Header:
NEW YORK CODES, RULES AND REGULATIONS
TITLE 9. EXECUTIVE DEPARTMENT
SUBTITLE S. DIVISION OF HOUSING AND COMMUNITY RENEWAL
CHAPTER VII. EMERGENCY HOUSING RENT CONTROL
SUBCHAPTER D. RENT AND EVICTION REGULATIONS--NEW YORK CITY
PART 2202. ADJUST
Date:
08/31/2009
Document:
ยง 2202.4 Increased services or facilities, substantial rehabilitation, major capital or other improvements
Except with regard to an adjustment pursuant to paragraph (2) of subdivision (a) of this section, for which the approval of the administrator shall not be required, the administrator may grant an appropriate adjustment of a maximum rent where he finds that:
(a) (1) the landlord and tenant, by mutual voluntary written agreement, subject to the approval of the administrator, agree to a substantial increase in dwelling space or a change in the services, furniture, furnishings or equipment provided in the housing accommodation; or the tenant has accepted and is obtaining the benefit of increased services, furniture, furnishings or equipment;
(2) On or after July 7, 1993, the landlord and tenant may, by mutual voluntary written agreement, agree to a substantial increase in dwelling space or a change in the services, furniture, furnishings or equipment provided in the housing accommodation; or the tenant has accepted and is obtaining the benefit of increased services, furniture, furnishings or equipment. In such case, an adjustment of the maximum rent shall be available without the approval of the administrator, and shall be equal to 1/40th of the total cost incurred by the landlord in providing such modification or increase, including the cost of installation, but excluding finance charges. A landlord who is entitled to a rent adjustment pursuant to this paragraph, shall not be entitled to a further rent increase based upon the installation of similar equipment, or new furniture or furnishings within the useful life of such new equipment, or new furniture or furnishings. The landlord shall give written notice to the administrator of any such adjustment; or
(b) there has been, since March 1, 1959, an increase in the rental value of the housing accommodations as a result of a substantial rehabilitation of the building or housing accommodations therein which materially adds to the value of the property or appreciably prolongs its life, excluding ordinary repairs, maintenance and replacements; or
(c)(1) there has been a major capital improvement, including an installation, which must meet all of the following criteria:
(i) deemed depreciable under the Internal Revenue Code, other than for ordinary repairs; and
(ii) is for the operation, preservation, and maintenance of the structure; and
(iii) is an improvement to the building or to the building complex which inures directly or indirectly to the benefit of all tenants, and which includes the same work performed in all similar components of the building or building complex, unless the landlord can satisfactorily demonstrate to the administrator that certain of such similar components did not require improvement; and
(iv) the item being replaced meets the requirements set forth on the following Useful Life Schedule, except with the administrator's approval of a waiver, as set forth in subparagraph (v) of this paragraph.
USEFUL LIFE SCHEDULE FOR MAJOR CAPITAL IMPROVEMENTS
Replacement item or equipment Years-estimated life
(1) Boilers and burners
(a) Cast iron boiler .............. 35
(b) Package boiler .............. 25
(c) Steel boiler .............. 25
(d) Burners .............. 20
(2) Windows
(a) Aluminum .............. 20
(b) Wood .............. 25
(c) Steel .............. 25
(d) Storm .............. 20
(e) Vinyl .............. 15
(3) Roofs
(a) 2-Ply (asphalt) .............. 10
(b) 3-4 Ply (asphalt) .............. 15
(c) 5-Ply (asphalt) .............. 20
(d) Shingle .............. 20
(e) Single-ply rubber .............. 20
(f) Single-ply modified bitumen .............. 10
(g) Quarry tile .............. 20
(4) Pointing .............. 15
(5) Rewiring .............. 25
(6) Intercom system .............. 15
(7) Mailboxes .............. 25
(8) Plumbing/repiping
(a) Galvanized steel .............. 25
(b) TP copper .............. 30
(c) Brass cold water .............. 15
(d) Fixtures .............. 25
(9) Elevators
(a) Major upgrade .............. 25
(b) Controllers and selector .............. 25
(10) Doors
(a) Apartment entrance .............. 25
(b) Lobby/vestibule .............. 15
(11) Bathroom upgrading
(a) Toilets and valves .............. 20
(b) Bathroom and sinks .............. 20
(c) Vanity .............. 20
(12) Kitchen upgrading
(a) Metal/wood cabinets .............. 20
(b) Ranges ............. 20
(c) Refrigerators .............. 15
(d) Sinks .............. 20
(13) Water tanks
(a) Metal .............. 25
(b) Wood .............. 20
(14) Waste compactors .............. 10
(15) Air conditioners
(a) Individual units/sleeves .............. 10
(b) Central system .............. 15
(c) Branch circuitry fixtures .............. 15
(16) Aluminum siding .............. 25
Vinyl siding .............. 15
(17) Catwalk .............. 25
(18) Chimney
(a) Steel .............. 25
(b) Brick .............. 25
(19) Courtyards/walkways/driveways
(a) Cement .............. 15
(b) Asphalt .............. 10
(20) Fire escapes .............. 25
(21) Fuel oil tanks
(a) In vaults .............. 25
(b) Underground .............. 20
(22) Water heating units
(a) Hot water/central heating .............. 20
(b) Hot water heater (domestic) .............. 10
(23) Parapets
(a) Brick .............. 25
(24) Resurfacing exterior walls ............... 25
(25) Solar heating system ............... 25
(26) Structural steel ............... 25
(27) Television security ............... 10
For major capital improvements not listed above, the landlord must submit with the application evidence that the useful life of the item or equipment being replaced has expired.
