DHCR Issues New Guidance Concerning Electronic Leases and Lease Offers

On Behalf of | Mar 29, 2022 | Industry Updates

On March 25, 2022, DHCR issued Operational Bulletin 2022-1, titled “Electronic Lease Offering and Tenant’s Voluntary Consent.” The Operational Bulletin was issued as a result of the State’s passage of Chapter 74 of the Laws of 2022, which authorized and directed DHCR to promulgate rules and regulations concerning the use of electronic rent stabilized leases and lease offers so long as tenants voluntarily consent to their use in writing.

According to the Operational Bulletin, Owners must first obtain tenant written consent “prior to or concurrent with” the lease offering via DHCR Form EL-TVC. Owners must first complete and sign the form and then serve it on the tenant by email, placement in an electronic portal, mail or personal service. Note that, while the Operational Bulletin allows for service of the form concurrent with the lease offer, the actual form only provides for service “prior to” the offer. Accordingly, at this time, it would be prudent to only rely on prior, and not concurrent, service of the form. All tenants named on the lease must provide their signatures to authorize consent.

Once a tenant signs the consent form, that same consent applies to all subsequent renewals until either owner or tenant opts out in writing. Either party may opt out of future electronic lease offerings at any time by providing written notice to the other party.

The guidance does not specify what kind of software need be utilized for the electronic signatures: “Owners and tenants can use electronic signatures that are utilized by a wide range of software products and electronic portals that can facilitate these lease offerings.” However, proof of service should include as many identifying factors as possible. All methods of electronic communications and documents must be capable of being printed.

All of the regular window periods for renewal offers and tenant responses still apply.

As with all newly promulgated DHCR guidance, questions will likely arise as this method is implemented. We continue to monitor developments in this area. As always, we encourage you to reach out to us to discuss any questions you may have.

Blaine Z. Schwadel
Member – Administrative Law
(212) 551-8440
[email protected]

Zachary J. Rothken
Of Counsel – Administrative Law
(212) 551-8453
[email protected]