Section 26-509. Application for rent increase exemptions and equivalent tax abatement for rent regulated property occupied by certain senior citizens or persons with disabilities

a.  Commencement  of  agency  jurisdiction.
    (1)  (i)  Notwithstanding  any  provisions  of  this  chapter  to  the
  contrary, the department of finance shall grant rent increase  exemption
  orders or tax abatement certificates to senior citizens pursuant to this
  section  and  applications  for such orders and certificates and renewal
  applications shall be made to the department of finance.
    (ii) Notwithstanding any provisions of this chapter to  the  contrary,
  such  agency  as the mayor shall designate (which agency may also be the
  department of finance) shall grant rent increase exemption orders or tax
  abatement certificates to persons with  disabilities  pursuant  to  this
  section  and  applications  for such orders and certificates and renewal
  applications shall be made to such agency.
    (2) The department of finance and such other agency as the mayor shall
  designate shall have the power, in relation to  any  application  for  a
  rent  increase  exemption  order or tax abatement certificate under such
  department's  or  agency's  jurisdiction,  to   determine   the   lawful
  stabilization rent, but shall not receive applications for adjustment of
  the  initial  legal  regulated  rent  pursuant to section 26-513 of this
  chapter.
    (3) The department of finance and such other agency as the mayor shall
  designate may promulgate such rules and regulations as may be  necessary
  to effectively carry out the provisions of this section.
    b.  Rent  increase  exemptions for certain senior citizens and persons
  with disabilities.
    (1) No increase in the legal regulated rent shall be collectible  from
  a  tenant to whom there has been issued a currently valid rent exemption
  order pursuant to this subdivision, except as provided in such order, if
  such increase is a lawful increase in the monthly legal  regulated  rent
  over  the rent legally payable on the eligibility date which is provided
  under a two year lease, or under such other  term  as  regards  dwelling
  units subject to the hotel stabilization provisions of this chapter, for
  an increase in rent:
    (i)  pursuant  to an order of the New York city rent guidelines board,
  or
    (ii) based upon an owner hardship rent increase order  issued  by  the
  state division of housing and community renewal.
    (2)  A  tenant is eligible for a rent exemption order pursuant to this
  section if:
    (i) the head of the household residing in the housing accommodation is
  sixty-two years of age or older or is a person with a disability, and is
  entitled to the possession or to the use  or  occupancy  of  a  dwelling
  unit.  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.

    (ii)  the aggregate disposable income (as defined by regulation of the
  department of finance) of all members of the household residing  in  the
  housing  accommodation whose head of the 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, per year, after deduction of federal,
  state and city income and social security taxes. For  purposes  of  this
  subparagraph,  "aggregate  disposable income" 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 the head of the household receiving benefits under
  this section whether received by the head of the household or any  other
  member of the household;
    (iii)  the  aggregate  disposable  income (as defined by regulation of
  such agency as the mayor shall designate) for  the  current  income  tax
  year   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. For purposes of
  this subparagraph, "aggregate disposable income" 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 the head of the household receiving  benefits  under
  this section, whether received by the head of the household or any other
  member of the household.
    (iv) (a) in the case of a head of the household who does not receive a
  monthly  allowance  for shelter pursuant to the social services law, the
  maximum rent for the housing  accommodation  exceeds  one-third  of  the
  aggregate  disposable  income,  or  subject to the limitations contained
  within  item  (c)  of  subparagraph  (i)  of  paragraph  three  of  this
  subdivision,  if  any expected lawful increase in the maximum rent would
  cause such maximum rent to exceed one-third of the aggregate  disposable
  income; or
    (b)  in  the  case  of  a head of the household who receives a monthly
  allowance for shelter pursuant to the social services law,  the  maximum
  rent  for  the  housing  accommodation exceeds the maximum allowance for
  shelter which the head of the household is entitled to receive  pursuant
  to  the  social  services  law,  or subject to the limitations contained
  within  item  (c)  of  subparagraph  (i)  of  paragraph  three  of  this
  subdivision,  if  any expected lawful increase in the maximum rent would
  cause such maximum rent to exceed  the  maximum  allowance  for  shelter
  which the head of the household is entitled to receive.
    (3)  (i)  A  rent  exemption  order pursuant to this subdivision shall
  provide:
    (a) in the case of a head of the household  who  does  not  receive  a
  monthly  allowance for shelter pursuant to the social services law, that