(v)(a) A landlord who wishes to request a waiver of the useful life requirement set forth in subparagraph (iv) of this paragraph (1) must apply to the administrator for such waiver prior to commencement of the work for which he or she will be seeking a major capital improvement rent increase. Notwithstanding this requirement, where the waiver is requested for an item being replaced because of an emergency, which causes the building or any part thereof to be dangerous to human life and safety or detrimental to health, a landlord may apply to the administrator for such waiver at the time he or she submits the major capital improvement rent increase application.
(b) If waiver is denied, the landlord will not be eligible for an MCI increase. If it is granted, the useful life requirement will not be a factor in the determination of eligibility for the major capital improvement rent increase. However, approval of the waiver does not assure that the application will be granted, as all other requirements set forth in this paragraph must be met.
(c) A landlord may apply for, and the administrator may grant, a waiver of the useful life requirements set forth in the Useful Life Schedule, if the landlord satisfactorily demonstrates the existence of one or more of the following circumstances:
(1) the item or equipment cannot be repaired and must be replaced during its useful life because of a fire, vandalism or other emergency, or "act of God" resulting in an emergency;
(2) the item or equipment needs to be replaced because such item or equipment is beyond repair, or spare parts are no longer available, or required repairs would cost more than 75 percent of the cost of the total replacement of the item or equipment. Certification by a duly licensed engineer or architect, where there is no common ownership or other financial interest with the landlord, shall be considered substantial proof of such condition(s). The landlord may also be required to submit proof that the item or equipment was properly maintained. Such proof may include receipts for repairs and parts or maintenance logs;
(3)(i) an appropriate New York State or local governmental agency has determined that the item or equipment needs to be replaced as part of a government housing program;
(ii) for the landlord to qualify for a New York State or local government long-term loan or insured loan, the governmental lender or insurer requires the remaining useful life of the building or building complex, as well as the component parts of such building or building complex, to be as great as or greater than the term of the loan agreement.
(4) the replacement of an item or equipment which has proven inadequate, through no fault of the landlord, is necessary, provided that there has been no major capital improvement increase for that item or equipment being replaced.
(d) In the event that the administrator determines that an installation qualifies for a waiver of the useful life requirements, the administrator may:
(1) where no previous increase was granted within the useful life of the item or equipment being replaced and the cost of repair would equal or exceed the cost of replacement, approve 100 percent of the substantiated cost of the item or equipment, including installation;
(2) where no previous increase was granted within the useful life of the item or equipment being replaced and the cost of repair is more than 75 percent of the cost of replacement, grant a prorated increase based upon the remaining useful life;
(3) where it is determined that an item is eligible to be replaced during its useful life, grant an increase based upon the difference between the substantiated cost of the item or equipment, including installation, and
(i) the amount reimbursed from other sources, such as insurance proceeds or any other form of commercial guarantee, and
(ii) the amount of any increase previously granted for the same item or equipment either as a major capital improvement, or pursuant to other governmental programs, if such item or equipment has not exhausted at least 75 percent of its useful life at the time of the installation;
(4) where it is determined that an item is eligible to be replaced even though it has not exhausted 75 percent of its useful life and that it was installed as part of a substantial rehabilitation or the new construction of a building for which the landlord set initial building-wide rents, the administrator may reduce the increase granted for a major capital improvement by a proportion of the remaining useful life of such item or equipment.
(e) Notwithstanding the provisions of clause (d) of this subparagraph, where a landlord had substantially commenced work on the major capital improvement installation before the adoption of the Useful Life Schedule, based on prior administrators' decisions and policies, and where adherence to useful life requirements or to the conditions of the waiver would create an undue hardship, the landlord's application will be determined in accordance with those prior decisions and policies.
