Illegal deregulation in New York City

Illegal deregulation in New York City is the unlawful practice by landlords or property management firms in New York City to remove rent-regulated or rent-controlled status from apartments, converting them into market rate units.
Background
Rent regulation in New York City consists of two main systems: rent control and rent stabilization. Rent control applies to apartments in buildings built before 1947 and occupied by the same family since at least July 1971. Rent stabilization generally applies to buildings with six or more units built between 1947 and 1974, as well as certain newer buildings that receive tax benefits for affordable housing.
Illegal deregulation practices
Illegal deregulation involves fraudulent practices such as inflating renovation costs to exceed the deregulation rent threshold. These practices allow landlords to convert rent-regulated apartments to market-rate units unlawfully.
Fraudulent capital increases
Illegal high rent vacancy deregulation via fraudulent capital increases involves landlords or property management firms inflating the costs of renovations or improvements to justify raising the rent of a rent-regulated apartment to a level that exceeds the deregulation threshold. This practice is intended to convert rent-regulated units into market-rate apartments, thereby removing them from rent control or rent stabilization protections. Under rent regulation laws, landlords are allowed to increase the rent of a rent-regulated apartment if they make significant improvements or renovations to the unit (1/40th of renovation costs can be added to the rent price). The cost of these improvements can be passed on to tenants in the form of higher rent. When the rent exceeds a certain threshold, the apartment can be deregulated, meaning it no longer falls under rent control or rent stabilization laws and can be rented at market rates.

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