Rules of the City of New York -

Title 28
Housing Preservation and Development




 §3-03  Tenant Income Limitations, Surcharges and Applicability of Federal §8 Subsidy to Tenant/Cooperators in Residence.
 (a)  Income limitations. (1) The dwellings in a rental development shall be available for persons or families whose probable aggregate annual income at the time of admission and during the period of occupancy does not exceed the greater of (i) the median income for such persons or families for the New York City metropolitan statistical area or (ii) seven times the annual rental, including the value or cost of heat, light, water and cooking fuel, except that in the case of families with three or more dependents, such ratio shall not exceed eight times the annual rental.
 (2)  "Probable aggregate annual income" shall mean the total income of the chief wage earner as reported in the New York State income tax return, plus the total income, in excess of $15,000 or such amount as determined by State law, of each other member of the household, less such personal exemptions and deductions for medical expenses as are actually taken by each tax paying occupant on the New York State tax return. However, the income of a household member, under 21 years of age, who is a full time student shall not be included in the computation of such annual income.
 (3)  Subject to the conditions contained in paragraphs (1) and (2) supra, in determining the eligibility of tenant/cooperators in a mutual housing company development, there may be added to the total annual carrying charges an amount equal to six per cent of the original investment of a person or family in the equity obligations of such mutual housing company and where same is not included in the carrying charges payable to the mutual housing company, the value or cost to the tenant/cooperator of:
 (i)  heat, light, water and cooking fuel
 (ii)  the cost of repainting, upon the basis of $45 per room per year and
 (iii)  the cost of replacement of fixtures and appliances upon the basis of $10 per room per year.
 (4)  Notwithstanding other applicable provisions, families with two or more dependents whose probable aggregate annual income does not exceed one hundred twenty-five percent of the limitations as to income as determined pursuant to paragraphs (1) and (2) of this subdivision (a), shall also be eligible for admission to the dwelling of a project provided that any family becoming eligible for admission by reason hereof shall pay, from the time of admission, a rental surcharge as provided for in subdivision (b) of this section, computed on the basis of the income limitations applicable to such family in the absence of this provision.
 (b)  Surcharges. In the event that the aggregate annual income of all occupants of a dwelling unit shall exceed the maximum above set forth, the tenant or cooperator shall be required to pay a surcharge based upon the following schedule:

