§ 4. General powers and duties of the commission. 1. At the time this
act shall become effective, the commission shall establish maximum rents
which shall be

(a) for housing accommodations outside the city of New York, the
maximum rent which was established on March first, nineteen hundred
fifty, pursuant to the federal act, and shall not include adjustments
granted by orders issued under the federal act after that date,
regardless of whether they were made effective as of, or retroactive to,
that date or a date prior thereto; and

(b) for housing accommodations within the city of New York, the
maximum rent which was established on March first, nineteen hundred
fifty, pursuant to the federal act, and shall not include either, (1)
adjustments granted by orders issued under the federal act after that
date, regardless of whether they were made effective as of, or
retroactive to, that date or a date prior thereto, or (2) adjustments
granted by orders increasing the maximum rent, issued after March first,
nineteen hundred forty-nine, under the federal act, regardless of
whether the order of increase was made effective as of, or retroactive
to, March first, nineteen hundred forty-nine, or a date prior thereto,
but shall include adjustments for new or additional services or
facilities provided by the landlord while the housing accommodations
were not rented or where tenant-occupied, to which the tenant then in
possession had agreed, either expressly or impliedly; and

(c) for housing accommodations within the cities of New York and
Buffalo which on March first, nineteen hundred fifty, had no maximum
rent established pursuant to the federal act, but which were subject to
a maximum rent established pursuant to the local laws of the cities of
New York and Buffalo, the maximum rent which was established on March
first, nineteen hundred fifty, pursuant to such local laws.

2. Whenever the commission determines that such action is necessary to
effectuate the purposes of this act, it may also establish maximum rents
for housing accommodations, as that term is defined herein, in
municipalities in which no maximum rent was in effect on March first,
nineteen hundred fifty. Any housing accommodation for which a maximum
rent is so established shall be deemed a housing accommodation for all
the purposes, and subject to all the provisions of this act.

2-a. For housing accommodations created by a change from a non-housing
to a housing use or by conversion on or after February first, nineteen
hundred forty-seven, including those decontrolled by order, and
certified by a municipal department having jurisdiction to be a fire
hazard or in a continued dangerous condition or detrimental to life or
health, the maximum rent shall be the rent charged on January first,
nineteen hundred fifty-seven, or the date of first rental, whichever is
later. Any housing accommodations for which a maximum rent is so
established shall be deemed a housing accommodation for all the
purposes, and subject to all the provisions of this act, but only so
long as such illegal or hazardous condition continues and further
certification with respect thereto shall not be required notwithstanding
any inconsistent provision of this act.

2-b. Provision shall be made pursuant to regulations prescribed by the
commission for the establishment, adjustment and modification of maximum
rents in rooming houses, which shall include those housing
accommodations subject to control pursuant to the provisions of
paragraph (b) of subdivision two of section two of this act, having
regard for any factors bearing on the equities involved, consistent with
the purposes of this act to correct speculative, abnormal and
unwarranted increases in rent.

3. Whenever the foregoing standard is not susceptible of application
to a housing accommodation to which this act applies, and for which no
maximum rent was established on March first, nineteen hundred fifty, or
where no registration statement had been filed as had been required by
the federal act, the maximum rent thereof shall be fixed by the
commission, having regard to the maximum rents for comparable housing
accommodations or any other factors bearing on the equities involved,
consistent with the purposes of this act.

3-a. Notwithstanding the foregoing provisions of this section, on and
after May first, nineteen hundred fifty-three, the maximum rent for any
housing accommodations shall not be less than the maximum rent in effect
on March first, nineteen hundred forty-three (or if there was no such
maximum rent then in effect, the maximum rent first established pursuant
to the federal act prior to July first, nineteen hundred forty-seven)
plus fifteen per centum thereof as such sum is adjusted to reflect:

(1) the amount of any decreases in maximum rent required by order
because of decreases in dwelling space, services, furniture, furnishings
or equipment, or substantial deterioration or failure to properly
maintain such housing, and

(2) the amount of increases in maximum rent authorized by order
because of increases in dwelling space, services, furniture, furnishings
or equipment and the amount of the temporary increase authorized by
order because of a major capital improvement.

