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How does a rent stabilized apartment become deregulated through a vacancy?
There are different ways by which a rent stabilized apartment may be subject to deregulation upon vacancy:
Can an occupied apartment experience deregulation?
Yes. Under some circumstances apartments in 421-a and J-51 buildings may become deregulated at the end of the last lease commencing during the period of the tax abatement. For more information about these programs, see the FAQ section on Tax Abatements & Exemptions for further information.
On rare occasions an apartment in a building converted to a co-op under an eviction plan may be deregulated. Under an eviction plan, tenants are given the choice to purchase the apartment or vacate after a specified period of time. Since the overwhelming majority of co-op conversions are under non-eviction plans, such cases are very uncommon. For more information on this, contact the NYS Attorney General - Real Estate Financing Bureau.
More common is the process of high income deregulation described in the question below.
How are rent controlled apartments decontrolled?
All rent controlled apartments are subject to decontrol upon vacancy unless the outgoing rent controlled tenant was forced out through harassment. However, many decontrolled apartments will fall under rent stabilization. If the apartment is in a building with six or more units, the landlord can initially charge whatever the market will bear, subject to the tenant's right to file what is known as a "Fair Market Rent Appeal." However, if the apartment is in a building with fewer than six units, the apartment will most likely no longer be under any rent regulation. For more information on this process, we suggest you review HCR Fact Sheet #6: Fair Market Rent Appeals.
How does an apartment undergo high-rent or high-income deregulation?
Effective with the Rent Act of 2015, the rent threshold for high-rent vacancy deregulation and high income high-rent deregulation was raised from $2,500 to $2,700. The threshold will be adjusted annually on January 1 of each year based on the one year renewal lease guideline percentage increase issued the prior year by a locality's Rent Guidelines Board. In NYC, the threshold will increase to $2,733.75 effective January 1, 2018, and $2,774.76 effective January 1, 2019.
Detailed information may be found on HCR's page on Deregulation as well as their page on Deregulation Rent and Income Thresholds on HCR's website. For additional info, contact NYS Homes and Community Renewal (HCR), the agency that regulates rent stabilized apartments in NYC.
My new apartment rents for over $2,700 and appears to be deregulated. How do I know for sure that the rent is legal?
Under local law, the landlord may be required to provide you with a notice of deregulation, including the amount of the last regulated rent and a copy of rent registration filed with NYS Homes and Community Renewal (HCR). If you did not receive such a notice, contact HCR. You may want to request a rent history from HCR to determine if the current rent is lawful. For more information, also see the answer to the previous question.
Can the landlord deregulate the building by not offering or signing leases?
Rent Stabilization offers tenants two major protections.
In general, a landlord must offer all stabilized tenants renewal leases. S/he cannot simply deregulate a building. There are two major exceptions: