Send Tenant 2016 DHCR Form if Rent Is $2,700 or More

Rent-regulated apartments with a legal or maximum monthly rent that reaches or exceeds $2,700 as of May 1, 2016, may be petitioned for High Income Rent Deregulation this year. The Rent Act of 2015 amended the rent threshold for high-rent vacancy deregulation and high-income high-rent deregulation by raising the threshold from $2,500 to $2,700. The threshold will be adjusted annually by the one-year renewal lease guideline percentage increase issued the prior year by the Rent Guidelines Board. Current exceptions to luxury deregulation are buildings currently receiving J-51 or 421-a tax benefits and rent-controlled units in buildings that had previously received J-51 tax benefits.

If you have a tenant paying a monthly rent of $2,700 or more for a rent-controlled or rent-stabilized apartment, it’s time to send out the first of two Division of Housing and Community Renewal (DHCR) forms that may eventually lead to deregulation of the apartment. If you miss the deadline, you’ll have to wait until next year to apply for deregulation.

You must send the first form—an income certification form (ICF)—to the tenant by May 1, 2016. This form is used to determine whether the tenant and other occupants of a high-rent apartment (an apartment where the monthly rent is $2,700 or more) have a high income—that is, a combined federal adjusted gross income of more than $200,000 in each of the past two calendar years.

The form’s title, “Income Certification Form—2016 Filing Period,” appears at the top of the front page, and “RA-93 CF (12/15)” appears in the lower left-hand corner. You can get copies of the form, and instructions on how to complete it and send it to your tenants, from your local borough rent office. You can also download the form from the DHCR’s website at http://www.nyshcr.org/forms/rent/ra93cf.pdf.

When to Send Second Form

If a tenant returns the ICF to you and it shows income of more than $200,000 for each of the past two years, or if the tenant doesn’t return the form on time, you can ask the DHCR to deregulate the apartment. You can also ask the DHCR to deregulate the apartment to seek verification of the tenant’s answer in the ICF because you contest it, or if you seek verification of a tenant’s household income because the tenant failed to properly answer the ICF.

To ask the DHCR to deregulate the apartment, you must file a second form—a deregulation petition—with the DHCR. You can file this form online through DHCR’s Owner Rent Regulation Applications (ORRA) system at http://www.nyshcr.org/Apps/ORAOwner/. You must file this form with the DHCR by June 30, 2016. To request access to the ORRA system, email PSU@nyshcr.org and include your name, organization name (if applicable), mailing address, and phone number. You will receive a User ID and password via email.

Even if the tenant claims an income of $200,000 or less in either 2014 or 2015 on the ICF, you should still file the deregulation petition if you have reason to believe the tenant wasn’t truthful. The DHCR will then check the tenant’s income information against the records of the New York State Department of Taxation and Finance. If it is determined that the household income exceeds $200,000, the DHCR will issue an Order of Deregulation, removing the apartment from rent regulation.

Tenant Gets Chance to Respond

After you file your deregulation petition with the DHCR, the DHCR sends it to the tenant and gives the tenant 60 days to respond. If the tenant doesn’t respond, the DHCR should issue an order deregulating the apartment. If the tenant responds after the 60-day deadline, the DHCR may still take into account the tenant’s response, after considering such factors as the reason for and length of the delay. If the tenant had a good reason for not responding on time or if the delay was a short one, the DHCR will consider the tenant’s response in deciding whether to deregulate the apartment.