Use Revised DHCR Forms for Vacancy and Renewal Leases

By Eileen O'Toole, Esq.

To implement the January 2014 amendments to the Rent Stabilization Code, the Division of Housing and Community Renewal (DHCR) has issued revised versions of its rent-stabilized Renewal Lease Form, as well as the New York City Lease Rider for Rent-Stabilized Tenants and the High Rent Vacancy Deregulation Notice. The new Lease Rider must be added to both vacancy and renewal leases.

Renewal Lease Form

The DHCR’s revised Renewal Lease Form (DHCR Form RTP-8, issued 9/14) must be used for leases offered or executed on or after Oct. 1, 2014. The revised Renewal Lease Form is very similar to the previous form but now includes a sprinkler system notification required by Real Property Law Section 231-a (see “Put Required Sprinkler System Notice in All Residential Leases”). The instructions attached to the Renewal Lease Form also have been revised. The Renewal Lease Form need only be offered and executed in English, and the New York City Lease Rider must be attached to the Renewal Lease Form.

The Renewal Lease Form can be found at the DHCR’s website, at www.nyshcr.org/Forms.

NYC Lease Rider for Rent-Stabilized Tenants

Effective Oct. 1, 2014, an owner must include a copy of the revised New York City Lease Rider for Rent-Stabilized Apartments (DHCR Form RA-LR1, issued 7/14) with each vacancy or renewal lease offered to rent-stabilized tenants. The Lease Rider describes the rights and obligations of tenants and owners, sets forth how the rent was computed, and states that any increases charged comply with the Rent Stabilization Law and Code. The Lease Rider reflects changes made by the DHCR in January 2014 to Rent Stabilization Code Sections 2522.5(c)(1) and 2522.5(c)(3).

The Lease Rider replaces the DHCR’s prior version of a rent-stabilized lease rider and must contain:

• The address of the apartment that is the subject of the lease or renewal lease;
• The signatures of the tenant and owner;
• Detailed information on the rent paid by the previous tenant, and a breakdown of any Individual Apartment Improvements (IAIs) with costs, as well as vacancy and longevity allowances applied to the prior rent so that a tenant can see how the new legal regulated rent was calculated;
• A notification to the tenant of his or her right to request from the owner detailed IAI supporting documentation (such as invoices, canceled checks, etc.) at the time the lease is being offered or within 60 days after it is executed. The owner must provide the requested documentation by certified mail or in person, with a signed acknowledgement of receipt, within 30 days of receipt of the request; and
• A description of rights and duties of owners and tenants under the Rent Stabilization Law, Rent Stabilization Code, and other laws including information on preferential rents, air conditioner surcharges, high-rent vacancy deregulation, and IAI notification requirements.

If an owner doesn’t give a tenant a copy of the Lease Rider when the tenant signs a vacancy or renewal lease, the tenant may file a complaint on DHCR form RA-90, “Tenant’s Complaint of Owner’s Failure to Renew Lease and/or Failure to Furnish a Copy of a Signed Lease.” The DHCR may treat this complaint as a specific overcharge complaint and may issue an order directing a refund of any determined overpayment plus all penalties otherwise due in an overcharge proceeding.

Copies of the Lease Rider are available for informational purposes only in languages required by the DHCR’s language Access Plan, at www.nyshcr.org. However, the Lease Rider is required to be offered and executed only in English.

Here are highlights of the Lease Rider sections:

Section 1 of the Lease Rider sets forth a detailed “Vacancy Lease Rent Calculation.” This portion of the Rider must be filled in only when provided to new tenants with a vacancy lease.

Part A of Section 1 sets up the calculation of applicable statutory and Rent Guidelines Board vacancy increases, along with itemized IAI increases.

Part B of Section 1 advises tenants if the last prior tenant was rent controlled.

Part C of Section 1 advises tenants if the rent is an Initial or Restructured Rent under any government program.

Part D of Section 1 advises tenants of “Other” circumstances, such as where a market or “first” rent is being set for an individual apartment after the outer dimensions of the apartment have been substantially altered.

Section 2 of the Lease Rider must be completed for both vacancy and renewal leases. Unlike the DHCR’s prior rider, the Lease Rider now must be signed by both owner and tenant.

Section 3 of the Lease Rider is a lengthy summary of rules governing rent-stabilized tenancies.

     > Subsection 3(4)(A), a key provision on IAIs, explains in bold-face type that:

The Rent Code Amendments of 2014 require that the DHCR Lease Rider offered to vacancy lease tenants contain notification to the tenant of the right to request from the owner by certified mail Individual Apartment Improvements (IAI’s) supporting documentation at the time the lease is offered or within 60 days of the execution of the lease. The owner shall provide such documentation within 30 days of that request in person or by certified mail. A tenant who is not provided with that documentation upon demand may file form RA-90 “Tenant’s Complaint of Owner’s Failure to Renew Lease and/or Failure to Furnish a copy of a Signed Lease” to receive a DHCR Order that directs the furnishing of the IAI supporting documentation. (Refer to Rider Section 1, Individual Apartment Improvements.)

