N.Y. Comp. Codes R. & Regs. tit. 9 § 2502.5

Current through Register Vol. 46, No. 36, September 4, 2024

Section 2502.5 - Lease agreements

(a) Vacancy lease. Upon the renting of a vacant housing accommodation after the local effective date of the act, the landlord shall provide to the tenant and execute a valid written lease for a one- or two-year period at the tenant's option at a rent which may not exceed the legal regulated rent, provided further that for a housing accommodation subject to the Emergency Housing Rent Control Law which becomes vacant after the local effective date of the act, the lease shall not provide for any increase in said rent for a period of one year.

(b) Renewal lease. Upon the expiration of a prior lease or rental agreement, the tenant shall have the right of selecting at this option a renewal lease for a term of one or two years, except that where a mortgage or a mortgage commitment existing as of the local effective date of the act prohibits the granting of one-year lease terms, the tenant may not select a one-year lease.

(c)

(1) For housing accommodations subject to this act, an owner shall furnish to each tenant signing a vacancy or renewal lease, information in a form promulgated or approved by the division, as part of such lease, describing rights and duties of owners and tenants under the act including a detailed description of how the rent was adjusted from the prior legal rent. Such information shall conform to the "plain English" requirements of section 5-702 of the General Obligations Law and information regarding such rights and duties shall also be available in all languages that may be required pursuant to DHCR's language access plan.

(2) A vacancy lease shall provide that the tenant may, within 60 days of the execution, require the owner to provide the documentation directly to the tenant supporting the detailed description regarding the adjustment from the prior legal rent. The owner shall provide such documentation within 30 days of that request.

(3) The method of service of this lease information, the tenant request for documentation, and the owner's provision of documentation, together with proof of same, shall conform to the requirements set forth in the appropriate lease form or such bulletin or other document rendered pursuant to section 2507.11 of this Title.

(4) Where a tenant is not furnished, as required by the above provision, with a copy of the lease information pursuant to paragraph (1) of this subdivision or the documentation required on demand by paragraph (2) of this subdivision, the owner shall not be entitled to collect any adjustments in excess of the rent set forth in the prior lease unless the owner can establish that the rent collected was otherwise legal. In addition to issuing an order with respect to applicable overcharges, DHCR shall order the owner to furnish the information or documentation. The furnishing of the information or documentation by the owner to the tenant shall result in the elimination, prospectively, of such penalty.

(d) Limitations. The legal regulated rent established in a lease may only be adjusted as follows:

(1) For renewal leases, the legal regulated rent immediately prior to the effective date of the lease may be increased by the appropriate rate of rent adjustment as last filed with the division by the Rent Guidelines Board for the county wherein the housing accommodation is located and if the said rate has not been filed by the commencement date of the lease term, the lease may make provision for the rent increase, if any, pursuant to the said rate to become effective when filed as of the commencement date of the lease term, unless the County Rent Guidelines Board shall have fixed a later effective date for the said rate, in which event the increase may only be effective as of that later date;

(2) Where a renewal lease is entered into after the local effective date, but before the effective date of the first applicable guidelines as provided in section 4, subdivision b of the act, the lease may provide for an adjustment of rent pursuant to such guidelines, to be effective on the first day of the month next succeeding the effective date of such guidelines.

(3) Pursuant to an order of the division, where the vacancy lease recites that:

(i) an application for a rent increase pursuant to section 2502.4(a)(2)(i) or (b) of this Part is pending before the division;

(ii) a rent increase shall be payable in the amount authorized by the division in the event an application is filed pursuant to section 2502.4(a)(2)(i) of this Part, based upon work having been completed to comply with new or additional requirements of law;

(iii) a rent increase shall be payable in the amount, if any, authorized by the division in the event an application is filed to establish a hardship pursuant to section 2502.4(e) of this Part.

(4) [Reserved]

(5) Prior executed lease.

(i) Where a lease for a one-, two- or three-year term was executed before the local effective date and the term commences on or after the local effective date, the lease shall not be effective to increase the initial legal regulated rent, except that effective on the first day of the month next succeeding the date of filing of guidelines with the division by the Rent Guidelines Board for the county wherein the property is located, which guidelines are applicable to the class of housing accommodations within the building, the initial legal regulated rent may be increased to the lower of the following rents:

(a) the rent reserved in the lease; or

(b) the initial legal regulated rent increased by the applicable rate of rent adjustment for the lease term pursuant to the guidelines;

provided the landlord first serves on the tenant a written notice setting forth the new legal regulated rent and the method of computation thereof pursuant to this section.

