SURCHARGES
Capital Improvement Surcharge
The landlord must apply to the Division of Rent Leveling before beginning any work that requests a Capital Improvement Surcharge. A capital improvement is the addition of new systems or major improvements that did not exist prior to the work, or work required pursuant to the State Uniform Safety Act. The landlord must apply to the Division of Rent Leveling before beginning any work that requests a capital improvement surcharge.
The tenant may request a hearing within fifteen (15) days of the Division Manager’s preliminary application receipt. Once the Rent Leveling Manager approves the preliminary application, the landlord may go on to complete the capital improvement. Either a tenant or a landlord may appeal the Manager’s preliminary approval decision to the Rent Leveling Board.
Substantial compliance certification and zoning compliance certification must be obtained by the landlord no more than sixty (60) days before filing of the capital improvement application, and must be filed with the application.
After completion of the capital improvement, the landlord must submit final approval documentation to the Division of Rent Leveling, prior to surcharge indication on yearly form given to tenant.
- No individual capital improvement surcharge can exceed 10% of the base rent
- The sum of all capital improvement surcharges cannot exceed 15% of the base rent
Hardship Surcharge
A landlord must own the dwelling at least twelve (12) months to apply for a hardship surcharge.
Whenever a landlord shall determine that the net operating expenses exceed 60% of the gross total income, i.e. net operating income (NOI), during the course of the previous twelve (12) month period, he may apply for a hardship surcharge.
Presuming that the rent(s) charged in the three (3) year base period yielded a fair net operating income, the operating expenses cannot have exceeded 60% of the gross income, including any surcharges, for any of the prior three (3) years.
The landlord must apply for a hardship surcharge on forms provided by the Division. Tenants must receive a copy of this form from the landlord either by personal service or by certified mail. The Division of Rent Leveling must receive all documentation required by Ordinance.
Substantial compliance certification and zoning compliance certification must be obtained by the landlord no more than sixty (60) days before filing of the hardship application, and must be filed with the application.
Calculation of the hardship surcharge:
Residential dwellings only:
Charged to a tenant based on his share of the total square footage in the building.
Mixed residential-commercial use:
The tenants will pay the proportionate share, as the net income derived from the residential units bears to the total income derived from the property. Once that ratio is achieved, the tenants then pay their portion of the total square of residential space.
Total Rehabilitation Surcharge
Before starting any work, a preliminary application and detailed report of work that will be done are required.
Before starting any work, a preliminary application and detailed report of work that will be done are required. An appropriate licensed professional must certify that at least two major systems (such as plumbing, electrical, HVAC and related structural needs) are in a state of disrepair.
Within two (2) weeks of the Manager of Rent Leveling’s preliminary approval of the application, the landlord must notify all tenants of this approval, and tenants must be given the first right of refusal to rent the rehabilitated dwelling. T
he tenant must be given three (3) months notice before the landlord begins the rehabilitation work, unless the tenant and landlord agree to an earlier acceptable date.
Once the rehabilitation is completed, the landlord must submit the final application forms. Upon the Rent Leveling Manager’s approval, the landlord may establish a new base rent according to the current market. Registration of the new rent must be filed with the Division within thirty (30) days of the unit’s rental.