     > Subsection 3(8). This provision of the Lease Rider on services highlights that, under the amended Rent Stabilization Code, tenants should, but are not required to, give an owner written notification before filing a decrease in services complaint with the DHCR. The Lease Rider also advises tenants that prior written notification isn’t required for emergency conditions and states, in bold-face type, that “It is recommended that tenants use a separate DHCR form for any problematic conditions that are not on this emergency condition list.”

     > Subsection 3(11) highlights in bold-face type a provision of the amended Rent Stabilization Code on luxury deregulation. It states that “Owners cannot serve the Income Certification Forms and/or Petition for High Income Rent Deregulation on an apartment where the tenant is the recipient of a Senior Citizen Rent Increase Exemption (SCRIE) or a Disability Rent Increase Exemption (DRIE).”

     > Subsection 3(17). The Lease Rider also contains a notice provision at Subsection 3(17) to be used to advise tenants of any pending high-rent/high-income deregulation application:

Pursuant to Section 5-a of the Emergency Tenant Protection Act, or Section 26-504.3 of the Rent Stabilization Law, the owner has commenced a proceeding before DHCR for deregulation of your apartment by filing a Petition by Owner for High Income Rent Deregulation on ________________(Date), 20____.

This notice further advises tenants that a deregulation proceeding is pending and, if granted, the tenant’s renewal lease will be canceled and will terminate after 60 days from either the date of issuance of an order granting deregulation or a later order dismissing a tenant’s PAR.

For further information, see the following DHCR publications available at www.nyshcr.org/Rent/FactSheets:

• DHCR Fact Sheet #2: New York City Lease Rider and ETPA Standard Lease Addenda for Rent Stabilized Tenants
• DHCR Fact Sheet #4: Lease Renewal in Rent-Stabilized Apartments
• DHCR Fact Sheet #5: Vacancy Leases in Rent-Stabilized Apartments
• DHCR Operational Bulletin 2014-3: New York City Lease Rider and EPTA Standard Lease Addenda for Rent-Stabilized Tenants
• High Rent Vacancy Deregulation Notice (DHCR Form HRVD-N, issued4/14)

Editor’s Note: Outside New York City, a new “Standard Lease Addenda for Rent-Stabilized Tenants,” similar to the Lease Rider, has been issued by the DHCR for use with rent-stabilized leases.

Deregulation Notice

Owners also are required to provide to the first tenant to take occupancy after an apartment becomes deregulated or exempt from rent stabilization a “High Rent Vacancy Deregulation Notice” (the “Deregulation Notice”). Revised in April 2014 under the amended Rent Stabilization Code, the Deregulation Notice replaces a prior form issued by the DHCR for this purpose. Like the Lease Rider used for rent-stabilized tenants, the new version of the Deregulation Notice is expanded to include a detailed calculation of rent increases resulting in deregulation, along with information regarding the last regulated rent and the reason for deregulation. The Deregulation Notice also must advise tenants that the last legal regulated rent or maximum rent can be verified by contacting the DHCR.

The owner must deliver the Deregulation Notice to the first tenant of an apartment after the unit becomes exempt or deregulated from the rent laws either by certified mail within 30 days after the tenancy commenced or after the signing of the lease by both parties, whichever occurs first, or personally to the tenant at the signing of the lease.

In addition to the Deregulation Notice, the owner must send to the tenant and file with the DHCR either an initial apartment registration form (RR-1), if the deregulated tenant is the first tenant to move in after rent control, or an annual rent registration form showing that the apartment is now permanently exempt.

For further information, see DHCR Fact Sheet #36, High-Rent Vacancy Deregulation and High-Rent High-Income Deregulation, available at www.nyshcr.org/Rent/FactSheets/orafac36.pdf.

About the Author

Eileen O’Toole is a partner with the New York City law firm of Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., whose law practice concentrates on landlord-tenant matters. A frequent writer and lecturer on rent regulation and other real estate topics, she is also the Contributing Editor of New York Landlord v. Tenant, the Insider’s monthly legal decision service.

Ms. O’Toole is also Editor of the annual NYC Apartment Management Checklist, a one-stop resource for complying with the many laws and regulations affecting New York City apartment buildings.

Ms. O’Toole graduated from Boston University School of Law and served as Deputy Counsel to the Rent Stabilization Association of N.Y.C., Inc. before entering private practice. She has served as a member of the NYC Civil Court’s Housing Court Advisory Council, and as a lecturer at NYU’s Real Estate Institute.