DHCR Issues Updated Rider Required for All Rent-Stabilized Leases

The DHCR recently issued a new lease rider, and similar addenda for those rental properties outside of New York City, that must be attached to all vacancy and renewal leases for rent-stabilized apartments. The new rider has multiple sections, but only the first two sections must be filled out by the owner. If the lease is a vacancy lease, both section one and two must be filled out; if it’s a renewal lease, only section two should be filled out. Section one provides the tenant with a comprehensive breakdown of all the factors that go into calculating the rent including the individual apartment improvements. If an owner doesn’t include the rider with vacancy and renewal, then he or she may be subject to serious fines or other sanctions by the DHCR.

Typically, rent-stabilized apartments are those apartments in buildings with six or more units. Pursuant to DHCR regulations, owners who own rent-stabilized units cannot charge rents above the legal rent on file with the DHCR and may not increase rents beyond the amount established annually by local rent guideline boards. Landlords may increase legal rents in several ways. The most common ways are when a vacancy occurs or when a lease renewal is provided to the tenant.

The rider form’s title, “New York City Lease Rider for Rent Stabilized Tenants,” appears at the top of the front page, and “RA-LR1 (2/18)” appears in the lower left-hand corner. The rider can be found at the following link: http://www.nyshcr.org/Forms/Rent/ralr1.pdf. The addenda for rent-stabilized apartments in Westchester County is entitled, “Emergency Tenant Protection Act (ETPA) STANDARD LEASE ADDENDA for Rent Stabilized Tenants,” and “RA-LR1 (ETPA) (2/18),” and it can be found at http://www.nyshcr.org/Forms/Rent/ralr1-ETPA.pdf.

Required Elements of Lease Rider

These documents describe the rights and obligations of tenants and owners under the rent laws and regulations. They inform rent-stabilized tenants signing a vacancy lease of the legal regulated rent in effect immediately prior to the vacancy, and explain how the present rent was computed. They also contain provisions that are required by the Rent Code Amendments of 2014 (RCA 2014), which are embodied in the New York City Rent Stabilization Code (RSC) and the Tenant Protection Regulations (TPR).

Owners must include a copy of a New York City Lease Rider or an ETPA Standard Lease Addenda with a tenant’s vacancy lease and all renewal leases, personally or by mail, and they must include the following elements:

• The identity of the subject address and apartment.
• The signature of the tenant and owner, to be affixed at the offering and execution of the lease, respectively.
• Information on the rent paid by the previous tenant and a detailed summary of Individual Apartment Improvements (IAI) and related costs and rent increases as well as vacancy and longevity allowances that enable a tenant to understand how the new legal regulated rent for the apartment was calculated. This section also includes a notification to the tenant of his or her right to request from the owner detailed IAI supporting documentation (invoices, cancelled checks, etc.) at the time the lease is being offered or within 60 days after it is executed, by certified mail. The owner must provide such documentation within 30 days of that request by certified mail or in person with a signed acknowledgement of receipt.
• A description of rights and duties of owners and tenants under the Rent Stabilization Law, RSC, TPR, and other laws including information on Preferential Rents, Air Conditioner Surcharges, High Rent Vacancy Deregulation, and IAI notification requirements.

A tenant who isn’t served with a copy of the rider or addenda when signing a vacancy or renewal lease may file form RA-90/RA-90 ETPA “Tenant’s Complaint of Owner’s Failure to Renew Lease and/or Failure to Furnish a Copy of a Signed Lease.” The failure to properly serve the rider or addenda or provide information as required may result in the complaint being treated as a specific overcharge complaint. The DHCR may issue an order directing a refund of any payment inappropriately made plus all penalties otherwise due in an overcharge proceeding.

Revised Provisions

Section 3 of the lease rider covers informational provisions for owners and tenants to understand their basic rights and responsibilities under the Rent Stabilization Law. The most recent update adds a fair housing reminder for owners and highlights lawful and unlawful fees that may be charged to tenants.

Immigration status. The lease rider currently reminds owners that it is illegal to require a rent-stabilized tenant to provide immigration status information or a Social Security number as a condition to renewing the lease. The federal Fair Housing Act and New York State Human Rights Law make it illegal for an owner or an owner’s agent to discriminate against tenants on the basis of certain protected characteristics, such as race, creed, color, disability, national origin, sexual orientation, military status, age, sex, marital status, or familial status (the presence of minor children in the household). Further, certain local laws, such as the New York City Human Rights Law, also make it illegal to discriminate against tenants on the basis of their alienage or citizenship status.

Allowed fees. The lease rider provisions lists certain fees that owners may charge tenants separate and apart from the rent for the apartment. However, fees of any kind do not become part of the legal rent or preferential rent and cannot be added to it for the purpose of calculating lease renewal increases. Lawful fees include:

• Late fees where a clause in the initial vacancy lease allows for them to be charged by a certain specific date and the late fees are no more than 5 percent of the monthly rent currently being charged and collected. Preferential rents, which may also be referred to as “on-time rent,” that are conditioned on prompt payment of rent or terminate upon late payment of rent are not allowed;
• Legal fees can be collected only if ordered by a judge in court;
• Reasonable fees for a background check when applying to be a tenant;
• Fees for screening a prospective subtenant (background check, credit check, employment verification) may be charged to the tenant in occupancy requesting a sublet;
• Fees for window guards ($10 per guard) are detailed in DHCR Fact Sheet # 25;
• Fees for smoke alarms, carbon monoxide detectors, and natural gas detectors are established by the local municipality;
• Actual fees/charges incurred for insufficient funds for a tenant’s rent check that did not clear (bounced checks), if this was provided for in the initial lease;
• Fees imposed by the NYC agency such as HPD or HDC that has oversight authority pursuant to a regulatory agreement;
• Fees for air conditioners and tenant-installed washing machines, dryers, and dishwashers are detailed in DHCR’s Operational Bulletin 84-4 and DHCR Operational Bulletin 2005-1; and
• Fees for sub-metering or other utility services. Fees for sub-metering are detailed in DHCR Operational Bulletin 2014-1.

Unlawful fees. The provisions of the lease rider also list examples of unlawful fees. These include:

• Fees for background checks on rent-stabilized tenants in occupancy;
• Fees cannot be charged to the tenant for a background check on a prospective roommate or additional family member;
• Pet security deposit or other fees proposed for a service animal are in violation of fair housing law;
• Fees for owner-installed air conditioner brackets are prohibited;
• Fees including but not limited to damage fees, repair fees of any kind including those incurred for removal of municipal violations, painting fees, cleaning fees, and other fees not established by or in excess of the amount allowed by the rent regulations or other municipal regulations are prohibited. Please note that the inappropriateness of imposing these fees through the lease may not necessarily prevent an owner from independently seeking other relief in court for objectionable conduct or damages; and
• The $10 fee that must be paid by owners to the municipality for each stabilized apartment cannot be passed along as a fee to the tenant.