The Tenant Protection Unit is an office which was established in February of 2012 by Governor Andrew Cuomo to protect the rights of tenants and reduce fraud by some building owners. Governor, can we get a Landlord Protection Unit to reduce fraud by some tenants?
Since its inception, the Tenant Protection Unit (TPU) re-regulated more than 25,000 units in New York City in only 1,100 audits in about 2,000 buildings. Building owners are being asked by TPU to hand over documentation of once rent regulated units that was used to remove units from rent regulation. Now all Individual Apartment Improvements (IAI) and Vacant Apartment Improvements must be well documented. Landlords now must keep formal records with contractors and all receipts must be itemized. A simple clerical error is sufficient to return an apartment to rent stabilization.
The Building owners who are targeted, but not limited to, are those that failed to register their buildings in the last four years with the Division of Housing and Community Renewal (HCR). Building owners have 30 days to respond to an audit by TPU and those who don’t comply are issued subpoenas. To date, TPU achieved full compliance from each and every landlord.
TPU and other advocates are now working on revising permanent rent increases made as a result of Major Capital Improvements (MCI) in a property. Currently, when a MCI is complete, a permanent rent increase may be established based on proper filing with the HCR the scope of the work. TPU and other advocates are moving to eliminate this rent increase once the MCI is paid off.
My suggestion to building owners is simple; make sure your i’s are dotted and your t’s are crossed. There are groups than can help building owners respond to these audits in an effective and efficient manner such as The Small Property Owners of New York (SPONY), Community Housing Improvement Program (CHIP), and Rent Stabilization Association (RSA) to name a few. There are also some prominent real estate attorneys that I can recommend to you. They are costly but it will be advantageous to you in the long run. There may be more on the TPU agenda, Stay tuned.