reporter - rsanyc.net · enrolled in mcp, but will have extended deadlines to meet all the...

CONTENTS:

1 RSA Urges For 5% and 9% Rent Increases at RGB1 Water Board OK’s 7% Rate Hike, Eliminates Frontage Billing2 President’s MessageINSIDE THE RSA 3 RSA Membership MeetingRENT GUIDELINES BOARD 5 RGB Talking Points 5 Follow the RSA Rent Guidelines Board Blog 5 Rent Guidelines Board Hearing and Meetings Schedule

CITY & STATE ROUNDUP 7 Senate Housing Committee Passes Pro-Owner Legislation 9 NYCHA Claims Progress on Section 8 Backlog 10 NYU Report Shows Tax Burden is Heavier on Apartment Owners and Renters 11 HDP Issues Section 8 Web UpdateIN THE COURTS 12 Deemed Renewal Leases 13 Ask The Administrator 14 Access to Tenant Housing Court Information Curtailed16 Calendar of Events

Water Board OK’s 7% Rate Hike, Eliminates Frontage Billing

REPORTER “Fighting for Fairness in New York’s Housing Market”

Vol. 31 Issue 6 June 2012

On May 4, 2012, the NYC Water Board approved an across the board 7% increase in water and sewer rates effective July 1, 2012. This is the lowest increase in seven years, but still more than double the overall rate of consumer inflation in New York City.

More important for many owners, the Water Board also approved the elimination of frontage billing, which will be replaced with a flat-rate charge of $894.15 per unit per year under the Multi-Family Conservation Program (MCP). Effective July 1, 2012, all frontage-billed properties will automatically be enrolled in MCP, but will have extended deadlines to meet all the requirements of that program; owners will have until June

(Continued on Page 3…)

Chairman Jonathan Kimmel speaking to members of the Rent Guidelines Board.

RSA Urges 5% and 9% Rent Increases at RGBFinal Vote Scheduled for June 21st

On Tuesday, May 1, 2012, the Rent Guidelines Board (RGB) approved a range of preliminary rent guidelines: 1.75-4% for one-year leases and 3.5-6.75% for two-year leases. The RGB also proposed similar ranges for hotels and lofts.

At previous testimony before the RGB, the RSA called for rent increases of 5% or $50 for a one-year lease and 9% or $90 for a two-year lease, whichever is greater. The RSA also called for an additional 1% increase for buildings that heat exclusively with oil and argued for a pass-through to tenants of the costs of unfunded government mandates, such as backflow prevention devices, heating oil conversions and energy benchmarking.

The price index of operating costs (PIOC) measured 2.8% this year, down from 6.1% last year, raising concern that this year’s guideline increases could be substantially lower than last year’s increases of 3.75% and 7.25% for

30, 2013 to install water meters and until June 30, 2014 to meet water consumption requirements. Additional information from the Department of Environmental Protection (DEP) about the MCP can be viewed at http://bit.ly/JC73dy.

Some properties currently billed on frontage will see a savings under the new flat rate, but other properties may see a jump in their bills greater than 7%. DEP provides a web-based tool to enable customers to evaluate whether the MCP or metered charges are more economical for them. RSA counselors will have access to the DEP web-based tool and are available to assist members with questions about their

(Continued on Page 3…)

one-and two- year leases. RSA pointed out that this year’s price index was not representative of the sharp increases in real estate taxes and water and sewer rates that affected all property owners. Nor does the price index accurately reflect the raising costs of maintaining and repairing New

2 REPORTER| June 2012

PRESIDENT’S MESSAGE

By Joseph Strasburg

The Rent Guidelines Board (RGB) process continues to steamroll along and my message to you this month is GET INVOLVED! June is an incredibly important month for the RGB as this is when two public hearings take place (on June 13th in the Bronx and June 18th in

Manhattan) as well as the Final Vote that will determine rent increases for the next year. While RSA is there to advocate for property owners and explain why larger rent increases are needed, the RGB needs to hear the message from YOU, the owners. I cannot emphasize enough how important owner presence and participation is at RGB hearings. May 1st marked the preliminary vote for the RGB, which approved a range of 1.75 - 4% for one-year leases and 3.5 - 6.75% for two-year leases. Based on recent history, RSA believes that the final guideline may be on the low end of the proposed range unless property owners make their voices heard. Owners are needed to testify at the public hearings as well as submit written testimony to the RGB. If you are interested in testifying at the RGB or submitting written testimony and you need help with speaking points and testimony, please contact Courtney Ronner, Director of Communications, at 212-214-9235 or [email protected]. You can also call the RGB directly at 212-385-2934 to register to speak. Owners’ voices cannot be drowned out by the cries of tenants this year. If you do not testify at the hearings, please turn out to support the owners who are speaking. The RGB determines the livelihood of many property owners and may well determine the fate of much of New York City’s affordable housing stock.

Legislative BattlesBattles continue to be fought on the legislative front, both

for and against our industry. While the Assembly threatens to set us back with anti-owner legislation, the Republican-controlled Senate is going to bat for owners (see article on Page 7). During the next few months, it will be critical for property owners to stay informed and active. With changes happening on an almost daily basis, the best way to keep

in touch is through the RSA email list. To stay updated, contact an RSA counselor today and give them updated or additional email addresses. In order to keep you informed, we have upgraded our computer system to handle multiple email addresses (see Page 12 for details). Additionally, RSA is expanding its web presence with active Facebook, Twitter and YouTube pages. Stay in touch with us on social media for the latest news.

Now, more than ever, we need your support to strengthen the voice of the property owners. If you haven’t done so already, please ensure that your membership dues are up to date and that you give generously to the RSA Political Action Committee (PAC) and Legal Defense Fund. As a result of redistricting in the Senate, it is a very important election year; the RSA PAC will play a key role in the battle for control of the New York State Senate. Several Senate seats are up for grabs this year as a result of incumbent retirements and new players entering the New York political landscape. These seats will be hotly contested with both sides mustering substantial financial and other resources as the election gets closer. The RSA PAC needs your financial support to ensure that property owners continue to have a seat at the table.

While the road ahead of us may be difficult, support from RSA members, both in membership dues and active participation, is what will make the difference as we fight this battle.

RSA Services for MembersDon’t forget that RSA counselors and services are available

to help you every day. The annual July 31 rent registration deadline is fast approaching. Make sure you are in compliance by using RSA’s Rent Registration Service online, through the mail or in person at the RSA office. RSA’s group purchasing program for Kidde carbon monoxide detectors gives you the lowest price with no delivery charge. RSA counselors are available to assist you with questions about the July 1st conversion from water and sewer frontage charges to the new flat rate.

I look forward to seeing everyone at the Membership Meeting on June 12th (see Page 3 for details).

Disclaimer: Every effort is made to provide accurate and up-to-date information in RSA publications and bulletins. However, information or advice provided in these publications should not be taken as legal opinions. Always consult your attorney when in doubt. The RSA Reporter is intended for the exclusive use of RSA members. This publication may not be reproduced, in whole or in part, without the written permission of the RSA. The RSA welcomes comments, suggestions and questions from its members. Editor: Jack Freund Assistant Editor: Courtney Ronner Production: Christine Chu. Copyright 2012, Rent Stabilization Association of N.Y.C., Inc., 123 William Street, NY, NY 10038.

The RSA Reporter (ISSN #1089-9375) is published monthly (except August) by the Rent Stabilization Association of N.Y.C., Inc., 123 William Street, New York, NY 10038-3804. Periodicals postage paid at New York, NY.

Rent Stabilization Association ♦ 123 William Street New York, NY 10038-3804 ♦ http://www.rsanyc.org ♦ (212) 214-9200

POSTMASTER: Send address changes to The RSA Reporter, 123 William Street, 14th Floor, New York, NY 10038-3804.

3June 2012 |REPORTER

INSIDE THE RSA

Water Board OK’s 7% Rate Hike… (Continued from cover…)

flat rate vs. metered options. In addition to the 7% increase in rate, the Water Board

approved a maximum Service Call fee of $450 for an inspection at the request of a customer where the complaint is found to be outside the jurisdiction of DEP. It also approved annual rates of up to $47.88 per water service line and $95.88 per sewer service line for a Service Line Protection Policy Program that is expected to be implemented in FY 2013. DEP states that the Service Line Protection coverage will spare owners the costs of unexpected service line repairs, minimize overall disruption to the local community and reduce the expense to DEP of shutting down water service on service line leaks that have not been repaired. Owners will be able to opt in to the program for either water or sewer coverage or both.

If your current frontage water and sewer bill works out to significantly less than $894.15 per unit per year, the RSA wants to know. You may be better off converting to metered billing. Please call an RSA counselor at 212-214-9200 with your DEP account number or fax the information to 212-732-7519.

RSA Calls For 5% and 9% (Cont’d from cover…)

York City’s ever-aging housing stock. In calling for higher rent guidelines, the RSA pointed out

that the core price index, which excludes changes in volatile components like oil and electricity, measured 5% this year and that the price index for oil-heated buildings was 3.9%, more than a point higher than the overall price index which includes gas-heated buildings. Based on these findings, the RSA suggested that this year’s guidelines should be based on the core index, which is more consistent and reflective of real costs, and that buildings that heat with oil and did

not benefit from the drop in gas prices should have higher rent guidelines.

Since the RGB typically justifies inadequate guidelines as a process of balancing the interests of tenants and owners, the RSA demonstrated that a large percentage of low-income tenants were protected from rent increases because they receive Section 8 vouchers or other housing assistance, while the majority of middle-income tenants were not rent

burdened and could well afford the moderate rent increases necessary to preserve and aging housing stock.

Because of the lower price index and the possibility of lower rent guidelines the RSA is strongly encouraging all owners to make a special effort to testify at one of two public hearings to be held on June 13 and 21 (see Page 5 for details). Owners who want higher rent guidelines and a low-rent adjustment must testify at RGB Public Hearings. If owners are not present, the RGB will only hear from tenants calling for a zero rent increase.

Tenant protesters calling for 0% rent increase at the Preliminary Vote.

Owner advocates Magda Cruz, Esq. and Steven Schleider at the May 1st RGB meeting.

MEMBERSHIP MEETING: June 12, 2012

RSA members are invited to attend a General Membership Meeting on June 12th. Come meet with RSA’s President, Senior staff and counselors. The Membership Meeting is an opportunity for owners to learn about political and regulatory updates as well as discuss concerns and issues. All paid RSA members are welcome to attend.

When: Thursday, June 12, 2012 6:00pm – 8:00pm

Location: 3 West Club 3 West 51st Street New York, NY 10019

Light refreshments will be served.

RSA members MUST register for this meeting as space is limited.

Register by calling 212-214-9243 or via email at [email protected].


How to Present Testimony at the Rent Guidelines Board

The following topics are useful to keep in mind when testifying at the Rent Guidelines Board (RGB):

• Start off with sharing the story of your building(s). Talk about how many years you have owned the building and how long it has been in your family. Talk about how many units your building has. Talk about the GOOD tenants that live in your building and how long they have been there.

• Explain to the RGB how unfunded government mandates, such as installation of backflow prevention devices, heating oil conversion and energy benchmarking, cannot be paid from your rent roll.

• Discuss problems you have experienced with the rising cost of water and sewer and real estate taxes.

• Give examples of unusual and unexpected costs like facade repairs (such as damages from recent storms) or damage caused by tenants which are hard to cover with existing rents that can’t meet routine expenses.

• Tell the RGB if your operating expenses increased by more than 2.8% last year.

• Tell the RGB if you have long-term tenants with low rents that do not cover your operating costs.

• Tell the RGB if you have Section 8 tenants whose rent increases will be paid for by government subsidies.

Ask the Rent Guidelines Board For:Rent increases of 5% or $50 for a one-year lease, • whichever is greater.Rent increases of 9% or $90 for a two-year lease, • whichever is greater. An additional 1% increase for buildings that heat • exclusively with oil .A pass-through to tenants of the costs of unfunded • government mandates, such as backflow prevention devices, heating oil conversions and energy benchmarking.

Remember that you only have three minutes for your testimony. Make notes of the points you want to make or write out your testimony.

Call the RGB directly at 212-385-2934 to register to speak.

You can also submit written testimony for the record.

Follow the RSA Rent Guidelines Board Blog

The RSA has created a Rent Guidelines Board blog to serve as a resource for news and materials related to the annual rent setting process for stabilized apartments.

Go to the RSA RGB blog to read news articles and stay up-to-date on new developments and media coverage of the RGB.

Visit http://blog.rsanyc.net/rent-guidelines-board

RENT GUIDELINES BOARD

DATE LOCATION TIME

Wednesday, June 13, 2012Public Hearing(Public Testimony)

Repertory Theatre of Hostos Community College/CUNY450 Grand ConcourseBronx, NY 10451

4:30 P.M.

Monday,June 18, 2012 Public Hearing(Public Testimony)

The Great Hallat Cooper Union7 East 7th Street at corner of 3rd Ave. (Basement)New York, NY 10003

10:00 A.M.

Thursday,June 21, 2012Public Meeting(Final Vote)

The Great Hallat Cooper Union7 East 7th Street at corner of 3rd Ave. (Basement)New York, NY 10003

5:30 P.M.

The Rent Guidelines Board Hearing and Meetings SchedulePlease mark your calendars for the following

meetings of the Rent Guidelines Board (RGB).

IT’S RGB TIME AGAIN! Owners’ voices must be heard at the RGB. You can help achieve higher rent guidelines and a minimum rent increase! Below are talking points that will aid you in preparing your testimony. Please contact Courtney Ronner at 212-214-9235 or [email protected] if you need help with your testimony.


ELECTRIC SAVINGS PROGRAMThe RSA Electric Savings Program allows RSA members to purchase electricity through an RSA endorsed marketer rather than purchasing it directly from local utilities. Local utilities offer only monthly rates subject to market conditions. Control your energy budget, and potentially earn additional savings from certain rate plans.

The Facts About SwitchingEnergy supply costs account for • about 60% of your utility bill. The rest (transportation or delivery costs) will still be provided by your local utility. There is • no cost to switch to a new supplier. Your local utility will continue to service your account and send • you just one monthly bill.

For a quote on your building using the RSA Electric Savings Program:

Any questions, call Leo Lehrer, RSA’s Director of Marketing & Sales at 212 214 9255 or email to [email protected].

The New York State Senate Housing Committee passed five pieces of pro-owner legislation that could be hugely beneficial to owners if passed in both houses. The bills, sponsored by Senator Cathy Young, address issues that RSA has lobbied for and, as a result, has brought them to the attention of the legislature. The bills address concerns crucial to property owners such as primary residence of rent regulated tenants, owner occupancy provisions of the rent control law, vacancy increases, a tenant’s annual income for purposes of luxury decontrol and limiting renewal leases under rent stabilization to a term of one year.

Bill S5041-A aims to ensure, through the use of tax returns and voting records, that individuals who receive rent regulation benefits actually utilize and occupy their primary residence; additionally, this piece of legislation allows an owner to challenge the primary residence status of the tenant at any time during the tenant’s lease, not only during the lease renewal period prior to the expiration of the tenant’s lease. Bill S5152 deletes the requirement that an owner must prove “immediate and compelling necessity” prior to taking occupancy of an apartment occupied by a rent controlled tenant for personal use; the legislation also

deletes the provision of existing law which prohibits an owner from taking occupancy of a rent controlled apartment where the tenant was residing in the apartment for more than twenty years. Bill S6472 would allow property owners of rent regulated properties, in instances where a family member has succeeded to the prior tenant’s tenancy, to obtain vacancy increases and other increases which would have been authorized had the succeeding tenant not been a family member; additionally, this piece of legislation limits tenants to a one-time-only right of family succession. Bill S6473 would provide for a two year averaging of a tenant’s annual income in determining whether the tenant is eligible for a rent regulated apartment, not $200,000 for each of the prior two years. Lastly, Bill S6515 amends the Emergency Tenant Protection Act of 1974 and the Rent Stabilization Law of 1969 to provide that on and after January 1, 2013, any renewal of stabilized leases will be for a term of one year and eliminating two-year leases.

As we go to publication, RSA anticipates that these pieces of legislation will be approved by the Senate. Upon Senate approval, the next step of the process is for the bills to be reviewed by committees in the Assembly.

CITY & STATE ROUNDUP

Senate Housing Committee Passes Pro-Owner Legislation


Save the Date Seminar:

The City’s New Energy Laws – Update 2012September 12, 2012

9:00AM – 12:30PM14 Vesey Street, Manhattan

Owners are required to comply with the City’s new energy laws and regulations. DEP regulations require heating systems which use #6 oil to convert to cleaner oil or gas, beginning in 2012. Since 2011, Local Law 84 requires owners to benchmark their energy usage on an annual basis. Local Law 87 requires owners to submit energy efficiency reports beginning in 2013. Zone Green, the City’s new zoning regulations, permit owners to install rooftop solar devices, among numerous other changes.

This seminar will educate owners regarding compliance with the new energy laws and regulations, and the available financing resources. Speakers will include City officials, lenders, utilities and energy consultants.

The following topics will be covered, among others:

• Phase-out of #6 Heating Oil – Conversion to Cleaner Oil and Gas

• Local Law 84 Benchmarking – A Report on the First Year

• Local Law 87– Energy Audit and Retrocommission Requirements Commencing in 2013

• Financing Options

Registration information will be provided in the next issue of the RSA Reporter and posted on the website.

The seminar is co-sponsored by the New York County Lawyers Association.



At a recent meeting with senior New York City Housing Authority (NYCHA) officials, including Chairman John Rhea and Acting General Manager Atefeh Riazi, NYCHA reported progress in reducing a backlog of Section 8 lease renewals and retroactive rent payments. The meeting was attended by RSA President Joe Strasburg, other senior RSA staff and two RSA members active in the Section 8 program.The property managers, Sheldon Mann of Langsam Property Services and Elizabeth Crane of Rosedale Management, confirmed that they had seen substantial progress reflected in the April registers sent to property owners, but that more progress was needed. NYCHA officials reported additional progress would be reflected in the June registers.

NYCHA has been struggling since last year to correct a processing backlog resulting from its conversion to a new computer system for processing Section 8 lease renewals, applications and payments, as well as Housing Quality Standards inspections and violations and tenant certifications. Among numerous operational changes, the new computer system required the conversion of paper documents to scanned images during which time much paperwork in the system was apparently lost, needed to be replicated or took longer than expected to process.

In addition, the prior communication system in which owners could speak directly with NYCHA’s housing assistants was replaced with a central call-in number staffed by operators. As a result, owners reported extensive delays and an inability to get administrative matters resolved.

NYCHA also announced other administrative changes. For example, NYCHA clarified that Section 8 renewal leases should no longer be faxed but should instead be mailed to P.O. Box 19197, Long Island City, New York11101-9197. For owners who want to retain proofs of mailing, NYCHA has stated that the P.O. Box will accept certified mail (even though certified mail receipts are not usually provided when mailing to P.O. boxes).

On the other hand, violation correction forms should not be mailed but should instead be faxed to 718-824-0546 without a cover sheet. NYCHA explained that cover sheets will slow processing as new forms are designed with barcodes to be directly incorporated into the NYCHA system and cover sheets will require a manual process.

NYCHA also informed RSA that it had substantially upgraded its Landlord Extranet available to owners who register through NYCHA’s website. Previously, the Extranet

allowed owners to view inspection results, enroll and check the status of direct deposit payments from NYCHA and list vacant apartments available for Section 8 rental.

According to NYCHA, owners can now use the Extranet to: change mailing addresses; report corrected violations; view follow-up inspection reports and NYCHA payment history; additionally, many forms can be printed with barcodes automatically linked to specific tenants. NYCHA is encouraging owners to register and use the Extranet to reduce processing burdens for owners and NYCHA staff.

NYCHA responded to several concerns previously raised by the RSA. For example, building-wide violations will no longer result in the suspension of payments for all Section 8 tenants in the building, but only for those apartments inspected on the same day as the building wide violation. In addition, NYCHA announced that waiting time for calls to the Customer Call-In Center had been reduced substantially. The phone number for the Call-In Center is 718-707-7771.

While RSA is encouraged by the progress being made by NYCHA, we continue to receive complaints from members, particularly with regard to lease renewals and payments. RSA intends to continue to meet with NYCHA to help alleviate the various backlogs that are affecting property owners generally and to work with NYCHA to provide assistance to our members specifically.

NYCHA Claims Progress on Section 8 BacklogUrges Owners to Use Improved Extranet

REMINDER…In July 2012, DEP will stop issuing operating certificates for boilers burning #6 oil. Boilers with operating certificates that renew after July 1, 2012 must be converted to burn #4 or #2 fuel oil or gas. By 2030, #4 oil will also be phased out and owners will be required to convert to boilers that burn #2 oil or natural gas.

For more information, please visit the following links:

www.rsanyc.org/pdf/DEP_Clean_Heat.pdf•

www.nyc.gov/html/gbee/html/codes/heating.shtml•

www.nyc.gov/html/dep/html/air/buildings_heating_oil.shtml•



NYU Report Shows Tax Burden is Heavier on Apartment

Building Owners and RentersThe “State of New York City’s Housing and Neighborhoods

2011”, an annual report recently released by New York University (NYU) Furman Center for Real Estate and Urban Policy, highlighted that New York City’s real estate tax on apartment buildings is the second highest among the 50 largest cities in the country. New York’s effective tax rate of 4.0% ranked just below Detroit’s 4.1% tax rate, the highest tax rate in the country.

In the 2011 fiscal year, the city collected nearly $17 billion from property owners, representing 27 percent of all city revenues. The report finds that owners of New York City’s large rental apartment buildings are subject to a much higher effective property tax rate than owners of one-to three-family homes and, as a result, bear a disproportionate share of the city’s overall tax burden. One- to three-family homes, which are categorized as “Class 1” properties, are taxed at the lowest effective tax rate ( .67%). The other property classes, including multi-family buildings (Class 2), are taxed at higher effective tax rates. The tax rate for Class 2 properties (3.31%) is five times the rate for Class 1 properties.

The Furman Report makes much of the fact that the City’s high tax on apartment buildings gets passed on to renters, even suggesting that renters are “subsidizing” property owners. The authors of the Report ignore the fact that property owners simply collect real estate taxes and pass it along to the City. As a result of inadequate Rent Guidelines Board increases, a substantial percentage of property owners do not collect enough income to cover their costs and effectively end up subsidizing their tenants.

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HPD Issues Section 8 Web Update

HPD’s Section 8 Partner Portal, launched in the spring of 2010, is an online tool for owners with active Section 8 tenants. The portal, launched by the Division of Tenant Resources (DTR), allows landlords and managing agents access to information from HPD’s information management system, including current HAP subsidy status, HQS inspection history, household composition data and HAP check history. Additionally, this service allows owners to download Section 8 forms directly from the Partner Portal.

According to HPD, those enrolled in the Partner Portal program find it is a quick and convenient means of staying informed about the subsidy status of their tenants. Since the Partner Portal launched, 23% of HPD’s Section 8 landlords have become users. An HPD-conducted survey indicated that close to 60% of participants used it to access their payment registers and 88% find it the most useful feature of the portal.

HPD says its online tool for owners with Section 8 tenants has been well received and encourages more owners to utilize it. To enroll, send an email to [email protected] for access to this information 24 hours a day, 7 days a week. DTR sends IDs and passwords to enrolled owners by email to their registered email addresses. Once you are enrolled, you will need to activate the account by logging in using your user ID and password; if you fail to do this within 6 months, the account will be cancelled. For more information, go to the HPD website at www.nyc.gov/hpd.


NATURAL GAS SAVINGS PROGRAM

RSA members whose buildings use natural gas can now save money and enjoy greater purchasing flexibility by joining the RSA Natural Gas Savings Program. This program allows natural gas users to purchase gas through an RSA marketer rather than purchasing it directly from local utilities.

In addition to savings realized, natural gas users will have the option of purchasing on either a variable or a fixed rate basis. Local utilities offer only monthly variable rates subject to market conditions.

Typical savings for this year are projected between 5% and 12% but because of market volatility last year’s savings was approximately 20%!

For a quote for your building using the RSA NATURAL GAS SAVINGS PROGRAM:

FAX to: (212) 732-0618 your most recent gas bill with the following information

clearly printed on the bill: Name, Address, Phone #, RSA Agent #

-or- MAIL to: RSA, ATTN: Gas Program, 123

William St., 14th Floor, New York, NY 10038.

Any questions, call Leo Lehrer, RSA’s Director of Marketing and Sales at:

(212) 214-9255.Have you replaced the carbon monoxide (CO)

alarms in your buildings yet?

CO alarms can be purchased through the Kidde-RSA Purchasing Program at a discounted rate to RSA members! To order replacement CO alarm through the RSA website at www.rsanyc.org.

Purchase your CO alarms through RSA today!

Millions of CO Alarms in New York City May Have Reached

the End of Their Useful Life

CO Alarms Group Purchasing Program


IN THE COURTSDeemed Renewal Leases,

Samson Management v. Hubert and the AftermathBy: Jeffrey Turkel, Esq.

On May 11, 2012, the Appellate Division, Second Department denied the owner’s motion for leave to appeal to the Court of Appeals in the Samson Management v. Hubert case, in which the Second Department held that the practice of “deeming” renewal leases for non-renewing rent stabilized tenants was illegal. That denial ended the case, leaving only the issue of what owners should now do to protect their rights. The various options, discussed below, are decidedly unsatisfactory.

At the outset, it is generally believed that this decision of the Appellate Division, Second Department (governing Kings, Queens, and Richmond counties) is not binding on trial courts in the Appellate Division, First Department, i.e., Manhattan and the Bronx. That may not be true. Cases have held that until intermediate appellate courts in their Department or the Court of Appeals weigh in on an issue, trial courts in one Department are bound by an appellate order from another Department.

One option for the owner is to commence a non-renewal holdover proceeding pursuant to RSC § 2524.3(f). While the owner is likely to win such a proceeding, there are two significant downsides. First, pursuant to RPAPL § 753(4), courts will give tenants an opportunity to cure post-judgment by signing the lease. Second, courts are reluctant to award attorney’s fees in non-renewal holdovers and the owner will have to expend hundreds, if not thousands, of dollars to merely get the tenant to do what he or she should have done in the first place.

Another option is to do nothing, especially if the tenant is paying the one- or two-year increase authorized by the Rent

Guidelines Board for the period in question. Again, there are two downsides. First, collecting a renewal lease increase without actually renewing the lease itself could be deemed an overcharge. Second, for certain types of eviction proceedings (i.e., non-primary residence and owner occupancy), the owner must serve the tenant with a notice of non-renewal between 150 and 90 days before the lease expiration date. Tenants who did not sign a renewal-lease will undoubtedly argue that there is no lease expiration date and that the proceeding must be dismissed. It is unknown whether courts will dismiss such proceedings and allow tenants to benefit from their own bad conduct.

Some have instead suggested treating the tenant as a month-to-month tenant and then terminating the month-to-month tenancy on 30 days’ notice. That may not be permissible under RSC § 2524.1, which states that where a rent stabilized tenant is paying rent, he or she can only be evicted “on one or more of the grounds specified in this Code.” The RSC does not authorize eviction proceedings based upon the termination of a month-to-month tenancy. It is also unclear under this interpretation whether the tenant retains any of their other rights under rent stabilization, such as succession.

Given all of the forgoing, the best advice is to convince tenants, whether by phone, by letter, or in person, to actually sign their renewal lease offers. If they do not do so, owners are left with the unsatisfactory choices set forth above. Whatever the scenario, however, the owner should contact his or her attorney for guidance.

Jeffrey Turkel, Esq. is a partner at Rosenberg & Estis.

Additional contact information from members…The RSA has upgraded its computer system and is now accepting additional contact information for RSA members. Additional names, phone numbers and email addresses can now be linked to your RSA Agent number. You can indicate what type of information should be sent to each contact (for example, billing, rent registration, safety notices or all).

Please contact an RSA counselor at 212-214-9200 to update this information.


IN THE COURTS

Wednesday, October 3, 2012

Ask The AdministratorQuestion: What happens at RSA’s Non-Payment Workshop?

Answer provided by Howard Stern, Esq., Administrator of the RSA Legal Plan for small property owners, who is solely responsible for its content.

Answer: For quite some time, RSA has sponsored a non-payment workshop for its members. The workshop is generally given by me (with occasional assistance by Ronald Hariri, Esq), over the course of an afternoon, and takes place at the RSA offices. It begins with an up-to-date presentation by Mitchell Posilkin, General Counsel for RSA, on matters of current importance for RSA members. The workshop includes a presentation by RSA’s Leo Lehrer, Director of Marketing, to educate RSA members on the many services provided by RSA to members to assist them. Light refreshments are provided by RSA.

The purpose of the Seminar is to educate members on the particular procedures involved in commencing a non-payment case in Housing Court (holdover case procedures are not included in the Seminar). The workshop provides RSA members with comprehensive information, forms and background to enable them to better prepare and handle their own cases or be prepared for their Housing Court cases to be handled by outside counsel (perhaps one of the RSA Legal Services Plan’s designated law firms, like Ron Hariri, for example).

The Seminar is an informational lecture and presentation in the RSA Boardroom that begins with practical information beneficial to owners on conducting their own due diligence and background checks of potential tenants as well as ways to obtain that information.

Relevant questions are addressed as they arise in the informal atmosphere. During breaks, members have the opportunity to ask questions that are specific to their

particular circumstances. The workshop also covers the proper way in which papers

are required to be served in a non-payment proceeding and that material is covered either by a licensed process server or by me.

For the workshop, RSA provides a comprehensive handout package which includes copies of relevant forms, from the initial three day notice, to Housing Court forms (and a model stipulation of settlement), to forms required to be presented to a NYC Marshal to effectuate an actual eviction.

By the conclusion of the workshop, owners are better educated on the nuts and bolts of non-payment Housing Court proceedings. They leave prepared to assess whether or not to bring their own non-payment cases without counsel. They are given the tools and information that will enable them to assist their own legal counsel in the successful prosecution of a non-payment case.

To register for the next Non-Payment workshop, call Lisa Richmond at 212-214-9243. If you have questions about the RSA Legal Plan, you can all my office at 914-420-6080.


IN THE COURTSAccess to Tenant Housing Court Information Curtailed –

But No Impact on RSA’s Court & Credit ProgramThe ability of property owners to obtain information relating to

prospective tenants as part of the screening process is a critical aspect of the management of residential property in New York City. Due to the rent regulation system, in which tenants have the right to remain in their rent regulated apartments forever, knowing as much as possible about applicants for apartments BEFORE they move in is essential. As every property owner in New York City knows, once an applicant becomes a tenant, it is virtually impossible to remove them. For this reason, the tenant screening process takes on even greater importance than might otherwise be the case.

Aside from credit-related information, owners also want to know whether the applicant has any court-related history, either criminal or civil. In particular, owners need to know whether the applicant has a history of non-payment or holdover proceedings. For many years, the State Office of Court Administration (“OCA”) has sold the computerized data it maintains for the court system to third parties who, in turn, provide the information to vendors; those vendors then charge a fee to property owners who request the information. The same information has also been available at the computer terminals in the courthouses which are accessible to the public.

For many years, OCA has been under pressure from tenant advocates and their supporters in the State Legislature to stop providing the computerized Housing Court data. According to the tenant advocates, the Housing Court data failed to inform potential users of the information that a tenant, for example, might have been the subject of a non-payment case where the tenant had withheld rent because the owner failed to provide services; or the tenant might have brought a proceeding in Housing Court for the correction of conditions, or an owner’s case for non-primary residence might have been unsuccessful. In response, property owners have argued that the Housing Court data is merely one step in the screening process and that applicants who are otherwise eligible have the opportunity to respond to any questions regarding those cases.

Several years ago, OCA did make the Housing Court data more difficult to use by deleting address information maintained by its computer system. As a result, a search for “John Smith” or anyone else with a common name could result in multiple “hits,” thereby requiring the owner to determine, perhaps in conjunction with the applicant, whether the information did, in fact, relate to the applicant.

