Property Manager supports the funding program Rent Regulation (RCS). This program is prominent in New York City and is growing as an option for other communities as well. The program provides protections to tenants in addition to limitations on the amount of rent charged. Tenants are entitled to receive required services, have their leases renewed, and may not be evicted except on grounds allowed by law. Leases may be renewed for a term of one or two years, at the tenant's choice. If a tenant's rights are violated, DHCR (Division of Housing & Community Renewal - New York State) can reduce rents and levy civil penalties against the owner. Rents may be reduced if services are not maintained. In cases of overcharge, DHCR may assess penalties of interest or damages payable to the tenant.
The funding program has conventional compliance behavior with restrictions on rent increases as dictated by DHCR.
If a Tax Credit Funding Program also exists, the annual certification requirements of the Tax Credit Funding Program will operate independently of the RCS Lease Renewal process when the annual occurs in the middle of a lease period.
If the Tax Credit Funding Program Annual Recertification or Self Certification Update (Occupancy and Compliance Detail > Non-Financial/Self Certification tab), and the Annual Recert or Self Cert and the Lease Renewal fall on the same date, then the Lease Renewal is the only task to be done and it will advance the next recertification date.
When households are in both a Tax Credit Funding Program and the Rent Regulation Funding Program, households will never be dropped from the Occupancy and Compliance Detail > Leases tab because the lease is the main compliance tool for the Rent Regulation Funding Program.
There are no Income Eligibility Requirements for households moving into a Rent Regulated unit, but you still have the ability to enter their Income & Expense worksheet information.
There are no compliance Mins or Maxes.
There are specific forms for the Vacancy Lease at Move-In, as well as for the Lease Renewal.
The Lease Renewal is the primary certification after Move-In.
There is no annual recertification process.
Sample RCS documents are included at BP Standard Documents - NYC Rent Regulation Specific Documents
There is an annual transmission requirement to DHCR, but this does not involve transmitting certifications.
Rent Calculations at move-in at lease renewal is dictated by the Rent Guidelines Board of DHCR.
Rent Change changes at lease renewal or unit turnover.
Gross Potential Method should be set to Actual Billed Rent + Subsidy or Actual Billed Rent + Subsidy w/ Vacancy.
Vouchers are allowed in a Rent Regulated Funding Program.
See discussions below regarding SCRIE and DRIE vouchers specific to Rent Regulation.
Rent Plans are not required for DHCR, but setting up Rent Plans with Market Rents would allow the owner to carefully set rents at levels below what is legally allowed (preferential rents) when necessary.
It is unlikely that waitlists would be used at a Rent Regulated property.
When RCS Rules Apply, the funding program has conventional compliance behavior with restrictions on rent increases as dictated by DHCR.
Property Manager maintains Rent Regulation (RCS) Jurisdictions. The main Jurisdiction being New York City.
Jurisdictions are assigned to Contracts at the Community Detail > Contract tab, and units are assigned to a Contract with the Add New Units task from the Community Detail > Facilities tab.
Jurisdictions are used to assign Rent Class Delta Limits.
Property Manager maintains Rent Class Delta Limits that are stored in Property Manager by RCS Jurisdiction by effective date.
These Rent Class Delta Limits are what the owner of a community may charge based on guidelines promulgated by the applicable Rent Guidelines Board.
DHCR Fact Sheet 26 - Guide to Rent Increases for Rent Stabilized Apartments in New York City
The Rent Class Delta Limits are broken down for 1 year & 2 year leases and for when the owner provides heat or not as part of the lease.
Past DHCR Orders for prior Rent Class Delta Limits are kept in Property Manager to handle any retroactive activity that may occur, and new DHCR Orders for the next Rent Class Delta Limits will be loaded to Property Manager when they are made available.
Different Types of Rent Increases include:
Vacancy Lease Rent Increases - when a household rents a vacant unit for the first time.
Renewal Lease Rent Increases - household signs a renewal lease for the unit currently occupied.
Major Capital Improvement (MCI) Rent Increases that are approved by DHCR for building-wide improvements made in the community.
Individual Apartment Improvement (IAI) Rent Increases not requiring DHCR approval for improvements (i.e. - install a new appliance) made to a specific unit.
Amenities rented in a Rent Regulated funding program are also subject to rent increase guidelines of DHCR.
When a Rent Regulation (RCS) Funding Program is created for your database. The “RCS Funding Program supports Rent Stabilization.