Schedule of Surcharges

Income

Percent of
Basic Rent
Constituting
Surcharge

Up to 100 percent of maximum income limit

None
From 100 percent and up to 105 percent of maximum income limit

None
From 105 percent and up to 110 percent of maximum income limit

5
From 110 percent and up to 115 percent of maximum income limit

10
From 115 percent and up to 120 percent of maximum income limit

15
From 120 percent and up to 125 percent of maximum income limit

20
From 125 percent and up to 130 percent of maximum income limit

25
From 130 percent and up to 135 percent of maximum income limit

30
From 135 percent and up to 140 percent of maximum income limit

35
From 140 percent and up to 145 percent of maximum income limit

40
From 145 percent and up to 150 percent of maximum income limit

45
From 150 percent and over

50

 (c)  Surcharge procedures. (1) Surcharges shall be payable monthly on a current basis by tenant/cooperators in occupancy based upon income realized during the prior calendar year and such income shall be reported on income affidavits to be furnished by tenant/cooperators.
 (2)  On February 15th of each year during occupancy, or at such other date as determined by HPD, the housing company shall distribute to each tenant/cooperator an affidavit to be executed by all occupants residing in the apartment as to the income realized by each of such occupants during the preceding calendar year. The information requested shall be set forth in a form of affidavit prescribed by HPD.
 (3)  The tenant/cooperator shall return to the housing company or its managing agent the income affidavit supplied by the housing company duly executed and notarized by April 30th of each year.
 (4)  The surcharges shall be computed by the housing company or its managing agent in sufficient time so that surcharge billings shall commence no later than July 1st of each year. The income affidavits will be subject to verification at any time, pursuant to such method as may be determined by HPD, including, but not limited to, spot check audits of certified income tax forms and verification by the New York State Department of Taxation and Finance as set forth in §60(9) of the Private Housing Finance Law. Tenant/cooperators and other occupants selected for audit shall be required to provide a certified copy of the IRS or New York State income tax return for the audited year(s). The tenant/cooperators shall assume the cost of obtaining said certified copies. If HPD establishes a verification system with the New York State Department of Taxation and Finance, those tenant/cooperators found to have reporting discrepancies shall be obligated to furnish certified copies of IRS or New York State income tax returns. The housing company may, upon HPD's approval, implement a policy imposing a penalty fee when additional income is found that would have resulted in an additional surcharge.
 (5)  A housing company or its designee is required to collect all surcharges computed on the basis of income received by all individuals in occupancy.
 (d)  General requirements. (1) In the event that a tenant/cooperator fails to return a fully completed affidavit by April 30th of each year, the income of such tenant/cooperator will be presumed to have exceeded the maximum allowable income by 150 percent or more. Written notice will be given informing such tenant/cooperator that the maximum surcharge will be imposed effective July 1st. In the event completed income affidavits are submitted after April 30th but prior to June 30th, the maximum surcharge will not be imposed. However a non-refundable administrative charge, payable to the housing company, will be applied. This charge cannot exceed $50.00. The housing company may remit half of any such charge collected to the managing agent to compensate for the additional administrative work.
 In the event fully completed income affidavits are submitted after June 30th, a correction to the maximum surcharge billing will be made effective the first day of the month following the submission of such income affidavit. However, a non-refundable administrative charge, payable to the housing company, will be applied. This charge cannot exceed $150.00 for each month after June 30th in which the tenant/cooperator has not submitted a fully completed income affidavit. This charge must be made payable to the housing company. The housing company may remit half of any such charge collected to the managing agent, in accordance with the terms of the applicable contract, to compensate for the additional administrative work. In extenuating circumstances, HPD may permit reimbursement of excess surcharge to the tenant/cooperator.
 For purposes of this paragraph, an income affidavit in which the tenant/cooperator's household income is not disclosed is not a fully completed income affidavit.
 (2)  Reserved.
 (3)  Whenever changes occur in rentals or carrying charges or any component thereof used in the computation of surcharges, surcharges shall be recalculated by the housing company or its managing agent.
 (4)  A housing company cannot bring an eviction proceeding against any tenant/cooperator who fails or refuses to pay surcharges without the issuance of a certificate of eviction by HPD following an administrative hearing by an HPD designated hearing officer in accordance with §3-18 of this chapter.
 (5)  Housing companies or their managing agents shall submit a copy of the surcharge information tabulation sheets, and all changes thereto, together with copies of the income affidavits for HPD review and evaluation. Surcharge records shall be kept available by the housing company or its managing agent for inspection by HPD.
 (6)  Tenant/cooperators and other occupants shall be required by HPD to furnish certified copies of their IRS and New York State income tax returns. The cost for the certified report is to be borne by the tenant/cooperator.
 (e)  Reserved.
 (f)  Interim changes in income. (1) Where a tenant/cooperator anticipates a long-term reduction in income, resulting from death of a wage earner, retirement, or other such circumstances, said tenant/cooperator must submit documentation of such interim change in income to the managing agent. The managing agent shall verify the documentation submitted, and if a change in income is so determined, shall remove the surcharge and inform HPD of such action. HPD reserves the right to disapprove the action of the housing company.
 (2)  Where a tenant/cooperator anticipates a temporary reduction in income, such as job loss, temporary illness, or other such circumstances, said tenant/cooperator must submit documentation of such temporary reduction in income to the managing agent. The managing agent shall verify the documentation submitted, and if the interim change in income is so determined, shall reduce, eliminate or defer collection of surcharges for a reasonable period of time or shall arrange for an extended payment plan.
 (3)  The managing agent must maintain supporting documentation for all agreements which shall be available for review by HPD. Any tenant/cooperator shall have the right to appeal any determination under this subdivision (f) to HPD.
 (g)  Applicability of federal §8 subsidy to tenant/cooperators in residence. Pursuant to §31, subdivision 10 of the Private Housing Finance Law, a housing company shall accept federal reimbursement under §8 of the Housing and Community Development Act of 1974, as amended, in lieu of such amount of rent/carrying charge payment for a person qualifying under such act. A housing company shall not reject an applicant for an apartment solely on the basis that all or part of the rent/carrying charges shall be paid under §8 of the Housing and Community Development Act of 1974, as amended.

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