State Legislature Passes "The Rent Act of 2011"

STATE LEGISLATURE PASSES

“THE RENT ACT OF 2011” 

On June 24, 2011, the New York State Legislature passed The Rent Act of 2011.

Among the Act’s features are the following:

    The rent laws were extended for four years, to June 15, 2015;

    The vacancy increase is limited to one time in each calendar year, notwithstanding the number of vacancy leases entered into in such year;

o       Notably, the Act does not say if any increase, such as a renewal increase, is permitted after the first vacancy increase in the calendar year;

    The rent threshold for deregulation on vacancy was increased from $2000 per month to $2500 per month for any apartment that is or becomes vacant on or after the effective date of the Act;

o       The Act continues the notion that the key is the legal rent that could be charged to the next tenant; even if the amount charged or paid is less than the threshold amount.

    The high rent / high income thresholds for deregulation are increased to $2500 and $200,000 (in each of the prior two years);

o       The $2000 / $175,000 thresholds remain in effect for all proceedings commenced prior to July 1, 2011.

    The individual apartment improvements rent increase (“IAI”) for rent stabilized apartments was amended for larger buildings; that is, buildings with 36 or more apartments:

o       For buildings with 35 or fewer apartments, the IAI remains 1/40^th of the cost incurred by the owner;

o       For buildings with 36 or more apartments, the IAI becomes 1/60^th of the cost incurred by the owner where the rent adjustment takes effect on or after September 24, 2011

The 421-a tax exemption program has been extended, with certain limitations, provided that any eligible project must apply to HPD for a Preliminary Certificate of Eligibility by June 23, 2012.