N.Y. Comp. Codes R. & Regs. Tit. 9 § 2202.19 - Alternative provision in lieu of rent decrease

(a) Whenever in the judgment of the administrator such action is necessary or proper in order to effectuate the purpose of the Rent Law, the administrator may, in lieu of decreasing the maximum rents as provided in sections 2202.16 and 2202.17 of this Part, enter into a contract wherein the landlord agrees in writing to deposit all income derived from the property, including income from spaces and accommodations not controlled, into an escrow or trust account supervised by the administrator, in accordance with the conditions imposed by the administrator, for use in maintaining or restoring essential services and equipment, for removing violations against the property or housing accommodations therein, for making such repairs as are necessary to remove a certification, from any city agency having jurisdiction thereof, that the housing accommodation is a fire hazard, or is in a continued dangerous condition or detrimental to life or health, or is occupied in violation of law, and/or for such other uses as the administrator deems necessary or proper for the preservation, repair or maintenance of the property.

(b) Where the landlord has entered into an escrow agreement as provided in subdivision (a) of this section, the administrator shall issue orders adjusting all controlled rents to the appropriate maximum rent, effective as of the first day of the month following the execution of such agreement; provided, however, that in the event the administrator shall determine that the landlord has breached such agreement, the administrator may issue orders:

(1) decreasing the maximum rent pursuant to such agreement;

(2) containing a directive that rent collected by the landlord in excess of the rent thus decreased be refunded to the tenants; and

(3) containing such other determinations and directives as are necessary to effectuate the purposes of this section.

(c) Notwithstanding any provision of these regulations to the contrary, whenever, in the judgment of the administrator, action as provided in sections 2202.16 and 2202.17 of this Part is necessary or proper in order to effectuate the purposes of the Rent Law or of these regulations, the administrator may, in lieu of decreasing the maximum rents, issue orders adjusting all controlled rents and directing that rents be paid into an escrow account supervised by the administrator for the uses stated in subdivision (a) of this section, where:

(1) the landlord fails to take corrective action after notice by the administrator of proposed action to decrease the maximum rents pursuant to sections 2202.16 and 2202.17 of this Part;

(2) the administrator has notified all mortgagees who have filed with the administrator a declaration of interest in such property and in such proposed action; and

(3) the landlord has failed for three consecutive months to collect any controlled rents or to commence court proceedings for their collection or, if such proceedings have been commenced, the landlord has not diligently prosecuted them or such proceedings have not resulted in judgment in favor of such landlord.

(d) Where the essential services, furnishings, furniture or equipment of any individual housing accommodation are reduced, impaired, mutilated or made unworkable as a result of neglect, failure to exercise due care or failure of the tenant to take practical precautions to prevent such condition, the landlord shall restore such services, furniture, furnishings or equipment and may make application for a temporary increase in the maximum rent based upon cost of such restoration. In the event of the failure of the tenant to make restitution within a reasonable time, as determined by the administrator, an order shall be issued adjusting the maximum rent for such tenant in an amount sufficient to recover the cost over 12 monthly installments or until the tenant surrenders possession, whichever is sooner. The provisions of this paragraph shall be in addition to all other rights and remedies of the landlord.

Notes

N.Y. Comp. Codes R. & Regs. Tit. 9 § 2202.19