Chapter 7 - RENT INCREASE EXEMPTION FOR LOW INCOME ELDERLY PERSONS AND PERSONS WITH DISABILITIES

Section 26-601

Section 26-601

  § 26-601 Definitions. As used in this section. a. "Commissioner" means
the  commissioner  of  housing and community renewal of the state of New
York.
  b. "Dwelling unit" means that part of a dwelling in which an  eligible
head  of the household resides and which is subject to the provisions of
either article II, IV, V, or XI of the private housing finance  law,  or
that  part  of  a  dwelling  which  was  or continues to be subject to a
mortgage insured or initially insured by the federal government pursuant
to section two hundred thirteen of the national housing act, as amended,
in which an eligible head of the household resides.
  c. "Eligibility date" means the later of (1) January  first,  nineteen
hundred seventy-five, or (2) the last day of the month in which a person
became  an  eligible  head  of a household in the dwelling unit in which
such person resides at the time of filing the  most  recent  application
for  benefits  hereunder,  or  in  the  case  of a dwelling subject to a
mortgage insured or initially insured by the federal government pursuant
to section two hundred thirteen of the national housing act, as amended,
"eligibility date" means the later of (1) July first,  nineteen  hundred
seventy-seven, or (2) the last day of the month in which a person became
an  eligible  head  of  a  household  in the dwelling unit in which such
person resides at the time of filing the  most  recent  application  for
benefits hereunder.
  d.  "Eligible  head  of  the  household"  means a person or his or her
spouse who is sixty-two years of age or older  or  who  qualifies  as  a
person  with a disability pursuant to section 26-617 of this chapter and
is entitled to the possession or to the use and occupancy of a  dwelling
unit,  provided,  however,  that  with  respect  to a dwelling which was
subject to a mortgage  insured  or  initially  insured  by  the  federal
government  pursuant  to  section  two  hundred thirteen of the national
housing act, as amended, "eligible  head  of  the  household"  shall  be
limited  to  that  person  or  his  or  her  spouse  who was entitled to
possession or the use and occupancy of such dwelling unit at the time of
termination of such mortgage, and whose income when  combined  with  the
income  of all other members of the household whose head of household is
sixty-two years of age or older does  not  exceed  twenty-five  thousand
dollars  beginning  July  first,  two thousand five, twenty-six thousand
dollars beginning July first, two thousand  six,  twenty-seven  thousand
dollars  beginning July first, two thousand seven, twenty-eight thousand
dollars beginning  July  first,  two  thousand  eight,  and  twenty-nine
thousand  dollars  beginning  July  first,  two  thousand  nine, for the
taxable period, or whose income for the current  income  tax  year  when
combined with the income of all members of the household residing in the
housing  accommodation  whose  head  of the household is a person with a
disability does not exceed the maximum income above which such  head  of
the  household  would  not  be  eligible  to  receive  cash supplemental
security income benefits under federal law during such tax year.
  e. "Housing company" means any limited-profit housing company, limited
dividend housing company, redevelopment company or  housing  development
fund  company  incorporated  pursuant to the private housing finance law
and operated exclusively for the benefit of persons or families  of  low
income,  or any corporate owner of a dwelling which is or was subject to
a mortgage insured  or  initially  insured  by  the  federal  government
pursuant to section two hundred thirteen of the national housing act, as
amended.
  f.  "Income"  means  income  received  by  the  eligible  head  of the
household combined with the income of all other members of the household
from all sources after deduction of all income and social security taxes
and  includes  without  limitation,  social  security   and   retirement

benefits,  supplemental  security  income and additional state payments,
public assistance benefits,  interest,  dividends,  net  rental  income,
salary  and earnings, and net income from self-employment, but shall not
include  gifts  or inheritances, payments made to individuals because of
their status as victims of Nazi persecution, as defined in P.L. 103-286,
or increases in benefits accorded pursuant to the social security act or
a public or private pension paid to any member of  the  household  which
increase,  in  any  given year, does not exceed the consumer price index
(all items United States city average) for such year which  take  effect
after  the  eligibility  date  of  an  eligible  head  of  the household
receiving benefits hereunder, whether received by the eligible  head  of
the  household  or  any other member of the household. When the eligible
head of a household has retired on or  after  the  commencement  of  the
taxable period and prior to the date of making an application for a rent
increase  exemption  order/tax  abatement  certificate  pursuant to this
chapter, such person's income shall be adjusted by excluding  salary  or
earnings  and projecting such person's retirement income over the entire
taxable period.
  g. "Income tax year" means a twelve month period for which the head of
the household filed a federal personal income tax return, or if no  such
return is filed, the calendar year.
  h.  "Increase  in maximum rent" means any increase in the maximum rent
for the dwelling unit becoming effective on  or  after  the  eligibility
date,  including capital assessments and voluntary capital contributions
but excluding any increase  in  maximum  rent  attributable  to  gas  or
electrical utility charges or an increase in dwelling space, services or
equipment,  provided, however, that with respect to any dwelling unit in
a dwelling which is or was subject to a mortgage  insured  or  initially
insured  by  the  federal  government  pursuant  to  section two hundred
thirteen of the national housing act, as amended, "increase  in  maximum
rent"  shall  not  include  any increase in maximum rent attributable to
capital assessments or voluntary capital contributions.
  i. "Maximum rent" means the maximum rent, excluding gas  and  electric
utility   charges,   which  has  been  authorized  or  approved  by  the
commissioner or the supervising  agency  or  the  legal  regulated  rent
established  for  the dwelling unit pursuant to the provisions of either
article II, IV, V or XI of the  private  housing  finance  law,  or  the
rental  established  for  a cooperatively owned dwelling unit previously
regulated pursuant to the provisions of article II, IV, V or XI  of  the
private  housing  finance  law, or the rental established for a dwelling
unit, in a dwelling subject to a mortgage insured or  initially  insured
by  the  federal  government pursuant to section two hundred thirteen of
the national housing act, as amended or  such  rent  established  for  a
dwelling  unit  which  was  subject  to  a mortgage insured or initially
insured by the  federal  government  pursuant  to  section  two  hundred
thirteen of the national housing act, as amended.
  j.  "Members of the household" means the head of the household and any
person, permanently residing in the dwelling unit.
  k. "Supervising agency" means the department of  housing  preservation
and development.
  l.  "Taxable  period"  means the income tax year immediately preceding
the date of making application for a rent increase  exemption  order/tax
abatement certificate.

Section 26-602

Section 26-602

  §  26-602  Real  property  tax  exemption.  Real property of a housing
company shall be exempt from real property taxes, in an amount equal  to
the  rent  increase  exemptions  actually  credited to eligible heads of
households pursuant to this chapter. Any  such  exemption  shall  be  in
addition to any other exemption or abatement of taxes authorized by law.

Section 26-603

Section 26-603

  §  26-603  Reimbursement  for rent exemptions; rent increase exemption
fund established. In the event that  the  real  property  of  a  housing
company  containing  one  or more dwelling units shall be totally exempt
from local and municipal real property taxes for any fiscal  year  as  a
result  of  the  exemptions  from maximum rent credited pursuant to this
section or otherwise, the supervising agency may  make  or  contract  to
make payments to a housing company in an amount not exceeding the amount
necessary  to  reimburse the housing company for the total dollar amount
of all exemptions from the payment of maximum rent accorded pursuant  to
this  chapter  to  eligible  heads of the household residing in dwelling
units in such real property. A fund to be known  as  the  rent  increase
exemption  fund shall be created and established in order to provide for
the payments made pursuant to this section. There may be paid into  such
fund  (1)  all  of  the  rental  surcharges  collected  from the housing
companies organized and existing pursuant to articles II, IV, V  and  XI
of  the  private  housing finance law and (2) any moneys appropriated or
otherwise made available for the purpose of such fund.