(2) There has been an increase in services or improvement, other than repairs, on a building-wide basis, which the landlord can demonstrate are necessary in order to comply with a specific requirement of law.
(3) Improvements or installations for which the administrator may grant applications for rent increases based upon major capital improvements pursuant to paragraph (1) of this subdivision are described on the following Schedule. Other improvements or installations that are not included may also qualify, where all requirements of paragraph (1) of this subdivision have been met. SCHEDULE OF MAJOR CAPITAL IMPROVEMENTS
1. AIR CONDITIONER:
- new central system; or individual units set in sleeves in the exterior wall of every housing accommodation; or, air conditioning circuits and outlets in each living room and/or bedroom (SEE REWIRING).
2. ALUMINUM SIDING:
- installed in a uniform manner on all exposed sides of the building (SEE RESURFACING).
3. BATHROOM MODERNIZATION:
- complete renovation including new sinks, toilets, bathtubs, and/or showers and all required trims in every housing accommodation; or any individual component or fixture if done building-wide.
4. BOILER AND/OR BURNER:
- new unit(s) including electrical work and additional components needed for the installation.
5. BOILER ROOM:
- new room where none existed before; or enlargement of existing one to accommodate new boiler.
6. CATWALK:
- complete replacement.
7. CHIMNEY:
- complete replacement, or new one where none existed before, including additional components needed for the installation.
8. COURTYARD, DRIVEWAYS AND WALKWAYS:
- resurfacing of entire original area within the property lines of the premises.
9. DOORS:
- new lobby front entrance and/or vestibule doors; or entrance to every housing accommodation, or fireproof doors for public hallways, basement, boiler room and roof bulkhead.
10. ELEVATOR UPGRADING:
- including new controllers and selectors; or new electronic dispatch overlay system; or new elevator where none existed before, including additional components needed for the installation.
11. FIRE ESCAPES:
- complete new replacement including new landings.
12. GAS HEATING UNITS:
- new individual units with connecting pipes to every housing accommodation.
13. HOT WATER HEATER:
- new unit for central heating system.
14. INCINERATOR UPGRADING:
- including a new scrubber.
15. INTERCOM SYSTEM:
- new replacement; or one where none existed before, with automatic door locks and pushbutton speakerbox and/or telephone communication, including security locks on all entrances to the building.
16. KITCHEN MODERNIZATION:
- complete renovation including new sinks, counter tops and cabinets in every housing accommodation or any individual component or fixture if done building-wide.
17. MAILBOXES:
- new replacements and relocated from outer vestibule to an area behind locked doors to increase security.
18. PARAPET:
- complete replacement.
19. POINTING AND WATERPROOFING:
- as necessary on exposed sides of the building.
20. REPIPING:
- new hot and/or cold water risers, returns, and branches to fixtures in every housing accommodation, including shower bodies, and/or new hot and/or new cold water overhead mains, with all necessary valves in basement.
21. RESURFACING OF EXTERIOR WALLS:
- consisting of brick or masonry facing on entire area of all exposed sides of the building.
22. REWIRING:
- new copper risers and feeders extending from property box in basement to every housing accommodation; must be of sufficient capacity (220 volts) to accommodate the installation of air conditioner circuits in living room and/or bedroom.
23. ROOF:
- complete replacement or roof cap on existing roof installed after thorough scraping and leveling as necessary.
24. SOLAR HEATING SYSTEM:
- new central system, including additional components needed for the system.
25. STRUCTURAL STEEL:
- complete new replacement of all beams including footing and foundation.
26. TELEVISION SYSTEM:
- new security monitoring system including additional components needed for the system.
27. WASTE COMPACTOR:
- new installation(s) serving entire building.
28. WASTE COMPACTOR ROOM:
- new room where none existed before.
29. WATER SPRINKLER SYSTEM (FOR FIRE CONTROL PURPOSES):
- new installation(s).
30. WATER TANK:
- new installation(s) serving entire building.
31. WINDOWS:
- new framed windows.
(4)(i) An increase in the monthly maximum rent pursuant to paragraph (1) of this subdivision shall be 1/84th of the total cost of the approved items in the application.
(ii) the determination of the appropriate adjustment of a maximum rent shall take into consideration all factors bearing on the equities involved, subject to the general limitation that the adjustment can be put into effect without dislocation and hardship inconsistent with the purposes of the act, and including as a factor a return of the actual cost to the landlord, exclusive of interest or other carrying charges, and the increase in the rental value of the housing accommodations.
(iii) No increase pursuant to paragraph (1) of this subdivision shall be granted within the useful life of an improvement or installation for which an increase was previously granted except with the administrator's approval for required improvements.