Nothing contained in this subdivision, however, shall have the effect
of increasing the maximum rent of any housing accommodation more than
fifteen per centum above the maximum rent in effect on April thirtieth,
nineteen hundred fifty-three.

4. (a) The commission may from time to time adopt, promulgate, amend
or rescind such rules, regulations and orders as it may deem necessary
or proper to effectuate the purposes of this act, including practices
relating to recovery of possession; provided that such regulations can
be put into effect without general uncertainty, dislocation and hardship
inconsistent with the purposes of this act; and provided further that
such regulations shall be designed to maintain a system of rent controls
at levels which, in the judgment of the commission, are generally fair
and equitable and which will provide for an orderly transition from and
termination of emergency controls without undue dislocations,
inflationary price rises or disruption. Provision shall be made pursuant
to regulations prescribed by the commission, for individual adjustment
of maximum rents where the rental income from a property yields a net
annual return of less than seven and one-half per centum of the
valuation of the property. Such valuation shall be the current assessed
valuation established by a city, town or village, which is in effect at
the time of the filing of the application for an adjustment under this
subparagraph properly adjusted by applying thereto the ratio which such
assessed valuation bears to the full valuation as determined by the
state board of equalization and assessment on the basis of assessment
rolls of cities, towns and villages for the year nineteen hundred
fifty-four and certified for such year by such board pursuant to section
forty-nine-d of the tax law; provided, however, that where at the time
of the filing of the application for an adjustment under this
subparagraph such board has computations for such year indicating a
different ratio for subclasses of residential property in a city, town
or village, the commission shall give due consideration to such
different ratio except ratios in excess of one hundred percent,
provided, further, that where such board has not determined and
certified any ratio pursuant to such section of such law for a city,
town or village for such year, the commission shall apply the ratio
determined or certified by such board pursuant to section twelve hundred
twelve of the real property tax law for the most recent year; except
where there has been a bona fide sale of the property within the period
between March fifteenth, nineteen hundred fifty-seven, and the time of
the filing of the application, as the result of a transaction at arms'
length, on normal financing terms at a readily ascertainable price and
unaffected by special circumstances such as a forced sale, exchange of
property, package deal, wash sale or sale to cooperative; provided,
however, that where there has been more than one such bona fide sale
within a period of two years prior to the date of the filing of such
application the commission shall disregard the most recent of such sales
if a prior sale within such two-year period was adopted as the valuation
of the property in a proceeding under this subparagraph. In determining
whether a sale was on normal financing terms, the commission shall give
due consideration to the following factors:

(i) The ratio of the cash payment received by the seller to (a) the
sales price of the property and (b) the annual gross income from the
property;

(ii) The total amount of the outstanding mortgages which are liens
against the property (including purchase money mortgages) as compared
with the equalized assessed valuation of the property;

(iii) The ratio of the sales price to the annual gross income of the
property, with consideration given to the total amount of rent
adjustments previously granted, exclusive of rent adjustments because of
changes in dwelling space, services, furniture, furnishings or
equipment, major capital improvements, or substantial rehabilitation;

(iv) The presence of deferred amortization in purchase money
mortgages, or the assignment of such mortgages at a discount;

(v) Any other facts and circumstances surrounding such sale which, in
the judgment of the commission, may have a bearing upon the question of
financing.