Section 26-604

Section 26-604

  §  26-604  Rent  increase  exemption funding requirement. In the event
that the real property of a  housing  company  containing  one  or  more
dwelling  units  shall  be  totally exempt from local and municipal real
property taxes as a result of the exemption from maximum  rent  credited
pursuant  to this chapter or otherwise, the supervising agency shall not
issue any  rent  increase  exemption  order/tax  abatement  certificates
unless  there  are monies in the rent increase exemption fund to provide
reimbursement to the housing company for the total dollar amount of  all
exemptions  from  the  payment of maximum rent accorded pursuant to this
chapter to eligible heads of the household residing in dwelling units in
such real property.

Section 26-605

Section 26-605

  §  26-605  Rent  increase exemption orders/tax abatement certificates.
(a) Subject to the provisions of this chapter an eligible  head  of  the
household  may  obtain  a  rent  increase  exemption order/tax abatement
certificate entitling him or her to an exemption from increases  in  the
maximum rent otherwise payable in one of the following amounts:
  (1)  where  the  eligible  head  of  the  household does not receive a
monthly allowance for shelter pursuant to the social services  law,  the
amount  by  which  increases  in  the  maximum  rent  subsequent to such
persons' eligibility date have resulted in the  maximum  rent  exceeding
one-third of the combined income of all members of the household for the
taxable  period, except that in no event shall a rent increase exemption
order tax abatement certificate become effective prior to January first,
nineteen hundred seventy-six; or
  (2) where the eligible  head  of  the  household  receives  a  monthly
allowance for shelter pursuant to the social services law, an amount not
exceeding  that  portion  of  any increase in maximum rent subsequent to
such person's eligibility date which  is  not  covered  by  the  maximum
allowance  for shelter which such person is entitled to receive pursuant
to the social services law.
  (b) Notwithstanding any other provision of  law,  when  a  head  of  a
household  to whom the then current, valid tax abatement certificate has
been issued under this chapter, chapter three or chapter  four  of  this
title  moves  his  principal  residence  to  a  subsequent dwelling unit
subject to this chapter, or which  is  or  was  subject  to  a  mortgage
insured  or  initially  insured  by  the  federal government pursuant to
section two hundred thirteen of the national housing  act,  as  amended,
the  head  of the household may apply to the supervising agency, subject
to the terms and conditions imposed by this chapter, for a tax abatement
certificate  relating  to  the  subsequent  dwelling  unit,   and   such
certificate  may  provide that the head of the household shall be exempt
from paying that portion of the maximum rent for the subsequent dwelling
unit which is the least of the following:
  (1) the amount by which the rent  for  the  subsequent  dwelling  unit
exceeds  the  last rent, as reduced, which the head of the household was
required to actually pay in the original dwelling unit;
  (2) the last amount deducted from the maximum rent or legal  regulated
rent  meaning the most recent monthly deduction for the applicant in the
original dwelling unit pursuant  to  this  section,  section  26-406  or
section 26-409 of this title; or
  (3)  where  the  eligible  head  of  the  household does not receive a
monthly allowance pursuant to the social services  law,  the  amount  by
which  the  maximum  rent  or  legal  regulated  rent  of the subsequent
dwelling unit exceeds one-third of the combined income of all members of
the household.
  Such certificate shall be effective as of the first day of  the  month
in  which  the  tenant  applied for such exemption or as of the date the
tenant took occupancy of the  subsequent  dwelling  unit,  whichever  is
later, provided both occur after the effective date of this law.
  (c)  Notwithstanding  any  other  provision  of  law and to the extent
applicable to the provisions of this chapter,  any  renewal  application
being  made  by  the  tenant pursuant to this section, any rent increase
order then in effect with respect to such tenant shall be deemed renewed
until  such  time  as  the  department  of  housing   preservation   and
development  shall  have  found  such  tenant  to  be either eligible or
ineligible for a rent increase exemption order but in no event for  more
than  six additional months. If such tenant is found eligible, the order
shall be deemed to have taken effect upon expiration of  the  exemption.
In  the  event  that  any  such  tenant  shall,  subsequent  to any such