  the landlord may not collect from the tenant to whom it is  issued  rent
  at  a  rate  in  excess  of either one-third of the aggregate disposable
  income, or the rent in  effect  immediately  preceding  the  eligibility
  date, whichever is greater; or
    (b)  in  the  case  of  a head of the household who receives a monthly
  allowance for shelter pursuant to the  social  services  law,  that  the
  landlord  may not collect from the tenant to whom it is issued rent at a
  rate in excess of either the maximum allowance  for  shelter  which  the
  head  of  the  household  is  entitled to receive, or the rent in effect
  immediately preceding the eligibility date, whichever is greater; and
    (c) that the landlord may collect from the tenant  increases  in  rent
  based  on  an electrical inclusion adjustment or an increase in dwelling
  space, services or equipment.
    (ii) Each such order shall expire upon termination of occupancy of the
  housing accommodation by the tenant to whom it is issued.  The  landlord
  shall  notify the department of finance in the case of a household whose
  eligibility for such order is based on the fact that the  head  of  such
  household  is  sixty-two  years  of  age or older, or such agency as the
  mayor shall designate in the case of a household whose  eligibility  for
  such  order  is  based  on the fact that the head of such household is a
  person with a disability, on a form to be prescribed by such  department
  or agency, within thirty days of each such termination of occupancy.
    (iii)  When  a rent reduction order is issued by the state division of
  housing and community renewal, the amount  of  the  reduction  shall  be
  subtracted  from the rent payable by the tenant specified in a currently
  valid rent exemption order issued  pursuant  to  this  subdivision.  The
  landlord  may  not  collect  from the tenant a sum of rent exceeding the
  adjusted amount while the rent reduction order is in effect.
    (4) Any landlord who collects, or seeks to collect  or  enforce,  rent
  from a tenant in violation of the terms of a rent exemption order shall,
  for  the  purposes  of all remedies, sanctions and penalties provided in
  this chapter, be deemed to have collected or  attempted  to  collect  or
  enforce, a rent in excess of the legal regulated rent.
    (5)  A rent exemption order shall be issued to each tenant who applies
  to the department of finance in the case of a tenant  who  is  sixty-two
  years  of age or older or to such agency as the mayor shall designate in
  the case of a tenant who is a person with a  disability,  in  accordance
  with  such  department's  or  agency's applicable regulations and who is
  found to be eligible under  this  subdivision.  Such  order  shall  take
  effect  on  the  first  day  of  the  first  month after receipt of such
  application by the department of finance or such  agency  as  the  mayor
  shall  designate,  except  that where there is any other increase in the
  legal regulated rent within ninety days of the  issuance  of  the  order
  increasing the tenant's maximum rent which a tenant is not exempted from
  paying,  the  rent  exemption  order  shall without further order of the
  department of finance or such agency as the mayor shall  designate  take
  effect  as  of  the effective date of said order increasing the tenant's
  rent including any retroactive increments collectible pursuant  to  such
  order.
    (6)  A rent exemption order shall be valid for the period of the lease
  or renewal thereof upon application by the tenant; provided,  that  upon
  any  such  renewal  application  being  made  by  the  tenant,  any rent
  exemption order then in effect with respect  to  such  tenant  shall  be
  deemed  renewed  until  such  time  as the department of finance or such
  agency as the mayor shall designate shall have found such tenant  to  be
  either eligible or ineligible for a rent 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  exemption  order,  such
  tenant  shall  be  liable  to  the  owner for the difference between the
  amounts  the  tenant  has paid under the provisions of the automatically
  renewed order and the amounts which the tenant would have been  required
  to  pay  in  the  absence of such order. Any rent exemption order issued
  pursuant to this subdivision shall include provisions giving  notice  as
  to the contents of this paragraph relating to automatic renewals of rent
  exemption  orders  and  shall  include provisions giving notice that the
  tenant must enter into either a one or two year renewal lease  in  order
  to  be  eligible  for  a  rent  exemption.  The  notice that each tenant
  receives from the owner relating to the right to a renewal  lease  shall
  contain  similar information. Any application or renewal application for
  a rent exemption order shall also constitute an application  for  a  tax
  abatement  under  such section. The department of finance and such other
  agency as the  mayor  shall  designate  may,  with  respect  to  renewal
  applications  by  the  tenants  who  have  been  found eligible for rent
  exemption orders, prescribe a simplified form including a  certification
  of the applicant's continued eligibility in lieu of a detailed statement
  of income and other qualifications.
    (7)  Notwithstanding  any  other  provisions  of law, when a head of a
  household to whom a then current, valid rent exemption  order  has  been
  issued  under this chapter, chapter three or chapter seven of this title
  moves his or her principal  residence  to  a  subsequent  dwelling  unit
  subject  to regulation under this chapter, the head of the household may
  apply to the department of finance or such other  agency  as  the  mayor
  shall  designate  for  a rent exemption order relating to the subsequent
  dwelling unit, and such order may provide that the head of the household
  shall be exempt from paying that portion of the legal regulated rent for
  the subsequent dwelling unit which is the least of the following:
    (i) 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;
    (ii) 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 or section 26-605 of
  this title; or
    (iii) where the head of the  household  does  not  receive  a  monthly
  allowance for shelter pursuant to the social services law, the amount by
  which  the  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 section.
    (8)  (i) When a dwelling unit subject to regulation under this chapter
  is later reclassified to a dwelling unit  subject  to  regulation  under
  chapter  three of this title, the eligibility of a head of the household
  to receive a rent increase exemption order  upon  such  reclassification
  shall  be governed by paragraph eight of subdivision m of section 26-405
  of this title.
    (ii) When a dwelling unit subject to regulation under this chapter  is
  later  reclassified  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,  the  eligibility  of a head of the household to receive a rent

