§ 6. Regulation of rents. a. Notwithstanding the provisions of any
lease or other rental agreement, no owner shall, on or after the first
day of the first month or other rental period following a declaration of
emergency pursuant to section three, which date shall be referred to in
this act as the local effective date, charge or collect any rent in
excess of the initial legal regulated rent or adjusted initial legal
regulated rent until such time as a different legal regulated rent shall
be authorized pursuant to guidelines adopted by a rent guidelines board
pursuant to section four.

b. The initial legal regulated rents for housing accommodations in a
city having a population of less than one million or a town or village
as to which a declaration of emergency has been made pursuant to this
act shall be:

(1) For housing accommodations subject to the emergency housing rent
control law which become vacant on or after the local effective date of
this act, the rent agreed to by the landlord and the tenant and reserved
in a lease or provided for in a rental agreement; provided that such
initial legal regulated rent may be adjusted on application of the owner
or tenant pursuant to subdivision a of section nine of this act; and
provided further that no increase of such initial regulated rent
pursuant to annual guidelines adopted by the rent guidelines board shall
become effective until the expiration of the first lease or rental
agreement taking effect after the local effective date, but in no event
before one year from the commencement of such rental agreement.

(2) For all other housing accommodations, the rent reserved in the
last effective lease or other rental agreement; provided that an initial
rent based upon the rent reserved in a lease or other rental agreement
which became effective on or after January first, nineteen hundred
seventy-four may be adjusted on application of the tenant pursuant to
subdivision b of section nine of this act or on application of either
the owner or tenant pursuant to subdivision a of such section; and
further provided that if a lease is entered into for such housing
accommodations after the local effective date, but before the effective
date of the first guidelines applicable to such accommodations, 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.

c. The initial legal regulated rents for housing accommodations in a
city having a population of one million or more shall be the initial
rent established pursuant to the New York city rent stabilization law of
nineteen hundred sixty-nine as amended.

d. Provision shall be made pursuant to regulations under this act for
individual adjustment of rents where:

(1) 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, on
written informed tenant consent to the rent increase. In the case of a
vacant housing accommodation, tenant consent shall not be required.
Except as provided in subparagraph (B) of this paragraph, the increase
in the legal regulated 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 paragraph, of the total actual cost incurred by the
landlord up to an amount set forth in this paragraph 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 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. Provided
further that the recoverable costs incurred by the landlord, pursuant to
this paragraph, shall be limited to an aggregate cost pursuant to the
following:

(A) thirty thousand dollars that may be expended in a fifteen-year
period beginning with the first individual apartment improvement on or
after June fourteenth, two thousand nineteen, provided further that:

(1) if there is a tenant in place at the time the individual apartment
improvement is undertaken, no costs incurred by the landlord shall be
recoverable pursuant to this subparagraph unless the landlord obtains
written tenant consent from the tenant in place at the time the
individual apartment improvement was undertaken;

(2) increases to the legal regulated rent pursuant to this
subparagraph shall be permanent; and

(3) the thirty thousand dollars may be expended, in the aggregate, on
any number of separate individual apartment improvements in a
fifteen-year period, but in no event shall costs above thirty thousand
dollars be recoverable in a fifteen-year period pursuant to this
subparagraph.

(B) fifty thousand dollars that may be expended in a fifteen-year
period beginning with the first individual apartment improvement on or
after June fourteenth, two thousand nineteen, pursuant to regulation,
operational bulletin or such other guidance as the division of housing
and community renewal may issue, provided further that:

(1) costs shall only be recoverable by a landlord pursuant to this
subparagraph for an individual apartment improvement undertaken during a
vacancy;

(2) costs shall only be recoverable by a landlord pursuant to this
subparagraph for an individual apartment improvement if (i) the
apartment was timely registered as vacant by no later than the
thirty-first of December in each of two thousand twenty-two, two
thousand twenty-three, and two thousand twenty-four, provided that a
landlord may recover costs on this basis no more than once, or (ii) if
the apartment is vacant following a period of continuous occupancy of at
least twenty-five years that occurred immediately prior to the
commencement of such individual apartment improvement;

(3) costs shall only be recoverable by a landlord pursuant to this
subparagraph if such landlord has received prior certification to
recover costs pursuant to this subparagraph from the division of housing
and community renewal based on establishing that the landlord satisfies
one of the eligibility criteria delineated in clause two of this
subparagraph, provided further that such certification shall not be
deemed as evidence that the work performed or costs claimed for the
individual apartment improvement was substantiated or to otherwise act
as a defense in any subsequent rent overcharge proceeding,
determination, or audit;