No application for adjustment of maximum rent based upon a sales price
valuation shall be filed by the landlord under this subparagraph prior
to six months from the date of such sale of the property. In addition,
no adjustment ordered by the commission based upon such sales price
valuation shall be effective prior to one year from the date of such
sale. Where, however, the assessed valuation of the land exceeds four
times the assessed valuation of the buildings thereon, the commission
may determine a valuation of the property equal to five times the
equalized assessed valuation of the buildings, for the purposes of this
subparagraph. The commission may make a determination that the valuation
of the property is an amount different from such equalized assessed
valuation where there is a request for a reduction in such assessed
valuation currently pending; or where there has been a reduction in the
assessed valuation for the year next preceding the effective date of the
current assessed valuation in effect at the time of the filing of the
application. Net annual return shall be the amount by which the earned
income exceeds the operating expenses of the property, excluding
mortgage interest and amortization, and excluding allowances for
obsolescence and reserves, but including an allowance for depreciation
of two per centum of the value of the buildings exclusive of the land,
or the amount shown for depreciation of the buildings in the latest
required federal income tax return, whichever is lower; provided,
however, that (1) no allowance for depreciation of the buildings shall
be included where the buildings have been fully depreciated for federal
income tax purposes or on the books of the owner; or (2) the landlord
who owns no more than four rental units within the state has not been
fully compensated by increases in rental income sufficient to offset
unavoidable increases in property taxes, fuel, utilities, insurance and
repairs and maintenance, excluding mortgage interest and amortization,
and excluding allowances for depreciation, obsolescence and reserves,
which have occurred since the federal date determining the maximum rent
or the date the property was acquired by the present owner, whichever is
later; or (3) the landlord operates a hotel or rooming house or owns a
cooperative apartment and has not been fully compensated by increases in
rental income from the controlled housing accommodations sufficient to
offset unavoidable increases in property taxes and other costs as are
allocable to such controlled housing accommodations, including costs of
operation of such hotel or rooming house, but excluding mortgage
interest and amortization, and excluding allowances for depreciation,
obsolescence and reserves, which have occurred since the federal date
determining the maximum rent or the date the landlord commenced the
operation of the property, whichever is later; or (4) the landlord and
tenant voluntarily enter into a valid written lease in good faith with
respect to any housing accommodation, which lease provides for an
increase in the maximum rent not in excess of fifteen per centum and for
a term of not less than two years, except that where such lease provides
for an increase in excess of fifteen per centum, the increase shall be
automatically reduced to fifteen per centum; or (5) the landlord and
tenant by mutual voluntary written informed agreement agree to a
substantial increase or decrease in dwelling space, furniture,
furnishings or equipment provided in the housing accommodations;
provided that an owner shall be entitled to a rent increase where there
has been a substantial modification or increase of dwelling space, or
installation of new equipment or improvements or new furniture or
furnishings provided in or to a tenant's housing accommodation. The
increase in the maximum rent for the affected housing accommodation
shall be one-one hundred sixty-eighth, in the case of a building with
thirty-five or fewer housing accommodations, or one-one hundred
eightieth, in the case of a building with more than thirty-five housing
accommodations where such increase takes effect on or after the
effective date of the chapter of the laws of two thousand nineteen that
amended this subparagraph, of the total actual cost incurred by the
landlord up to thirty thousand dollars in providing such reasonable and
verifiable modification or increase in dwelling space, furniture,
furnishings, or equipment, including the cost of installation but
excluding finance charges and any costs that exceed reasonable costs
established by rules and regulations promulgated by the division of
housing and community renewal. Such rules and regulations shall include:
(i) requirements for work to be done by licensed contractors and a
prohibition on common ownership between the landlord and the contractor
or vendor; and (ii) a requirement that the owner resolve within the
dwelling space all outstanding hazardous or immediately hazardous
violations of the uniform fire prevention and building code (Uniform
Code), New York city fire code, or New York city building and housing
maintenance codes, if applicable. Provided further that an owner who is
entitled to a rent increase pursuant to this clause 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. Provided
further that the recoverable costs incurred by the landlord, pursuant to
this subparagraph, shall be limited to an aggregate cost of thirty
thousand dollars in a fifteen year period beginning with the first
individual apartment improvement on or after June fourteenth, two
thousand nineteen. The owner shall give written notice to the commission
of any such adjustment pursuant to this clause; or (6) there has been,
since March first, nineteen hundred fifty, an increase in the rental
value of the housing accommodations as a result of a substantial
rehabilitation of the building or housing accommodation therein which
materially adds to the value of the property or appreciably prolongs its
life, excluding ordinary repairs, maintenance and replacements; or (7)
there has been since March first, nineteen hundred fifty, a major
capital improvement essential for the preservation, energy efficiency,
functionality, or infrastructure of the entire building, improvement of
the structure including heating, windows, plumbing and roofing, but
shall not be for operational costs or unnecessary cosmetic improvements;
which for any order of the commissioner issued after the effective date
of the chapter of the laws of two thousand nineteen that amended this
paragraph the cost of such improvement shall be amortized over a
twelve-year period for buildings with thirty-five or fewer units or a
twelve and one-half year period for buildings with more than thirty-five
units, and shall be removed from the legal regulated rent thirty years
from the date the increase became effective inclusive of any increases
granted by the applicable rent guidelines board. Temporary major capital
improvement increases shall be collectible prospectively on the first
day of the first month beginning sixty days from the date of mailing
notice of approval to the tenant. Such notice shall disclose the total
monthly increase in rent and the first month in which the tenant would
be required to pay the temporary increase. An approval for a temporary
major capital improvement increase shall not include retroactive
payments. The collection of any increase shall not exceed two 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 collectability
of any dollar excess above said sum to be spread forward in similar
increments and added to the rent as established or set in future years.
Upon vacancy, the landlord may add any remaining balance of the
temporary major capital improvement increase to the legal regulated
rent. Notwithstanding any other provision of the law, for any renewal
lease commencing on or after June 14, 2019, the collection of any rent
increases due to any major capital improvements approved on or after
June 16, 2012 and before June 16, 2019 shall not exceed two percent in
any year for any tenant in occupancy on the date the major capital
improvement was approved; provided, however, where an application for a
temporary major capital improvement increase has been filed, a tenant
shall have sixty days from the date of mailing of a notice of a
proceeding in which to answer or reply. The state division of housing
and community renewal shall provide any responding tenant with the
reasons for the division's approval or denial of such application; or
(8) there has been since March first, nineteen hundred fifty, in
structures containing more than four housing accommodations, other
improvements made with the express informed consent of the tenants in
occupancy of at least seventy-five per centum of the housing
accommodations, provided, however, that no adjustment granted hereunder
shall exceed two per centum unless the tenants have agreed to a higher
percentage of increase, as herein provided; (9) there has been, since
March first, nineteen hundred fifty, a subletting without written
consent from the landlord or an increase in the number of adult
occupants who are not members of the immediate family of the tenant, and
the landlord has not been compensated therefor by adjustment of the
maximum rent by lease or order of the commission or pursuant to the
federal act; or (10) the presence of unique or peculiar circumstances
materially affecting the maximum rent has resulted in a maximum rent
which is substantially lower than the rents generally prevailing in the
same area for substantially similar housing accommodations.