(ii) Where a lease was executed before the local effective date for a term of one, two or three years commencing before the local effective date but providing for one or more rent increases to commence on or after the local effective date, no such increases shall be effective to increase the initial legal regulated rent, except that effective on or after the first day of the month next succeeding the date of filing of the guidelines with the division by the Rent Guidelines Board for the county wherein the property is located, which guidelines are applicable to the class of housing accommodations within the building, the initial legal regulated rent may then be increased commencing on the date or dates provided for in the lease or on the first of the month next succeeding the date of filing of the guidelines, whichever is the later date, to the lower of the following rents:

(a) the rent in the increased amount provided for in the lease; or

(b) the initial legal regulated rent increased by the applicable rate of rent adjustment for the lease term pursuant to the guidelines;

provided the landlord first serves on the tenant a written notice setting forth the new legal regulated rent and the method of computation thereof pursuant to this section.

(6) Same terms and conditions.

The lease provided to the tenant by the owner pursuant to both paragraphs (1) and (2) of this subdivision shall be on the same terms and conditions as the last lease prior to the local effective date, except where the owner can demonstrate that a change is required or authorized by a law applicable to the building or to leases for housing accommodations subject to the act, or with the approval of the DHCR. Where there was no prior lease for the housing accommodations, the lease shall be on the same terms and conditions as the last leases for the other housing accommodations in the building subject to the act, and shall otherwise provide for the maintenance by the owner of all services and facilities required by the laws applicable to the building and housing accommodations. Notwithstanding the foregoing, the tenant shall have the right to have their spouse or domestic partner added to the lease or any renewal thereof as an additional tenant where said spouse or domestic partner resides in the housing accommodation as their primary residence.

(7) Delivery of lease to tenant. Each owner shall furnish, to each tenant signing a new or renewal lease, a copy of the fully executed new or renewal lease bearing the signature of owner and tenant and the beginning and ending dates of the lease term, within 30 days from the owner's receipt of the new or renewal lease signed by the tenant. The failure to do so will result in the noncollectibility of the guidelines increase otherwise authorized for such lease, until the first rent payment date following the receipt by the tenant of the fully executed lease. For renewal of leases, use of the form prescribed under section 2503.5(a) of this Title shall be deemed as compliance herewith.

(8) Leases for housing accommodations in cooperative or condominium-owned buildings or in a building for which the Attorney General has accepted for filing an offering plan to convert the building to cooperative or condominium ownership. New or renewal leases may contain a clause permitting termination prior to the expiration of the term by a subsequent owner who has purchased the shares allocated to the rented apartment or purchased the rented apartment, if such clause provides:

(i) that the termination clause shall only be effective for the purpose of permitting the rented apartment, following surrender of possession by the tenant, to be occupied immediately by such owner under the cooperative or condominium building ownership, or by a member of that owner's immediate family as defined in the tenant protection regulations;

(ii) that such owner must serve on the tenant a notice in writing by certified mail no less than 90 days prior to the date of termination of the lease, reciting the date of termination and the full name and address of the owner or the member of the owner' s immediate family who is to take occupancy of the rented apartment, and his or her relationship to the owner; an exact copy of such notice must also be filed with an affidavit of service with the division within seven days after such service;

(iii) that such increase, if any, in the legal regulated rent collected under the lease pursuant to the applicable County Rent Guidelines Board rate must be refunded by the owner to the tenant on or before the date of surrender of possession, to the following extent:

(a) where a one-year lease is so terminated prior to the expiration of the one-year term, the rent increase must be fully refunded;

(b) where a two-year lease is so terminated prior to the expiration of one year, the rent increase must be fully refunded; if one year or more has expired, such amount of the rent increase as exceeded the one-year lease guideline rate must be refunded;

(c) where a three-year lease is so terminated prior to the expiration of one year, the rent increase must be fully refunded; if one year but less than two years has expired, such amount of the rent increase as exceeded the one-year lease guideline rate must be refunded; if two years or more have expired, such amount of the rent increase as exceeded the two-year lease guideline rate must be refunded.

(iv) Where the rented apartment is located in a city, town or village which has filed a resolution with the Attorney General electing to have section 352-eee of the General Business Law apply to cooperative and condominium conversion plans, and the plan has been declared effective in accordance with its terms and the requirements of such section 352-eee:

(a) that the plan for conversion to cooperative or condominium ownership is an "eviction plan" as defined in section 352-eee;

(b) that no eviction proceedings shall be commenced against the tenant for a period of three years after the plan has been declared effective;

(c) that the termination clause shall not apply if the tenant is an "eligible senior citizen" or an "eligible handicapped person" as defined in such section 352-eee.

(e) Escalator clauses. Regardless of whether an escalator clause was contained in the last effective lease or other rental agreement prior to the local effective date of the act, no renewal lease or vacancy lease becoming effective on or after the local effective date shall provide for any escalator clause except as authorized in paragraph (c)(2) of this section.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 2502.5

Amended New York State Register November 8, 2023/Volume XLV, Issue 45, eff. 11/8/2023