DHCR Issues Modified Renewal Lease Form

The DHCR has modified the NYC Renewal Lease Form (RTP-8) to incorporate the requirements of Rent Guidelines Board Order #52. With the latest order, the city’s Rent Guidelines Board froze rents for rent-stabilized tenants with one-year leases. For two-year renewal leases, a 1 percent increase is allowed during the second year. (See “RGB Issues Rent Freeze Amid Pandemic.”)

As the most recent DHCR Renewal Lease Form, this updated form should be used for all renewal leases going forward. You can find the form at https://hcr.ny.gov/system/files/documents/2020/06/rtp-8.pdf.

Lease Renewal Process

Generally, tenants in rent-stabilized apartments must be offered renewal leases. The renewal lease can be for a term of one or two years, at the tenant’s choice, and is at a rate set by the Rent Guidelines Board. The renewal lease offer must be made on a form created by or on a facsimile approved by the DHCR.

In New York City, the owner must give written notice of renewal by mail or personal delivery not more than 150 days and not less than 90 days before the existing lease expires on a DHCR Renewal Lease Form (RTP-8). After the renewal offer is made, the tenant has 60 days to choose a lease term, sign the lease, and return it to the owner. If the tenant doesn’t accept the renewal lease offer within this 60-day period, the owner may refuse to renew the lease and, if the tenant hasn’t moved out after the expiration of the current lease, may also proceed in court to have the tenant evicted.

When a tenant signs the renewal lease form and returns it to the owner, the owner must return the fully signed and dated copy to the tenant within 30 days. A renewal should go into effect on or after the date that it’s signed and returned to the tenant but no earlier than the expiration date of the current lease. In general, the lease and any rent increase may not begin retroactively.

Renewal leases must keep the same terms and conditions as the expiring lease unless a change is necessary to comply with a specific law or regulation. Also, when a tenant receives the Lease Renewal Form, a copy of the New York City Lease Rider For Rent Stabilized Tenants must be attached. The rider explains how the proposed rent was computed and describes the rights and obligations of tenants and owners under the Rent Stabilization Law.

Reasons for Not Renewing a Lease

An owner can refuse to renew a lease for several reasons, some of which are:

• Owner or a member of the owner’s immediate family needs the apartment for their personal use and primary residence. If the tenant is a senior citizen, or disabled, special rules apply;
• The apartment is not used as the tenant’s primary residence;
• The owner wants to take the apartment off the rental market, either to demolish the building for reconstruction or use it for other purposes permitted by law.

When the owner doesn’t offer the tenant a renewal lease for one of these reasons, however, the owner must give the tenant written notice of nonrenewal during the lease-offering time frame described above. Failure to serve this notice on the tenant during this time frame will entitle the tenant to a renewal lease.

Apply RGB Increases to Preferential Rents

A preferential rent is a rent that an owner agrees to charge that’s lower than the legal regulated rent that the owner could lawfully collect. As a result of the Housing Stability & Tenant Protection Act (HSTPA) of 2019, there are restrictions to preferential rent adjustments. Tenants who were paying a preferential rent as of June 14, 2019, retain the preferential rent for the life of the tenancy.

Owners who are collecting a preferential rent, upon renewal of the lease, can increase the legal and preferential rents by the lawful rate increases (such as Rent Guidelines Board increases and other increases allowed by the Rent Stabilization Law), but only collect an increase based on the preferential rent. The higher legal regulated rent and related increases can be collected only when the apartment is vacated and rented to a subsequent tenant.

Before HSTPA was enacted, owners had the option of charging a tenant a preferential rent. Under the prior law and rules, an owner could decide to terminate the preferential rent and charge the higher legal regulated rent when the tenant renewed the lease or when the tenant permanently vacated the unit, provided that the original written lease (the lease in which the preferential rent was first charged and all subsequent renewal leases thereafter) indicated the amount of the legal regulated rent and contained a clause stating how long the preferential rent would continue (such as for the term of the lease or the entire term of the tenancy).

If the original lease contained this language, then the owner had the option to raise the rent to the legal regulated rent at either the end of the lease term in a renewal lease or upon the permanent vacancy of the unit by the tenant. The timing of the option to terminate the preferential rent depended on the preferential lease language included in the original lease.