DHCR Increases Air Conditioner Rent Surcharge for 2020-21

The Division of Housing and Community Renewal (DHCR) recently announced an increase in this year’s air conditioner rent surcharge for owners who pay for electricity. It set the monthly surcharge at $25.31, up $0.37 from $24.94 last year. This year’s increase reflects a 1.48 percent increase in the price of electricity for electrical inclusion buildings as calculated by the Rent Guidelines Board’s 2020 Price Index of Operating Costs issued in April 2020.

The latest surcharges appear in the DHCR’s 35th annual update of Section B of Supplement No. 1 to Operational Bulletin 84–4. This year’s update tells you what you can collect in the period beginning on or after Oct. 1, 2020, through Sept. 30, 2021, for an air conditioner installed in a tenant’s apartment during this period. It also tells you how to adjust the rent surcharges you’re already collecting from a rent-stabilized tenant for an air conditioner installed on or after Oct. 1, 1985, through Sept. 30, 2020.

The annual update also stipulates that for cases in which a brand new air conditioner is purchased and installed by the owner with the rent-controlled or rent-stabilized tenant’s written consent to pay for it, one-one hundred and sixty eighth (1/168th) of the cost of the new air conditioner in buildings that contain 35 or fewer housing accommodations or one-one hundred and eightieth (1/180th) of the cost in buildings that contain more than 35 housing accommodations, including any cost of installation, but excluding finance charges, if any, may be included in the base rent. However, the recoverable costs incurred by the owner are subject to the limits imposed by the Housing Stability and Tenant Protection Act (HSTPA) of 2019 on rent increases for individual apartment improvements.

In the case of a rent-controlled apartment, the owner must notify the DHCR of the rent increase, and the increase will be effective as of the first rent payment date following such notification. In the case of a rent-stabilized apartment, while an owner may collect from a rent-stabilized tenant any of the charges for an air-conditioner without obtaining a DHCR order, HSTPA requires that the owner file the Supplemental Rent Registration IAI Notification form with the DHCR whether the apartment is occupied or vacant. Where the apartment is occupied, the owner must also obtain and file the tenant’s written informed consent on the Supplemental Rent Registration IAI Informed Consent form. And in the case of a rent-stabilized apartment, the information should also be included in the next annual rent registration statement, and the increase is effective on the first rent payment date following installation.

There’s no change in the $5 monthly surcharge you can collect when a rent-controlled or rent-stabilized tenant who pays for electricity installs an air conditioner that extends beyond the window line.

You can pick up a copy of the updated bulletin at your local borough rent office or download it from the DHCR’s website, www.nyshcr.org.

Key cutoff: Oct. 1, 1985. The update doesn’t apply to air conditioners installed before Oct. 1, 1985. If you’ve been collecting an authorized rent hike for an air conditioner installed before that date, you may continue to do so.

Use chart to calculate rent changes. We’ve prepared two charts, below, to help you figure rent surcharges and increases you’re entitled to and when you can start collecting them: Rent-Stabilized Apartments: Air-Conditioner Rent Surcharge Chart, and Rent-Controlled Apartments: Air-Conditioner Rent Surcharge Chart.

Note that the amount you’re entitled to collect from a tenant and when you can start collecting it depend on a variety of factors, including who pays for electricity, who installed the air conditioner, and when it was installed.

Notify rent-stabilized tenants about change in surcharge. When you send rent-stabilized tenants their first rent bill that includes the new $25.31 surcharge, it’s smart to include a brief letter telling them that the surcharge has been increased based on the DHCR’s most recent operational bulletin. This way, tenants won’t be confused about why the surcharge has changed. You can use the following language in your letter:

Model Language

As of Oct. 1, 2020, your air-conditioner surcharge has been increased from $24.94 per month to $25.31 per month. This increase was made in accordance with the 35th annual update of Section B of Supplement No. 1 to the Division of Housing and Community Renewal (DHCR) Operational Bulletin 84-4. The air-conditioner surcharge on your rent bill is adjusted annually by the DHCR, depending on the cost of electricity.