What to Do if SCRIE Tenant Doesn’t Renew Eligibility for Benefits

The Senior Citizen Rent Increase Exemption (SCRIE, also known as the NYC Rent Freeze Program) freezes the rent for head-of-household seniors 62 and older who live in rent-regulated apartments. The NYC Department of Finance (DOF) administers SCRIE for rent-regulated (rent-stabilized and rent-controlled) apartments. In order to satisfy the income eligibility requirement, the senior’s household income must be $50,000 or less. And owners are given a property tax abatement credit applied to their property tax bill in the same amount as the increase that the tenant is exempted from paying.

Tenants who enter the city’s SCRIE program don’t automatically remain in the program. Rent-stabilized tenants must renew their eligibility for SCRIE benefits when they renew their leases, and rent-controlled tenants must renew their benefits at the start of the maximum base rent (MBR) cycle in January of every even-numbered year. At that time, the DOF will send them a renewal form that they must fill out and return.

A tenant who doesn’t renew his SCRIE eligibility can cause you headaches. For example, you must continue charging the tenant the lower SCRIE rent for six months. Then you will have to go after him for the difference between the SCRIE rent he’s been paying and the higher legal rent. Also, DOF won’t authorize your tax abatement until the tenant renews his SCRIE eligibility.

SCRIE Basics

To qualify for the SCRIE program, your tenant must:

• Be at least 62 years old;
• Be the head of household as the primary tenant named on the lease/rent order or have been granted succession rights in a rent-controlled, rent-stabilized, or a rent-regulated hotel apartment;
• Have a combined household income for all members of the household that is $50,000 or less; and
• Spend more than one-third of his monthly household income on rent.

Once tenants enter the SCRIE program, you can’t, with few exceptions, collect any further rent increases from them. Rents are usually frozen at the level they were when the tenant entered the SCRIE program. In exchange, the city reduces your property taxes by giving you a tax abatement. The abatement equals the rent increases you would have been entitled to collect from tenants if they weren’t exempt under the SCRIE program.

How to Learn Whether Tenant Didn’t Renew Eligibility

To renew SCRIE eligibility, tenants must file the renewal application that DOF sends them. DOF typically sends out these renewal forms two months before a tenant’s SCRIE eligibility is due to end. If a tenant doesn’t return the application to DOF within three months of getting it, the Department for the Aging (DFTA) will send him a reminder notice. At the same time, it will send you a notice that the tenant hasn’t renewed.

You can also check on the status of the tenant’s renewal application online where you can access weekly tenant reports for owners. These reports help you check the status of an application, benefit information, and any activity that has taken place relating to the SCRIE benefit. You must have the docket number to view the information. You can find these reports at http://www1.nyc.gov/site/finance/benefits/landlords-scrie.page or by logging on DOF’s Landlord Express Access Portal at http://www1.nyc.gov/site/finance/benefits/nycleap.page. After you log in, you will find a link to up-to-date lists of SCRIE tenants in your building as well as answers to Frequently Asked Questions (FAQs). The website also links you to applications that you can submit to update your address and adjust the tax abatement credits (TAC) for your SCRIE tenants.

To avoid confusion and hassles, as well as a delay in your tax abatement caused by SCRIE tenants who don’t promptly renew, it pays for you to remind SCRIE tenants to renew their benefits. For rent-stabilized tenants, you could remind them in the cover letter you send them with their renewal lease, reminding them that it’s time to renew their SCRIE benefits and advising them that you will raise their rents to the full legal maximum if they don’t. And for rent-controlled tenants, you could remind them in the cover letter you send them with their MBR forms.

When You Can Start Charging Higher Rent

SCRIE tenants get a six-month grace period in which to renew their eligibility. During the grace period, you must continue to charge the tenant the SCRIE rent. For rent-stabilized tenants, the grace period is the six months after the start date of their leases. For rent-controlled tenants, the grace period is the six months after the beginning of the MBR cycle. If a tenant doesn’t renew her eligibility within the grace period, you can start collecting the higher rent you would have been legally able to charge but for the tenant’s SCRIE status. And you can do so retroactive to the start date of the lease or the beginning of the MBR cycle.

Since the tenant will retroactively owe you the difference between the lower SCRIE rent he was paying and the higher rent you can charge, you will probably need to work out a repayment plan with the tenant to get the money owed. But before you seek repayment, you should get what’s called an “Order of Revocation” from DOF, confirming that it revoked the tenant’s SCRIE benefits.

For example, a rent-stabilized tenant getting SCRIE benefits signs a two-year renewal lease beginning June 1, 2017. DOF sends the tenant an application to renew her SCRIE benefits. The tenant doesn’t return the renewal application to DFTA by Sept. 1, 2017. DOF sends the tenant a reminder notice and notifies you that the tenant hasn’t renewed. If the tenant still hasn’t returned the renewal application by Dec. 1, 2017 (six months after the start date of her renewal lease), you can start charging the tenant the higher legal rent retroactive to June 1, 2017.