In addition to the filing of written statements setting forth the
final rate of equalization concerning assessment rolls of cities, towns
and villages, after determination thereof by the state board of
equalization and assessment, with the appropriate officials as now
required by law, such board shall also file a copy of each such
statement, duly certified, in so far as they relate to cities, towns and
villages subject to rent control pursuant to this act, with the state
rent administrator and the chairman of the temporary state commission to
study rents and rental conditions. Where such board has made
computations indicating a different ratio for subclasses of residential
property, such information shall also be filed with such rent
administrator and the chairman of such temporary state commission.

(b) The total of all adjustments ordered by the commission pursuant to
(1) and (3) of paragraph (a) of subdivision four hereof for any
individual housing accommodations shall not exceed fifteen per centum
for any twelve month period; provided, however, that in ordering an
adjustment pursuant to (1), the commission may waive this limitation
where a greater increase is necessary to make the earned income of the
property equal to its operating expense; provided further, however, that
the maximum rents subject to the allocation requirement of paragraph (c)
hereof shall be increased by such further additional amount during each
succeeding twelve-month period, not exceeding fifteen per centum of the
maximum rent in effect on the effective date of the original order of
adjustment, until the maximum rents for the property shall reflect the
net annual return provided for pursuant to (1) hereof, but in no event,
however, shall the total increase ordered for a succeeding twelve-month
period be more than an additional three per centum of the maximum rent
in effect on the effective date of the original order of adjustment
unless a new application be filed by the landlord.

The commission shall compile and make available for public inspection
at reasonable hours at its principal office and at each appropriate
local office, and shall file with the chairman of the temporary state
commission to study rents and rental conditions the manual of accounting
procedures and advisory bulletins applicable to applications under (1),
(2) and (3) hereof, and all amendments thereto.