Rent Regulation (RCS) Funding Programs have two layers (Community Detail > Contract tab, Income Layers data window).
Rent Stabilization or
Exempt
The Exempt layer is used for units that are involved with Rent Regulation, but not under Rent Stabilization (Rent Controlled units or exempt units)
The Exempt layer is the “ineligible layer”.
Units will be moved into the Exempt layer when they are no longer Rent Regulated.
Vacant Units are deregulated when they rent reaches a certain upper limit (currently $2,000).
Units are deregulated when the households living in the unit have annual income exceeding a certain limit (currently $175,000) for each of the two preceding calendar years and the rent charged has reached a certain upper limit (currently $2,000).
Property Manager supports a Rent Calculation Method for the Rent Regulated Funding Program. This method supports calculation of rents for Vacancy Leases and Lease Renewals, and incorporates increases due to MCI’s, IAI’s, etc.
Property Manager maintains unit level information that is stored for each unit that is in a Rent Regulation Funding Program to ensure that rent is calculated according to regulations and that the proper annual reporting is provided for to DHCR.
Among other things, the unit level data to be maintained includes:
If there is an exemption, that unit’s exemption effective date.
Whether the exemption is temporary or permanent.
Legal Rent
Actual Rent
If unit is restricted to 421a rent.
Property Manager maintains household level information that is stored for each household living in a Rent Regulated Unit.
New certification forms have been added for Rent Regulation and will be on the Household Detail > Transactions tab.
For a Move-in (MI), this certification form is the Rent Stabilization Lease Rider (RA-LR1).
For a Lease Renewal (LR), this certification form will display the Renewal Lease Form. (RTP-8)
Gross Rent Change (GR) (i.e. - from an MCI Increase applied to a unit, from an IAI Increase applied to a unit, from rent reduction applied to a unit), this certification form will display a calculation from the Prior Legal Rent and adjustments applied to get to the New Legal Rent.
Property Manager handles SCRIE and DRIE vouchers through outside vouchers setup at System Administration > Maintain Lookup Tables - Vouchers. A new parameter has been added to the Voucher Source Details to mark the outside voucher as “SCRIE/DRIE”
DHCR Fact Sheet 21 - Special Rights of Senior Citizens (SCRIE)
DHCR Fact Sheet 20 - Special Rights of Disabled Persons (DRIE)
When an SCRIE or DRIE outside voucher is added to a household using the Add/Modify/Terminate Voucher task on the Household Detail > General tab, the “subsidy side” will create a GL Entry to record the Tax Abatement Credit (TAC) without creating a subsidy open item on the household.
Merge Fields under System Administration > Maintain Documents are available to allow for the proper reporting on leases created under the Rent Regulation Funding Program
lawful_sept30_rent_increase_adj_1yr
lawful_sept30_rent_increase_adj_2yr
lawful_regulated_rent_1yr
lawful_regulated_rent_2yr
signed_ind
heat_included_ind
RCS_pref_rent_ind
notice_sent_date
voucher_rent_amt (SCRIE/DRIE)
section4_total
new_1yr_rent_plus_section4
new_2yr_rent_plus_section4
The conversion process to bring new communities onto Property Manager has been updated to bring on communities with Rent Regulation Funding Programs.
Historic MCI data can be entered for each Rent Regulated unit.
Ability to enter Other Scheduled Charges for households living in the unit at the conversion date.
Ability to enter required data for calculating rent at conversion date and setting up rent increases for the next lease renewal.
Users will have control over certain community specific Rent Regulation (RCS) options on the following Community Detail tabs:
As with other supported Funding Programs, for Rent Regulation you can choose an Application Form, Lease Form, enter a Class Code to be used for Accounting purposes, and select an NSF Charge Code.
Two Security Deposit Methods specific to Rent Regulation are available:
One Month Legal Rent
Two Month's Legal Rent
Lease Parameters are also maintained for Rent Regulation Funding Programs as they are for other supported Funding Programs.
The Financial Rounding Method can also be set for Rent Regulation Funding Programs.
For Rent Regulation Funding Programs, a Contract basically relates to a specific building in a community.
The Contract tab contains data stored for each building that is considered when calculating rent increases and to meet annual reporting requirements to DHCR.