automatic renewal, not be granted a rent increase exemption order,  such
tenant shall be liable to his or her landlord for the difference between
the amounts he or she has paid under the provisions of the automatically
renewed  order  and the amounts which he or she would have been required
to pay in the absence of such order. Any rent increase  exemption  order
issued  pursuant  to this chapter shall include provisions giving notice
as to the contents of this section relating  to  automatic  renewals  of
rent exemption orders.
  (d)  notwithstanding any other provision of law to the contrary, where
an eligible head of the household holds a current, valid  rent  increase
exemption  order/tax abatement certificate and, after the effective date
of this subdivision, there is a  permanent  decrease  in  income  in  an
amount  which  exceeds  twenty  percent of such income as represented in
such eligible head of household's last approved application for  a  rent
increase  exemption  order/tax  abatement  certificate  or  for  renewal
thereof,  such  eligible  head  of  the  household  may  apply   for   a
redetermination  of the amount set forth therein. Upon application, such
amount shall be redetermined so as to reestablish the ratio of  adjusted
rent  to  income  which existed at the time of approval of such eligible
head of the household's last application for a rent  increase  exemption
order/tax  abatement  certificate  or  for  renewal  thereof;  provided,
however, that in no event shall the  amount  of  the  adjusted  rent  be
redetermined  to be (i) in the case of an eligible head of the household
who does not receive a monthly allowance for  shelter  pursuant  to  the
social  services law, less than one-third of income; or (ii) in the case
of an eligible head of the household who receives  a  monthly  allowance
for  shelter  pursuant to the social services law, less than the maximum
allowance for shelter which such  eligible  head  of  the  household  is
entitled to receive pursuant to law. For purposes of this subdivision, a
decrease  in  income  shall not include any decrease in income resulting
from the manner in which income is calculated pursuant to any  amendment
to  paragraph f of subdivision one of section four hundred sixty-seven-c
of the real property tax law or an amendment to subdivision f of section
26-601 of this code made on  or  after  April  first,  nineteen  hundred
eighty-seven.  For  purposes  of this subdivision, "adjusted rent" shall
mean maximum rent less the amount set forth in a rent increase exemption
order/tax abatement certificate.

Section 26-605.1

Section 26-605.1

  §   26-605.1   Effect   of   reclassification   of   dwelling   units.
Notwithstanding the provisions of this chapter, chapter three or chapter
four of this title, when a dwelling unit  subject  to  this  chapter  is
later  reclassified by order of the commissioner, the supervising agency
or by any other governmental agency supervising such dwelling  unit,  or
by  operation of law to a dwelling unit subject to any of the provisions
of article II,  IV,  V  or  XI  of  the  private  housing  finance  law,
regulation  under  chapter  four  of  this title or the emergency tenant
protection act of nineteen seventy-four, or when a dwelling unit subject
to regulation under such act, chapter four  or  chapter  three  of  this
title  is  reclassified  by order of the commissioner or the supervising
agency or by operation  of  law  to  a  dwelling  unit  subject  to  the
provisions of article II, IV, V or XI of the private housing finance law
or  subject  to  a  mortgage insured or initially insured by the federal
government pursuant to section two  hundred  thirteen  of  the  national
housing  act,  as  amended,  a head of the household who held or holds a
valid rent increase exemption order/tax  abatement  certificate  at  the
time  of  the reclassification shall be issued a rent increase exemption
order under this chapter or chapter four of this title,  as  applicable,
continuing  the  previous exemption notwithstanding the reclassification
of the dwelling unit.

Section 26-606

Section 26-606

  § 26-606 Applications for exemption orders/tax abatement certificates;
issuance  and  copies.  The  eligible  head of the household shall apply
annually to  the  supervising  agency  for  a  rent  increase  exemption
order/tax  abatement  certificate  on  a  form to be prescribed and made
available by  the  supervising  agency.  The  supervising  agency  shall
approve  or  disapprove  applications and, if it approves, shall issue a
rent increase exemption order/tax abatement certificate. Copies of  such
order/certificate  shall  be  issued to the housing company managing the
dwelling unit of the eligible head of the  household,  to  the  eligible
head of the household and to the department of finance.