(4) increases to the legal regulated rent pursuant to this
subparagraph shall be permanent;

(5) the increase in the legal regulated rent for the affected housing
accommodation shall be one-one hundred forty-fourth, in the case of a
building with thirty-five or fewer housing accommodations or one-one
hundred fifty-sixth 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 twenty-four
that amended this paragraph, of the total actual cost incurred by the
landlord up to fifty 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;

(6) costs shall only be recoverable by a landlord pursuant to this
subparagraph for an individual apartment improvement if, immediately
prior to undertaking such individual apartment improvement, the landlord
submits to the division of housing and community renewal any evidence
that the division of housing and community renewal deems necessary and
requests pursuant to regulation, operational bulletin or other guidance,
demonstrating that the improvement was necessitated by a sub-standard
condition or exceeding its useful life immediately prior to the
landlord's work to improve the unit and the landlord's planned work to
improve the unit. Such evidence shall include, but shall not be limited
to, photos of any areas, aspects or appliances in the apartment that
will be improved, and any necessary permits required to undertake the
improvements;

(7) costs shall only be recoverable by a landlord pursuant to this
subparagraph for an individual apartment improvement if, immediately
subsequent to undertaking the individual apartment improvement, the
landlord submits to the division of housing and community renewal any
evidence that the division of housing and community renewal deems
necessary and requests pursuant to regulation, operational bulletin or
other guidance, evidence of the completed work. Such evidence shall
include, but shall not be limited to, photographs of the completed work,
itemized receipts for all parts, materials, appliances, and labor costs,
and proof of payment. Provided further, the division of housing and
community renewal shall require the payment of a fee that equals one
percent of the amount claimed for the individual apartment improvement
at the time of such filing;

(8) for costs recoverable pursuant to item (ii) of clause two of this
subparagraph, the fifty thousand dollars may be expended, in the
aggregate, on any number of separate individual apartment improvements
in a fifteen-year period, but in no event shall costs above fifty
thousand dollars be recoverable in a fifteen-year period pursuant to
this subparagraph;

(9) the division of housing and community renewal may perform an audit
of any individual apartment improvement conducted pursuant to this
subparagraph to determine whether the individual apartment improvement
was undertaken in the manner described and to the extent claimed by the
landlord, whether the costs claimed were substantiated by records, and
whether the rent was properly adjusted. Such audit may incorporate an
inspection of the accommodation at bar. The landlord and the tenant
living in the accommodation may participate in such audit. In the event
the audit finds that the recoverable costs claimed by the landlord
cannot be substantiated, the resulting overcharge shall be considered to
be willful. In addition, the division of housing and community renewal
may issue any fines or penalties set forth in regulations;

(10) the division of housing and community renewal shall perform
random on-site inspections, as it deems necessary, for any unit for
which the owner seeks to recover costs pursuant to this subparagraph;
and

(11) no owner shall be eligible for the rent increase based on
individual apartment improvements pursuant to this subparagraph if,
within the five year period prior to filing such individual apartment
improvement, any unit within any building owned by any owner of the
building in which the unit for which the owner seeks an individual
apartment improvement is located, including but not limited to partial
or beneficial owners, has been the subject of an award or determination
by the division of housing and community renewal or a court of competent
jurisdiction for treble damages due to an overcharge or the owner of the
building in which the unit is located has been the subject of an award
or determination by the division of housing and community renewal or a
court of competent jurisdiction for harassment of any tenants, provided
that such owner shall provide an affidavit confirming such owner's
eligibility under this clause to the division of housing and community
renewal at the same time as, and in addition to, any other materials the
division of housing and community renewal shall require an owner to
submit pursuant to clause six of this subparagraph, and provided further
that such affidavit shall not be deemed to be evidence of compliance
with this clause or a defense in any subsequent rent overcharge
proceeding, determination, or audit.

(2) there has been since January first, nineteen hundred seventy-four
an increase in the rental value of the housing accommodations as a
result of a substantial rehabilitation of the building or the housing
accommodation therein which materially adds to the value of the property
or appreciably prolongs its life, excluding ordinary repairs,
maintenance, and replacements, or

(3) there has been since January first, nineteen hundred seventy-four
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 operation costs or unnecessary cosmetic
improvements. An adjustment under this paragraph shall be in an amount
sufficient to amortize the cost of the improvements pursuant to this
paragraph over a twelve-year period for a building with thirty-five or
fewer housing accommodations, or a twelve and one-half period for a
building with more than thirty-five housing accommodations 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, for any determination issued by the
division of housing and community renewal after the effective date of
the chapter of the laws of two thousand nineteen that amended this
paragraph. Temporary major capital improvement increases shall be
collectable 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, the collection of any rent increases for any
renewal lease commencing on or after June 14, 2019, 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, or

