant had to have rented the apartment in question prior to July 1, 1971, and has to have lived there since, or the apartment has to be occupied by the tenant’s successor who is his or her immediate family member and who lived with the tenant for a continuous period of 2 years prior to the transfer of title.[7] Who are the “family members” that may qualify for such succession rights? The definition of a “family member” includes a spouse, son, daughter, stepchildren, father, mother, stepparents, brother, sister, grandparents, grandchildren, parents- and children-in-law.[8] The definition also includes “any other person(s) residing with the tenant or permanent tenant in the housing accommodation as a primary resident, who can prove emotional and financial commitment and interdependence between such person(s) and the tenant.”[9] There are various factors used to evaluate whether the latter relationship exists.[10]
One of the ways in which a housing accommodation may be decontrolled or deregulated is the high-income deregulation process. There are two important parts to it. One is to look at the “deregulation rent threshold” (“DRT”) or the amount of money that the tenant is paying in monthly rent. The other is to look at the “deregulation income threshold” (“DIT”) of the tenant. The DRT for proceedings commenced between January 1, 2017 and December 31, 2017 is $2,700 for NYC.[11] The DIT is $200,000 and has been the same since July 1, 2011.[12] When certain requirements are met, and the necessary steps are taken, the law provides landlords with a means to deregulate their apartment(s). What are these steps? If a landlord determines that the rent for a housing accommodation equals to or exceeds the DRT, he or she may provide the tenant with the “Income Certification Form” (“ICF”), which is prepared by DHCR.[13] A copy of the ICF may be found on DHCR’s website.[14] On this form, the tenant has to certify whether his or her total annual income exceeded the DIT for each of the prior two years.[15] The tenant has 30 days to return the completed ICF back to the landlord.[16] If the tenant fails to return the form, the landlord can go to DHCR and request that it verify whether the total annual income in fact exceeds the DIT.[17] (again, this is for each of the prior two years; the total annual income is determined by looking at the tenant’s State tax filings.[18]). In case that the tenant returns the ICF back to the landlord and the total annual income exceeds the DIT, the landlord can file the certification with DHCR, and then DHCR, within 30 days of such filing, must issue an order of deregulation.[19]
Can a landlord evict a tenant from a rent-controlled apartment? The answer is yes, but it is not a simple matter for the landlord to do so. Tenants in rent-controlled apartments are protected under the law, so if a landlord wants to evict someone from such apartment, he or she has to have a reason that falls under one of the categories outlined in the Rent Control law. It must be noted here that a tenant living in a rent-controlled apartment does not have to have a lease; that is, the fact that the tenant has or does not have a lease has no legal significance. This is the reason why such tenants are often referred to as “statutory” tenants. To answer the question posed in the beginning of this paragraph, while in some instances the landlord can go to court directly and commence a proceeding to evict a tenant(s) from its rent-controlled apartment, in others, the landlord has to first go to DHCR and obtain a certificate of eviction. Once he or she does that, the landlord can then commence a court proceeding for eviction. Thus, what are the instances where the landlord can seek eviction directly in court? And, what are the instances where the landlord has to first go to DHCR?
Some of the grounds based on which the landlord may commence eviction proceedings directly in court are as follows: the tenant is committing a nuisance, or maliciously and substantially damaging the apartment; occupancy of the apartment by the tenant is illegal and the landlord is subject to civil or criminal penalties because of that; the tenant is using the premises for illegal purpose(s); the tenant is unreasonably refusing the landlord to access the apartment to make the necessary repairs; and so forth.[20] As it is apartment, these are not “simple” grounds and therefore, it is typically very hard for a landlord to evict a tenant from such an apartment. It should be noted that a precondition to all of the above-listed grounds is that the tenant continues to pay the rent. If the tenant fails to pay the rent, then that could also be a basis to seek eviction.[21]
On the other hand, these are some of the grounds where the landlord has to first seek a certificate of eviction from DHCR, and once he or she obtains that, then go to court. One such ground, which is subject to a great deal of litigation, is where the landlord seeks, in good faith, to recover possession of the housing accommodation for his or her (or an immediate family member’s) personal use.[22] There are some exceptions to this, but it is one of the more frequently used routes by landlords. Landlords can also seek eviction for the “immediate purpose of substantially altering or remodeling…,” or demolishing the apartment.[23] If the basis is to demolish the building, the landlord must be planning to build a new building, and the current tenants must be relocated to another suitable housing accommodation.[24]
Readers should take note that DHCR has also promulgated regulations based on the Rent Control law, which provide further guidance and clarifications such as time limits, specific procedural steps, and many others. These regulations can be found under the Subtitle S of Title 9 of the New York Codes, Rules and Regulations.[25]
Important: This article is for information purposes only and provides a very general outline. None of its contents are intended to provide, nor should they be construed as, legal advice. If you think you need legal assistance, please consult with an attorney.
[1] Note: This article only focuses on Rent Control and does not discuss Rent Stabilization, which is a different form of rent regulation in New York.
[2] DHCR Fact Sheet # 1, p. 1.
[3] NYC Adm. Code, Title 26, Chapter 3.
[4] See https://www.nakedapartments.com/guides/nyc/renting-in-new-york-city/rent-regulation ; https://citylimits.org/2015/03/09/nycs-endangered-species-a-rent-controlled-apartment/.
[5] NY Admin. Code, Title 26, § 26-403(e).
[6] DHCR Fact Sheet # 1, p. 1.
[7] NY Admin. Code, Title 26, § 26-403(e)(1).
[8] DHCR Fact Sheet # 30, p. 2.
[9] Id.
[10] Id.
[11]http://www.nyshcr.org/Apps/RentReg/DeregulationRentandIncomeThreshold.pdf.
[12] Id.
[13] NY Admin. Code, Title 26, § 26-403.1(b).
[14] http://www.nyshcr.org/Forms/Rent/ra93CF.pdf.
[15] NY Admin. Code, Title 26, § 26-403.1(b).
[16] Id.
[17] NY Admin. Code, Title 26, § 26-403.1(c).
[18] NY Admin. Code, Title 26, § 26-403.1(a)(1).
[19] NY Admin. Code, Title 26, § 26-403.1(b).
[20] NY Admin. Code, Title 26, § 26-408(a).
[21] Id.
[22] NY Admin. Code, Title 26, § 26-408(b)(1).
[23] NY Admin. Code, Title 26, § 26-408(b)(3) & (4).
[24] NY Admin. Code, Title 26, § 26-408(b)(4).
[25] 9 NYCRR Subtitle S, Chapter VII.
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