Location Details
Registration Number (MDR)
Jurisdiction
County
Municipality - only applicable if outside New York City
R.E. Tax Block
IAI Rent Adj. Fraction
Building Address Details (for DHCR Reporting)
Owner Pays Heat Parameter
Contract Details
Multiple Dwelling Class (either A for permanent residents or B for transient residents)
Parameters for Hotel, Single Room Occupancy, Garden Apt. Complex, 421A, PHFL Section 11, PHFL Section 608, Article 11, Article 14 & 15, and Sec. 11-243/11-244 (J-51)
Owner Name (for DHCR Reporting)
Building Manager Name (for DHCR Reporting)
Income Layers - either Rent Stabilization or Exempt
Rent Plan functionality in Property Manager is available to the Rent Regulated Funding Program. Setting up Rent Plans allows the owner to carefully set rents at levels below what is legally allowed.
Community Detail > MCI tab
This tab displays Major Capital Improvement (MCI) for the activity for a Contract (building) for the community in context.
From here you can use the following tasks to:
Add MCI Request - create a new MCI Request to be tracked
Maintain MCI Request - make changes to an existing MCI Request and to also mark it as approved
Delete MCI Request
Apply MCI Rent Increase - to apply the Rent Increase for an approved MCI Request to all units in the Contract (Building)
In order for this task to complete successfully, you must have entries in the "Nbr RS Rooms" field on the Unit Detail > General tab.
Building details needed for filing MCI paperwork is entered on the Community Detail > Contract tab.
Retroactive increases due to MCI’s are billed at move-out if they haven’t been fully billed out while the tenant lived in the unit.
The Unit Address data window on this tab has been modified with new fields to enter Rent Regulation Street Number, Street Name and Street Suffix.
The information entered here is used on the Community Detail > MCI and Community Detail > Contract tabs.
This information is also used for the annual reporting requirements to DHCR.
The General Information data window on this tab includes a field for “Nbr. RS Rooms”.
This is the number of rooms a unit has for MCI calculation purposes. You will not be able to Apply MCI Rent Increase to a unit that does not have an entry in this field.
The Rent Plan data window displays the values from the current Lease Rider for the household currently occupying the unit.
This tab presents the user with what rent will look like for the current tenant of a unit on their next renewal, as well as what rent would look like with a vacancy lease for a new tenant.
The forecast is only available if the Rent Guidelines Board has released its order covering the future period. If it is not available, you will see the message: “There is no forecast information for the specified date.”
The data in the Lease Renewal Forecast is based on the current lease.
The Vacancy Lease Forecast can be adjusted for any given date you select so that you can see what rent will calculate based on the move-in date you set.
The Rent Forecast tab will also display the MCI Increases that have impacted or will impact the unit selected in Context.
You can use the Add Fixed Asset to Unit task to add a fixed asset (IAI - Individual Apartment Improvements, DHCR Fact Sheet 12 - Rent Adjustments for New Services, New Equipment or Improvements to an Apartment) to a unit that can result in an increase in the tenant’s rent. For units in the Rent Regulation Funding Program you have the option have the new fixed asset addition cause a rent increase by setting the installation date, entering a delivery and installation cost (in addition to the purchase price).
The monthly increase is calculated as 1/40th of the purchase price plus the cost of delivery and installation.
You have the ability to mark the Rent Increase as estimated. With this flag set:
An “Est.” check box will show for the unit on the Occupancy and Compliance > Manage Vacancies tab alerting the user to the fact that the rent shown isn’t final.
The Rent Regulation settings are also available in the Maintain Selected Fixed Asset task.
A new task, Apply Rent Increase to Unit, is available to apply this increase to the household living in the unit.
The Lease Information data window on the Household Detail > General tab has been updated to show future lease information if it is available. If the household is a successor, this data window will indicate the type of succession lease being utilized.
The Rent Information data window will display the Preferential Rent, if applicable, and the Legal Rent.
While no specific functionality has been added regarding Window Guards (DHCR Fact Sheet 25 - Window Guards), the existing Manage Reasonable Accommodations task can be used to track any Window Guards that have been added to a household.
Be sure to add Window Guard to the System Administration > Maintain Lookup Tables - Reasonable Accommodations table.
A scheduled miscellaneous charge type should be added at System Administration > Accounting Setup - Charge Type Setup described as “Window Guard” to charge the tenant the requisite charge for the Window Guards added to their unit with the Add New Scheduled Receivable task on the Household Detail > Accounting > Receivables tab.