(3-a) 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

(4) an owner by application to the state division of housing and
community renewal for increases in the rents in excess of the rent
adjustment authorized by the rent guidelines board under this act
establishes a hardship, and the state division finds that the rate of
rent adjustment is not sufficient to enable the owner to maintain
approximately the same ratio between operating expenses, including taxes
and labor costs but excluding debt service, financing costs, and
management fees, and gross rents which prevailed on the average over the
immediate preceding five year period, or for the entire life of the
building if less than five years, or

(5) as an alternative to the hardship application provided under
paragraph four of this subdivision, owners of buildings acquired by the
same owner or a related entity owned by the same principals three years
prior to the date of application may apply to the division for increases
in excess of the level of applicable guideline increases established
under this law based on a finding by the commissioner that such
guideline increases are not sufficient to enable the owner to maintain
an annual gross rent income for such building which exceeds the annual
operating expenses of such building by a sum equal to at least five
percent of such gross rent. For the purposes of this paragraph,
operating expenses shall consist of the actual, reasonable, costs of
fuel, labor, utilities, taxes, other than income or corporate franchise
taxes, fees, permits, necessary contracted services and non-capital
repairs, insurance, parts and supplies, management fees and other
administrative costs and mortgage interest. For the purposes of this
paragraph, mortgage interest shall be deemed to mean interest on a bona
fide mortgage including an allocable portion of charges related thereto.
Criteria to be considered in determining a bona fide mortgage other than
an institutional mortgage shall include; condition of the property,
location of the property, the existing mortgage market at the time the
mortgage is placed, the term of the mortgage, the amortization rate, the
principal amount of the mortgage, security and other terms and
conditions of the mortgage. The commissioner shall set a rental value
for any unit occupied by the owner or a person related to the owner or
unoccupied at the owner's choice for more than one month at the last
regulated rent plus the minimum number of guidelines increases or, if no
such regulated rent existed or is known, the commissioner shall impute a
rent consistent with other rents in the building. The amount of hardship
increase shall be such as may be required to maintain the annual gross
rent income as provided by this paragraph. The division shall not grant
a hardship application under this paragraph or paragraph four of this
subdivision for a period of three years subsequent to granting a
hardship application under the provisions of this paragraph. The
collection of any increase in the rent for any housing accommodation
pursuant to this paragraph shall not exceed six 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. No application
shall be approved unless the owner's equity in such building exceeds
five percent of: (i) the arms length purchase price of the property;
(ii) the cost of any capital improvements for which the owner has not
collected a surcharge; (iii) any repayment of principal of any mortgage
or loan used to finance the purchase of the property or any capital
improvements for which the owner has not collected a surcharge; and (iv)
any increase in the equalized assessed value of the property which
occurred subsequent to the first valuation of the property after
purchase by the owner. For the purposes of this paragraph, owner's
equity shall mean the sum of (i) the purchase price of the property less
the principal of any mortgage or loan used to finance the purchase of
the property, (ii) the cost of any capital improvement for which the
owner has not collected a surcharge less the principal of any mortgage
or loan used to finance said improvement, (iii) any repayment of the
principal of any mortgage or loan used to finance the purchase of the
property or any capital improvement for which the owner has not
collected a surcharge, and (iv) any increase in the equalized assessed
value of the property which occurred subsequent to the first valuation
of the property after purchase by the owner.

This subdivision shall apply to accommodations outside a city of one
million or more.

e. Notwithstanding any contrary provisions of this act, on and after
July first, nineteen hundred eighty-four the legal regulated rent shall
be the rent registered pursuant to section twelve-a of this act subject
to any modification imposed pursuant to this act.

f. Notwithstanding any inconsistent provision of law, rule,
regulation, contract, agreement, lease or other obligation, no owner, in
addition to the authorized collection of rent, shall demand, receive or
retain a security deposit or advance payment which exceeds the rent of
one month for or in connection with the use or occupancy of a housing
accommodation by (i) any tenant who is sixty-five years of age or older
for any lease or lease renewal entered into after July 1, 1996 or (ii)
any tenant who is receiving disability retirement benefits or
supplemental security income pursuant to the federal social security act
for any lease or lease renewal entered into after July 1, 2002.

f-1. 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 section shall impose any surcharge for the installation and use of
a tenant-installed air conditioner unit where the tenant pays for
electric utility service.