As of the end of 2023, a significant piece of legislation in New York State has solidified the rights of rent-stabilized tenants and closed the chapter on the notorious "Frankenstein" loophole, allowing landlords to increase rents by combining apartments. While the bill, known as S2980-C, has received Governor Kathy Hochul's signature, the final wording is still being negotiated through a chapter amendment process.

The legislation, sponsored by State Senator Brian Kavanagh and Assemblymember Linda Rosenthal, aims to eliminate avenues for landlords to deregulate individual apartments or entire buildings, empower tenants to challenge illegal rent hikes, and refine the process for a tenant's family member to inherit a rent-stabilized lease.

Here are five key aspects of the bill in its current form:

1. Frankenstein Apartments and First Rent:

• ·      "Frankenstein" apartments, formed by combining two rent-stabilized units, were previously used by landlords to circumvent rent-stabilization rules. The legislation reaffirms a rule change from November, capping rents on newly combined units at the total of the two previous units.
• Units created from at least one rent-regulated apartment will now also become regulated.

     2. Fraud in Court Cases:

• The legislation allows tenants alleging fraud to look back further into an apartment's rent history.
• Fraud is expanded to include unlawfully deregulating an apartment or failing to register an apartment as rent-stabilized after 2011 if it received certain tax benefits.
• The law aims to hold landlords more accountable for fraudulent behavior during rent overcharge cases.

     3. Registering Apartments and Fines:

• The fine for landlords failing to file annual rent registration statements has increased from $10 per unit to a substantial $500 per unit for every month of non-compliance.

     4. Succession Rights:

• The law reaffirms the two-year residency requirement for family members inheriting rent-stabilized apartments, with exceptions for disabled or older individuals living with the primary tenant for one year.
• The one or two-year period is now determined by when the primary tenant relocates or passes away, preventing tenants from losing succession rights due to lack of understanding.

     5. Substantial Rehabilitation

• Landlords can remove a seriously deteriorated building from rent stabilization through substantial rehabilitation, but approval from the DHCR is required within one year of completing the renovation work.
• Buildings not meeting specific criteria or with a history of tenant harassment remain rent-stabilized.
• The law mirrors regulations published by the DHCR in November, ensuring transparency and accountability in the process. 

As the legislation undergoes the chapter amendment process, it is expected to retain its core principles, providing enhanced protection and rights for rent-stabilized tenants in New York City.

The New York State Senate https ://www.nysenate.gov/newsroom/in-the-news/2024/brian-kavanagh/what-end-frankenstein-loophole-means-nyc-renters. Originally published in Brick Underground on January 5, 2024