Move-Ins - from the Occupancy and Compliance > Manage Vacancies tab or from the Household Detail > General tab
Planned Rent 1 and Rent 2 have been added to the Occupancy and Compliance > Manage Vacancies tab. Rent 1 comes from the Rent Plan for the Community/Funding Program, and Rent 2 is the forecasted legal rent for a 1 year lease if the tenant were to move in today.
There is no Income Eligibility Requirements for households moving into a Rent Regulated unit, but you still have the ability to enter their Income & Expense worksheet information.
In the Schedule Move-In/Transfer Certification task, you have the ability to schedule Amenities to coincide with the move-in. Amenities (i.e. - Parking) that are rented to a household moving into a Rent Regulated unit will be subject to rent increase guidelines of DHCR.
The Create Move-In/Transfer Certification task allows you:
Collect the lease term selected by the new tenant.
Enter a Preferential Rent (DHCR Fact Sheet 40 - Preferential Rent), specifying whether it is in effect for the term of the lease or the term of the tenancy and entering the amount of the Preferential Rent.
From the Create Move-In/Transfer Certification task you also have the ability to add recurring charges for monthly charges in addition to rent.
In order for a Charge Type to be available, you need to set the parameter “Display on Move-in/Renewal” parameter from the Insert Charge Type or the Maintain Charge Type task from System Administration > Accounting Setup - Charge Type Setup.
You are required to set the Separate Charge Group parameter from these tasks to specify the charge type as:
None
A/C Electric
Non A/C Electric
Ancillary
Ancillary in this context is reserved for future use. An Ancillary Service is considered parking or a garage and should be set up as an Amenity and not charged to a household through as scheduled item that is not setup as an amenity.
Other
Default Amounts added to the new charge type will populate the Amount field in the Create Move-In/Transfer Certification task when these charge types are selected.
For lease terms, you can select 1 or 2 year terms, with the end of the term defaulting to the end of the anniversary month.
You can change the ending date for the lease, but it must be between the end of the previous month and the end of the current/anniversary month.
The Security Deposit method can be set at either One Month Legal Rent (usual setting) or Two Month’s Legal Rent. This parameter is set at the Community Detail > Program Info tab.
As with other funding programs the security deposit will be created at move-in.
Security Deposit will be based on Legal Rent even if a Preferential Rent is given to the tenant.
Unlike other funding programs, the security deposit will be increased at the Lease Renewal to be equal to the new Legal Rent for the unit.
You can set an override for 1 and 2 year Security Deposits, if necessary.
Values in these fields must be between zero and the related Legal Rent values.
The values entered here will flow into the additional deposit required fields on the lease form on the Household Detail > Transactions tab.
The appropriate lease document, either a Renewal Lease or a Vacancy Lease will be printed at Move-In at the end of the Create Move-In/Transfer Certification task.
You have the ability to attach documents (if enabled at System Administration > Maintain Lookup Tables - Business Constants) to the certification that will be created on the Household Detail > Transactions tab at the end of this task.
Lease Renewals - from Occupancy and Compliance Detail > Leases Tab
The Lease Process is similar to the process in Property Manager for other Funding Programs. A column has been added to the Occupancy and Compliance Detail > Leases tab in the Create Lease To-Do List Activity to indicate if a tenant is currently receiving a Preferential Rent.
When using the Lease Renewal or Batch Lease Renewal (Rent Regulated) tasks, you have the ability to enter the Date a lease renewal notice has been sent.
For Rent Regulation there isn’t a separate Send Notice or Reprint Notices task since sending a new lease is considered as notice to the tenant.
Also, the Notes column will display notes specific to the Rent Regulation Funding Program. I.e. -
Generate Regulated Lease
Succession - Renewal OK
Succession - Needs Vacancy Lease (Second Succession)
Etc.
The Rent Increase that is calculated is based on the DHCR Order from the Rent Guidelines Board in affect with the Lease Renewal, and will also be adjusted for any MCI’s, IAI’s, Rent Reduction Orders, Rent Overcharges, etc.
Note that Rent Reduction Orders and Rent Overcharges are handled by setting up a Rent Concession Charge Type at System Administration > Accounting Setup - Charge Type Setup to be used to reduce the rent for the specified period of time.
Rent increases for amenities (i.e. - Parking) that are rented to a household living in a Rent Regulated unit will be subject to rent increase guidelines of DHCR.
The security deposit (Household Detail > Accounting > Deposits) will be increased at the Lease Renewal to be equal to the new Legal Rent for the unit.