Section 26-607

Section 26-607

  §   26-607   Effective   dates   of   exemption  orders/tax  abatement
certificates.  The effective date of a rent increase exemption order/tax
abatement certificate shall be the date of the first increase in maximum
rent becoming effective after the applicant's eligibility  date,  except
that  in  no  event  shall a rent increase exemption order/tax abatement
certificate become effective prior to January  first,  nineteen  hundred
seventy-six.

Section 26-608

Section 26-608

  §  26-608 Credit allowances; penalties for overcharge. Upon receipt of
a copy of a rent increase exemption order/tax abatement certificate, the
housing company managing the dwelling unit of the eligible head  of  the
household  shall  promptly  accord to the eligible head of the household
covered by such order/certificate the  appropriate  credit  against  the
monthly maximum rent then and thereafter payable. To the extent the full
amount  of  such  credit has not been accorded for any past period since
the effective date  specified  in  the  order/certificate,  the  housing
company  shall  credit the total aggregate amount not so credited to the
monthly maximum rent next payable or to such subsequent monthly  maximum
rents,  as  the supervising agency may authorize. It shall be illegal to
collect any  amount  for  which  a  rent  increase  exemption  order/tax
abatement certificate provides credit or to withhold credit for any such
amounts  already  collected,  and  collection  or  retention of any such
amount for a dwelling  unit  occupied  by  such  eligible  head  of  the
household  shall  be  deemed  a  rent  overcharge,  and  upon conviction
therefor  the  housing  company  and  its  directors  and  any  employee
responsible  therefor  shall be guilty of a misdemeanor, punishable by a
fine not to exceed one thousand dollars or imprisonment  not  to  exceed
six months, or both.

Section 26-609

Section 26-609

  §  26-609 Application for tax benefit; credits. In order to obtain the
tax benefits to which it is  entitled  under  this  chapter,  a  housing
company must file with the department of finance a sworn application, in
such  form  as  such  officer may prescribe, for any period in which the
housing company has accorded  an  eligible  head  of  the  household  an
exemption  hereunder  from  the  payment of the maximum rent. Subject to
prior or subsequent verification  thereof,  the  department  of  finance
shall  credit  the  total amount of such exemptions actually accorded to
occupants of dwelling units contained in the property against  the  real
property  taxes  next  payable  with  respect  to  the  property,  on  a
prospective basis  only.  The  housing  company  shall  attach  to  such
application  copies  of all rent increase exemption orders/tax abatement
certificates issued to eligible  heads  of  the  household  residing  in
dwelling units in such real property.

Section 26-610

Section 26-610

  §  26-610  Excessive  exemption; liens. If a subsequent audit of taxes
payable and exemptions recognized pursuant  to  this  chapter  discloses
that  an  exemption  previously  recognized  on  the  basis of a housing
company's verified application is excessive, the amount of  tax  payable
by reason of such disclosure and the statutory penalty thereon, shall be
a  lien  upon  the  property as of the due date of the tax for which the
excessive exemption was claimed, unless after the  housing  company  has
filed  the  tax  exemption  claims,  the  supervising  agency  issues  a
corrected  rent  increase  exemption  order/tax  abatement   certificate
retroactively   modifying   or  revoking  the  rent  increase  exemption
order/tax abatement certificate  based  on  error  in  the  personal  or
financial  data  in  the  application  or  based  on  error  in the rent
calculation not due to any willful fault  of  the  housing  company,  in
which  case  the amount of tax payable by reason of the disclosure shall
be a lien upon the property as of the date for  payment  of  taxes  next
following  certification  of  such  corrected  order  by the supervising
agency.

Section 26-611

Section 26-611

  §  26-611 Rules and regulations. The supervising agency may promulgate
such rules and regulations as may be necessary to effectively carry  out
the provisions of this chapter.