  increase exemption order upon such reclassification shall be governed by
  section 26-605.1 of this title.
    (9)  Notwithstanding any other provision of law to the contrary, where
  a head of household holds a current, valid  rent  exemption  order  and,
  after  the  effective  date  of  this  paragraph,  there  is a permanent
  decrease in aggregate disposable  income  in  an  amount  which  exceeds
  twenty  percent  of  such  aggregate disposable income as represented in
  such head of the  household's  last  approved  application  for  a  rent
  exemption  order  or for renewal thereof, such 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 aggregate disposable income which  existed  at
  the  time  of  approval of such head of the household's last application
  for a rent exemption order or for renewal  thereof;  provided,  however,
  that in no event shall the amount of adjusted rent be redetermined to be
  (i)  in  the  case  of  a  head  of the household who does not receive a
  monthly allowance for shelter pursuant to the social services law,  less
  than  one-third  of the aggregate disposable income; or (ii) in the case
  of a head of the household who receives a monthly allowance for  shelter
  pursuant  to such law, less than the maximum allowance for shelter which
  such head of the household is entitled to receive pursuant to the social
  services law. For purposes of this paragraph, a  decrease  in  aggregate
  disposable  income  shall  not  include  any  decrease  in  such  income
  resulting from the manner in which such income is calculated pursuant to
  any amendment to paragraph c of subdivision one of section four  hundred
  sixty-seven-b  of  the  real  property  tax  law,  any  amendment to the
  regulations of the department of finance made on or after the  effective
  date  of  the  local law that added this clause, or any amendment to the
  regulations of such other agency as the mayor shall designate made on or
  after October tenth, two thousand five. For purposes of this  paragraph,
  "adjusted  rent"  shall  mean  legal  regulated rent less the amount set
  forth in a rent exemption order.
    c. Tax abatement for properties subject to rent exemption order.
    (1) Tax abatement, pursuant to the provisions of section four  hundred
  sixty-seven-b  of  the  real  property  tax  law,  shall be granted with
  respect to any real property for which a rent exemption order is  issued
  under  subdivision  b  of  this  section  to  the  tenant of any housing
  accommodation contained therein. The rent  exemption  order  shall  also
  constitute the tax abatement certificate.
    (2)  The  real  estate  tax imposed upon any real property for which a
  rent exemption is issued, shall be reduced and abated by an amount equal
  to the difference between:
    (i) the sum of the maximum rents collectible under such orders, and
    (ii) the sum of rents that would be collectible from  the  tenants  of
  such housing accommodations if no exemption had been granted pursuant to
  subdivision b of this section.
    (3)  For  any  individual  housing  accommodation,  the  tax abatement
  computed pursuant to this subdivision shall be available with respect to
  a period commencing on the effective date of the initial rent  exemption
  order,  and  ending  on  the  expiration  date  of  such order or on the
  effective date of an order terminating the rent exemption.
    (4) Prior to the commencement of each fiscal year, the  department  of
  finance  shall  determine  the  total amount of taxes to be abated under
  this section with respect to each  property  for  which  rent  exemption
  orders granted to persons sixty-two years of age or older were in effect
  for  all  or  any  part  of  the  preceding  calendar year. Prior to the
  commencement of each  fiscal  year,  such  agency  as  the  mayor  shall
  designate  shall  determine and, if such agency is not the department of

  finance, shall notify the department of finance of the total  amount  of
  taxes  to be abated under this section with respect to each property for
  which rent exemption orders granted to persons with disabilities were in
  effect  for  all  or  any  part  of  the  preceding  calendar  year. The
  commissioner of finance shall make the  appropriate  adjustment  in  the
  real estate tax payable in such fiscal year.
    (5) Tax abatement pursuant to this section shall be in addition to any
  other  tax abatement authorized by law, but shall not reduce the tax for
  any fiscal year  below  zero.  In  the  event  that  the  tax  abatement
  certificate  authorizes  an  amount  of  deduction in excess of the real
  estate installment, then the balance may be applied  to  any  subsequent
  installment  until exhausted. In such a case the owner shall submit with
  his or her real estate tax bill and remittance, a verified statement  in
  such form as prescribed by the commissioner of finance setting forth the
  carry over amount and the amounts previously applied; provided, however,
  that at the request of the owner such balance shall be paid to the owner
  by  the  commissioner  of  finance  in  lieu  of  being  applied  to any
  subsequent installment, except where the owner  is  in  arrears  in  the
  payment  of  real estate taxes on any property. For the purposes of this
  paragraph, where the owner is a corporation, it shall be deemed to be in
  arrears when any of the officers, directors or  any  person  holding  an
  interest in more than ten percent of the issued and outstanding stock of
  such  corporation  is  in arrears in the payment of real estate taxes on
  any property; where title is held by  a  nominee,  the  owner  shall  be
  deemed  to be in arrears when the person for whose benefit such title is
  held is in arrears in the payment of real estate taxes on any property.
    d. 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.
    * NB Expires April 1, 2012