You also have the ability to renew more than one lease at a time using the Batch Lease Renewal (Rent Regulated) task.
The task will show each tenant, meeting the Date Range criteria, and that tenant’s Lawful Rent, Current Rent and the Market Rent.
You have the ability to set the rent for each tenant listed and the amounts for other recurring charges that are to be renewed with the new list.
There will be an indication for each tenant that is receiving a Preferential Rent.
Please note the “Show Rent Only” check box only hides the rows for other charges. Any changes made to those rows before they were hidden will be made when you click Next to this step in the task.
You also have a batch process for signing more than one lease at a time with the Sign Multiple Leases task that allows you to sign each lease or mark it as Deemed (tenant is unable to sign or hasn’t returned a signed lease within the allotted 60 days), and to set the lease term as a 1-Year Lease or 2-Year Lease.
Preferential Rents
A preferential rent is a rent that an owner agrees to charge that is lower than the legal rent that the owner could lawfully collect. Owners can decide to terminate the preferential rent and charge the higher legal rent upon renewal of the lease or when that tenant permanently vacates the apartment. DHCR Fact Sheet 40 - Preferential Rent
When a preferential rent is give to a tenant (at move-in or at lease renewal), the resulting lease will mention that the rent being charged is a preferential rent and detail what the legal rent is. The lease will also spell out how long the preferential rent is good for (only during the lease period or for the entire tenancy).
When using the Lease Renewal, the new One Year and Two Year Rent for the tenant that has the Preferential Rent will now increase the Preferential Rent by the same percentage increase that the Legal Rent is subject to.
When another Funding Program exists with the Rent Regulation Funding Program (i.e. - Tax Credit) and that Funding Program has lower rent restrictions than Rent Regulation, then the lower rent charged to a household will show as a Preferential Rent for Rent Regulation.
Succession
The Remove Member task on the Household Detail > Members tab (or a related task where Member information can be updated) has been updated when the head of household is being removed from a Rent Regulated unit. At the end of the task, the user will be prompted if the head of household change is a succession situation (DHCR Fact Sheet 30 - Succession Rights). If it is a succession, the new head of household is entitled to a Lease Renewal or can be given a Vacancy Lease.
If the Succession Status is set to Renewal Lease, the household enters the renewal lease process normally on the Occupancy and Compliance Detail > Leases tab.
The Succession Status will remain as Renewal Lease until the household moves out of the unit.
If the Succession Status is set to Vacancy Lease, the household enters the renewal lease process normally on the Occupancy and Compliance Detail > Leases tab, but the vacancy lease percentages will be used to calculate the rent increase instead of the lease renewal percentages.
Once the first Lease Renewal has been completed, the succession status will be set back to none.
A new task has been added to the Occupancy and Compliance Detail > Leases tab to Modify Succession Status. The task allows you to change the type of succession between “Succession - Renewal OK” and Succession - Needs Vacancy Lease” and vice-versa.
When in the Maintain Signed Dates task (or other related task), there is an option for no signature and you can select the “No Signature, Deemed Lease” parameter to indicate that there was no tenant signature, but we still have a lease in affect.
The Mark as Transmitted, Undo Transmission and Insert New Transaction tasks are not available under the Rent Regulation Funding Program.
If you need to enter a Rent Reduction Order for a Household (DHCR Fact Sheet 14 - Rent Reductions for Decreased Services), you can add a Rent Concession Scheduled Item to the household using the Add New Scheduled Receivable task.
You can add a new Rent Concession Charge Type at System Administration > Accounting Setup - Charge Type Setup using the Insert Charge Type task and describe it as “Rent Reduction Order” for example. Be sure to select the "Display on Move-In/Renewal" parameter to that it appears in the list of available Recurring Charges in the related tasks.
Move-Outs
Rent for a unit will not change until Move-In of the next tenant, but the Unit Detail > Rent Forecast tab will display the Vacancy Lease Calculation. See discussion under Unit Specific Options above.
You have the ability to set a parameter when adding non-certified scheduled items to a household with the Add New Scheduled Receivable task on the Household Detail > Accounting > Receivables tab. When you set the Expiration Method to Total Due with an amount entered, select the “Bill Remaining Due at Moveout” parameter, when the move-out is confirmed, any remaining balance due on that schedule will be billed to the tenant.
The Move-Out (MO) Certification on the Household Detail > Transactions tab does not have an associated Form and you will see the message “Form Detail Not Found” when you select the Rent Regulation form on the move-out.