Individual Apartment Improvement Change to Law
As of October 17, 2024 the Law regarding Individual Apartment Improvement (IAI) increases will change. The Law will establish two different methods for applying for IAI rent increases.
Under the first method, any owner can recover up to $30,000 of IAI eligible work over a 15-year period. This cap was increased from the $15,000 limit over a 15-year period, established by the Housing Stability and Tenant Protection Act of 2019. In addition, the rent increase is now permanent.
The permitted increases in legal rent are calculated the same way as they were in the Housing Stability and Tenant Protection Act of 2019 (HSTPA). In a building that contains 35 units or less the permitted rent increase in Legal Regulated Rent is 1/168th of the total cost incurred by owner for IAI increases. In a building of more than 35 units the permitted increase is 1/180th of the cost of the improvement.
Under the second method, there is a new IAI cap of $50,000 for vacant apartments that were timely registered as vacant with DHCR in the 2022, 2023, and 2024 registration cycles, or which became vacant and the tenant immediately prior to such vacancy was in occupancy for 25 years or longer. This method requires prior certification for eligibility from DHCR. The rates of the increases are different from the above listed rates. For a building with 35 or fewer units the allowable increase is 1/144th and a building with more than 35 units the allowable increase is 1/156th. The increase is permanent.
The following new procedures for the second method are also being put into effect:
Prior to undertaking the IAI, the owner must submit to DHCR evidence demonstrating that the improvement was necessary due to a substandard condition or exceeding an item’s useful life, photos of areas, aspects, or appliances that will be improved, and any necessary permits required to undertake the improvements.
The owner(s) filing the application must submit an affirmation that they are free and clear of any DHCR or a court of competent jurisdiction findings of Harassment or willful Rent Overcharge within the previous five years in all rent regulated buildings they own.
After installation of the IAI, the owner must pay a fee equal to one percent of the claimed IAI costs and submit to DHCR evidence that the work was completed, including photos of the completed work, itemized receipts, and proof of payment.
Please call Central Astoria with any questions at 718-204-1056