In response to the passage of Good Cause Eviction (“GCE”) on April 20, 2024, DHCR released guidance clarifying some of the questions with respect to owners’ obligations under the new law. A copy of the guidance issued by DHCR can be found here. We are writing to update you as to that guidance:
- DHCR has published the CPI factor required in order to calculate rent increases under GCE. Pursuant to the guidance issued, the CPI factor effective May 1, 2024 is 3.82%, such that any increase at or below 8.82% will be deemed to be presumptively reasonable under GCE
- DHCR has confirmed that units with a monthly rent in excess of 245% of the fair market rent established by the United States Department of Housing and Urban Development are exempt from GCE. The specific rent thresholds are set forth in the linked guidance.
- DHCR has confirmed that notices required under GCE are not required until the 120th day after April 20, 2024. As such, it is our recommendation that owners should not begin serving such notices until such time as they are legally required, both so as not to take on an obligation that has not ripened yet and so that we can continue to monitor for potential further guidance on the form of the required notice. This does not eliminate or modify owners’ obligations to provide notice pursuant to RPL 226-c with respect to rent increases in excess of 5%.
While it is likely that some of these issues may be subject to future litigation, with the possibility that the Courts may disagree with DHCR’s interpretation as with the Stuyvesant Town litigation, compliance with the DHCR guidance should, at the very least, insulate owners from claims of willfully breaching GCE even if the Courts ultimately disagree.
If you have any questions, please feel free to contact your trusted R&E attorney or Deborah E. Riegel, Member of the firm’s Litigation Department, who authored the above industry update.