(c) Any increase in maximum rent shall be apportioned equitably among
all the controlled housing accommodations in the property. In making
such apportionment and in fixing the increases in maximum rents the
commission shall give due consideration (1) to all previous adjustments
or increases in maximum rents by lease or otherwise; and (2) to all
other income derived from the property, including income from space and
accommodations not controlled, or the rental value thereof if vacant or
occupied rent-free, so that there is allocated to the controlled housing
accommodations therein only that portion of the amount of increase
necessary pursuant to (1), (2) or (3) of paragraph (a) of subdivision
four hereof, as is properly attributable to such controlled
accommodations.

(d) No landlord shall be entitled to any increase in the maximum rent
unless he certifies that he is maintaining all essential services
furnished or required to be furnished as of the date of the issuance of
the order adjusting the maximum rent and that he will continue to
maintain such services so long as the increase in such maximum rent
continues in effect; nor shall any landlord be entitled to any increase
in the maximum rent in any case where a municipal department having
jurisdiction certifies that the housing accommodation is a fire hazard
or is in a continued dangerous condition or detrimental to life or
health, or is occupied in violation of law.

(e) Before ordering any adjustment in maximum rents, a reasonable
opportunity to be heard thereon shall be accorded the tenant and the
landlord.

(f) An owner, lessor or agent thereof shall be prohibited from
assessing a lessee any fee, surcharge or other charges for legal
services in connection with the operation or rental of a residential
unit unless the owner, lessor or agent has the legal authority to do so
pursuant to a court order. Legal services include, but are not limited
to, court fees, legal representation, attorney fees, notary public
charges, and administrative fees incurred by the owner, lessor or agent
in connection with management of the building, including actions and
proceedings in a court of law. Any agreement or assessment to the
contrary shall be void as contrary to public policy.

(g) No owner of a housing accommodation subject to the provisions of
this law shall impose any surcharge for the installation and use of a
tenant-installed air conditioner unit where the tenant pays for electric
utility service.

5. (a) Whenever in the judgment of the commission such action is
necessary or proper in order to effectuate the purposes of this act, the
commission may, by regulation or order, regulate or prohibit speculative
or manipulative practices or renting or leasing practices, including
practices relating to recovery of possession, which in the judgment of
the commission are equivalent to or are likely to result in rent
increases inconsistent with the purposes of this act.

(b) Whenever in the judgment of the commission such action is
necessary or proper in order to effectuate the purposes of this act, the
commission may provide regulations to assure the maintenance of the same
living space, essential services, furniture, furnishings and equipment
as were provided on the date determining the maximum rent, and the
commission shall have power by regulation or order to decrease the
maximum rent for any housing accommodation with respect to which a
maximum rent is in effect, pursuant to this act if it shall find that
the living space, essential services, furniture, furnishings or
equipment to which the tenant was entitled on such date has been
decreased. The amount of the decrease in maximum rent ordered by the
commission under this paragraph shall be reduced by any credit,
abatement or offset in rent which the tenant has received pursuant to
section two hundred thirty-five-b of the real property law, that relates
to one or more conditions covered by such order.

(c) Whenever any municipal department having jurisdiction certifies
that any housing accommodation is a fire hazard or is in a continued
dangerous condition or detrimental to life or health, or is occupied in
violation of law, the commission may issue an order decreasing the
maximum rent of such housing accommodation in such amount as it deems
necessary or proper, until the said municipal department has certified
that the illegal or hazardous condition has been removed.

6. Any regulation or order issued pursuant to this section may be
established in such form and manner, may contain such classifications
and differentiations, and may provide for such adjustments and
reasonable exceptions as in the judgment of the commission are necessary
or proper in order to effectuate the purposes of this act. No increase
or decrease in maximum rent shall be effective prior to the date on
which the order therefor is issued.

7. Regulations, orders, and requirements under this act may contain
such provisions as the commission deems necessary to prevent the
circumvention or evasion thereof.

8. The powers granted in this section shall not be used or made to
operate to compel changes in established rental practices, except where
such action is affirmatively found by the commission to be necessary to
prevent circumvention or evasion of any regulation, order, or
requirements under this act.

9. No annual rent increase authorized pursuant to this act shall
exceed the average of the previous five annual rental adjustments
authorized by a rent guidelines board for a rent stabilized unit
pursuant to section 4 of the emergency tenant protection act of nineteen
seventy-four.