Despite that measure, and in response to ongoing

concerns by tenant advocates and litigation, OCA has recently announced that it will change its policy in this area and will cease providing the computerized Housing Court data. In a letter to State Senator Liz Krueger, the State’s Chief Administrative Judge, A. Gail Prudenti, stated that OCA:

will no longer provide certain Housing Court Information System data to commercial data vendors, specifically the names of parties in Housing Court matters, if such parties are natural persons. We will soon be advising the vendors and the New York Law Journal of this change, which we hope will help better protect the personal information of the litigants in our Housing Court.

What will this change mean for property owners? For owners who participate in RSA’s Court & Credit

Program, the answer is clear: there will not be any change and the public information those owners receive will continue to be provided, just as it is currently. Participants in the Court & Credit Program will not notice any difference in service, although the change by OCA will make it more difficult for vendors to access the information itself. OCA’s change in policy does not affect those owners who rely upon the publicly-accessible computers at the various courthouses for their information.

If you would like more information regarding RSA’s Court & Credit Program, please call Leo Lehrer, RSA’s Director for Marketing and Sales, at 212-214-9255.


RSA SERVICE PROFILE

WARNING!Rent Registration Deadline: July 31, 2012!

New York State law requires stabilized rents to be registered with the Division of Housing and Community Renewal (DHCR) each year.

Your April 1st rents must be registered by July 31, 2012. Failure to do so can result in rent rollbacks and severe financial penalties.

Register your apartments through RSA’s Rent Registration Service. RSA’s Registration Service provides you with the security of knowing that your annual rent registration information has been electronically transferred and directly entered into DHCR’s database.

RSA’s Rent Registration Service electronically files your Building Summary Form with DHCR (no more need to sign, notarize, and mail your forms) and makes certified rent rolls available without going to a DHCR borough office.

The July 31, 2012 deadline for meeting the annual rent registration requirements is quickly approaching. The quickest and easiest way to fulfill the annual requirements is by using RSA’s On-Line Rent Registration Service. More than one-quarter of RSA Rent Registration customers are now using the On-Line service.

RSA On-Line Rent Registration will let you know when the required tenant notices were mailed as well as the date that information was transferred to DHCR. RSA will automatically file your Building Summary Forms with DHCR electronically. RSA maintains all records should you ever have need of an affidavit of service.

For larger property owners with in-house computerized property management systems, we have an even simpler solution to your rent registration workload. RSA’s Automated Rent Registration Service will accept an electronic file of rent data from your system and transfer it to the RSA rent registration data base. Simply verify the data on-line and you are done!

PAPER REGISTRATIONIf you’re not comfortable using a computer, make an appointment with an RSA counselor and come into our office for assistance or register the traditional way by paper.

** If mailing us the worksheet, send by July 18th to insure it’s done by the 31st.**

To enroll your building(s) for 2012, please call the RSA Rent Registration Hotline at

212-214-9200 or REGISTER ONLINE AT WWW.RSANYC.ORG.

PeriodicalPostage

PaidNY NY

REPORTER

JUNE · JULY

June 30Annual Water and Sewer Charges DuePayable to N.Y.C. Water Board. If not paid before July 30, an interest charge is incurred.

High Income, High Rent DecontrolLast day to file owner’s petition for high income rent deregulation with HCR.

July 1Phase Out of #6 Oil Begins for DEP Operating Certificates.

July 2Pay NYC Property TaxFor properties assessed at more than $80,000, your first semi-annual payment for fiscal 2012-2013 is due to NYC Dept. of Finance today. For properties assessed at $80,000 or less, your first quarterly payment is due July 16.

NYC Fiscal Year 2012-2013 Begins.

July 4Independence DayBuilding Service Employees and City Sanitation Workers’ holiday. No garbage pick-up, no street cleaning. CITY, STATE AND RSA OFFICES CLOSED.

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June 12RSA Membership Meeting6:00 PM – 3 West Club, 3 West 51st Street, Manhattan.

June 13RGB Public Testimony4:00 PM – Repertory Theatre of Hostos Community College/CUNY, 450 Grand Concourse, Bronx.

June 15Personal Estimated Income Tax DueSecond payment for 2012 is due for Federal, State and City income taxes.

J-51 DeadlineLast day to file with HPD for the quarter ending today.

June 18RGB Public Testimony10:00 AM –The Great Hall at Cooper Union, 7 East 7th Street at corner of 3rd Ave. (Basement), Manhattan.

June 20Commercial Rent Tax Return and Payment DueFor the last quarter ending May 31.

June 21RGB Final Vote5:30 PM –The Great Hall at Cooper Union,7 East 7th Street at corner of 3rd Ave. (Basement), Manhattan.

reporter - rsanyc.net · enrolled in mcp, but will have extended deadlines to meet all the...

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