Section 26-612

Section 26-612

  §  26-612  Violations;  penalties. It shall be illegal, for any person
submitting an application for a rent increase exemption pursuant to this
section, to make any false statement  or  willful  misrepresentation  of
fact,  and  upon  conviction thereof such applicant shall be guilty of a
misdemeanor, punishable by a fine not to exceed five hundred dollars  or
imprisonment not to exceed ninety days, or both.

Section 26-613

Section 26-613

  §  26-613  Application.  This  chapter  is  enacted  pursuant  to  the
provisions of section four hundred sixty-seven-c of  the  real  property
tax law.

Section 26-614

Section 26-614

  §  26-614  Certain exemption orders. Notwithstanding the provisions of
this chapter, a tenant who resides in  a  dwelling  unit  which  becomes
subject  to  this  chapter  upon the sale by the city of New York of the
building in which such dwelling unit is situated may be  issued  a  rent
increase  exemption  order  for  increases in rent which occurred during
ownership of such building by the city of New York  provided  that  such
tenant  would  have  been  otherwise eligible to receive a rent increase
exemption order at the time of such increase but for the fact that  such
tenant  occupied  a  dwelling unit owned by the city of New York and was
therefore not  subject  to  this  chapter.  Application  for  such  rent
increase  exemption  orders  shall be made within one year from the date
such building is sold by the city of New York or within one year of  the
effective date of this provision, whichever is later.

Section 26-615

Section 26-615

  §  26-615  Certain  rent increases attributable to capital assessments
and voluntary capital contributions.  Notwithstanding  any  inconsistent
provision of law, whenever a rent increase exemption order/tax abatement
certificate is issued to an eligible head of the household residing in a
dwelling  unit  owned  by  a  housing  company  which  is subject to the
provisions of article II, IV, V or XI of the private housing finance law
entitling such eligible person to  an  exemption  from  an  increase  in
maximum  rent  attributable to a capital assessment or voluntary capital
contribution made prior to, on or  after  the  effective  date  of  this
section  and  such  person  later  transfers  his shares in such housing
company, such person shall be required  to  pay  over  to  such  housing
company,  or  such  housing company shall be entitled to deduct from the
amount to be paid to such person  for  the  sale  of  such  shares,  all
amounts  covered  by  such  rent  increase exemption order/tax abatement
certificate  which  are  attributable  to  such  capital  assessment  or
voluntary  capital  contribution. Such housing company shall not approve
the transfer of shares unless it has received the  payment  required  by
the  preceding  sentence  or made the deduction therein authorized. Such
housing company shall remit such amount to the commissioner  of  finance
within  ninety  days of the collection thereof. Payments due to the city
in accordance with this section shall be deemed a tax lien  and  may  be
enforced in any manner authorized for the collection of delinquent taxes
on real property.

Section 26-616.

Section 26-616.

  § 26-616. Notification of termination of certain mortgage. The housing
company  which  owns  any  dwelling subject to a mortgage insured by the
federal government pursuant to  section  two  hundred  thirteen  of  the
national housing act, as amended, shall notify the supervising agency of
the termination of such mortgage thirty days before such termination.

Section 26-617

Section 26-617

  Section  26-617  Eligibility for persons with disabilities. To qualify
as a person with a disability for  the  purposes  of  this  section,  an
individual  shall  submit  to  such  agency as the mayor shall designate
proof (as specified by regulation of such  agency  as  the  mayor  shall
designate)  showing  that  such individual is currently receiving social
security disability insurance (SSDI)  or  supplemental  security  income
(SSI)  benefits  under  the  federal  social  security act or disability
pension or disability  compensation  benefits  provided  by  the  United
States  department  of  veterans  affairs, or was previously eligible by
virtue of receiving disability benefits under the supplemental  security
income  program  or  the  social  security  disability  program  and  is
currently receiving medical assistance benefits based  on  determination
of  disability  as  provided  in  section three hundred sixty-six of the
social services law and whose income for the current  income  tax  year,
together  with the income of all members of such individual's household,
does not exceed the maximum income at which  such  individual  would  be
eligible  to  receive  cash  supplemental security income benefits under
federal law during such tax year.