(iv) no increase pursuant to paragraph (1) of this subdivision shall be collectible from a tenant to whom there has been issued a currently valid senior citizen rent increase exemption pursuant to local law or ordinance to the extent that such increase may cause the maximum rent of the housing accommodation to exceed a specified portion, if any, pursuant to such local law or ordinance, of the aggregate disposable income of all members of the household residing in the housing accommodation.
(v) The collection of any increase in the maximum rent pursuant to subdivisions (b), (c) and (e) of this section shall not exceed fifteen percent in any year from the effective date of the order granting the increase over the rent set forth in the schedule of gross rents with collectibility of any dollar excess above said sum to be spread forward in similar increments and added to the maximum rent as established or set in future years. In no event shall more than one fifteen-percent increase in the maximum rent be collected in the same year.
(vi) No increase pursuant to subdivisions (b), (c), (d) and (e) of this section shall be granted unless an application is filed no later than two years after the completion of the installation or improvement unless the applicant can demonstrate that the application could not be made within two years due to delay, beyond the applicant's control, in obtaining required governmental approvals for which the applicant has applied within such two-year period.
(5) The administrator shall determine the dollar amount of the monthly rent adjustment pursuant to paragraphs (1) and (4) of this subdivision. Such dollar amount shall be divided by the total number of rooms in the building. The amount so derived shall then be added to the rent chargeable to each housing accommodation in accordance with the number of rooms contained in such housing accommodation. When determining the adjustment of maximum rents pursuant to paragraph (1) of this subdivision, where the subject building contains commercial rental space in addition to residential rental space, and the administrator determines that the commercial space benefits from the improvement, the administrator shall allocate the approved costs between such commercial rental space and the residential rental space based upon the relative square feet of each rental area.
(6) Where during the processing of a rent increase application filed pursuant to paragraph (1) of this subdivision, tenants interpose answers complaining of defective operation of the major capital improvement, the complaint may be resolved in the following manner:
(i) Where "sign-offs" of a city, town or village (other than building permits) are required for the approval of the installation, and the tenants' complaints relate to the subject matter of the sign-off, the complaints may be resolved on the basis of the sign-off, and the tenants referred to the approving governmental agency for whatever action such agency may deem appropriate.
(ii) Where sign-offs of a city, town or village are not required, or where the alleged defective operation of the major capital improvement does not relate to the subject matter of the sign-off, the complaint may be resolved by the affidavit of an independent licensed architect or engineer that the condition complained of was investigated and found not to have existed, or if found to have existed, was corrected. Such affidavit, which shall be served by the administrator on the tenants, will raise a rebuttable presumption that the major capital improvement is properly operative. Tenants may rebut this presumption only on the basis of persuasive evidence, for example, a counter affidavit by an independent licensed architect or engineer, or an affirmation by 51 percent of the complaining tenants. Except for good cause shown, failure to rebut the presumption within 30 days will result in the issuance of an order without any further physical inspection of the premises by the administrator.
(iii) General requirements. There must be no common ownership, or other financial interest, between such architect or engineer and the owner or tenants. The affidavit shall state that there is no such relationship or other financial interest. The affidavit must also contain a statement that the architect or engineer did not engage in the performance of any work, other than the investigation, relating to the conditions that are the subject of the affidavit. The affidavit submitted must contain the original signature and professional stamp of the architect or engineer, not a copy. DHCR may conduct follow-up inspections randomly to ensure that the affidavits accurately indicate the condition of the premises. Any person or party who submits a false statement shall be subject to all penalties provided by law.
(d) there has been, since March 1, 1959, in structures containing more than four housing accommodations, other improvements made with the express consent of the tenants in occupancy of at least 75 percent of the housing accommodations; provided, however, that whenever the administrator has determined that the improvements proposed are part of a plan designed for overall improvement of the premises or increases in services, the administrator may order increases in maximum rents for all housing accommodations affected upon the express consent of the tenants in occupancy of at least 51 percent of the housing accommodations; and provided further, however, that no adjustment granted under this paragraph shall exceed 15 percent unless the tenants have agreed to a higher percentage of increase, as herein provided; and
(e) the landlord has incurred, since January 1, 1970, in connection with and in addition to a concurrent major capital improvement, other expenditures to improve, restore or preserve the quality of the structure. An adjustment pursuant to this section shall be granted by the administrator only if such improvements represent an expenditure equal to at least 10 percent of the total operating and maintenance expenses for the most recent full calendar year or the landlord's most recent fiscal year, or any 12 consecutive months ending not more than 90 days prior to the filing of the application for an increase pursuant to this subdivision. The adjustment pursuant to this subdivision shall be in addition to any adjustment granted for the concurrent major capital improvement, and shall be in an amount sufficient to amortize the cost of the improvements pursuant to this subdivision over a seven-year period.
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