The landlord shall be entitled to apply to the Board for a hardship
surcharge if the net operating income for the building or complex is less
than 40% of the gross rents and revenues for the building.
" Net operating income" shall be defined as gross rents and revenues,
less expenses.
Revenues shall include:
A.
Surcharges.
B.
Garage rents.
C.
Laundry income.
D.
Vending machine revenues.
E.
The withheld portion of the interest due on the tenants'
security deposits.
F.
Real estate tax surcharges.
G.
Proceeds from tax appeals.
H.
Charges for late payment of rent.
I.
Security deposits retained pursuant to the terms of the
rental agreement.
J.
All other sources of income resulting from the rental
of the dwelling units of the apartment building.
A.
Expenses shall include:
(1)
The total payroll.
(2)
All utility charges.
(3)
Costs of heating fuel.
(4)
Management costs.
(5)
Other administrative costs.
(6)
Painting and decorating.
(7)
Maintenance and repairs.
(8)
Supplies.
(9)
Miscellaneous operating expenses.
(10)
Insurance.
(11)
Real estate taxes.
(12)
Refunds to tenants.
B.
Expenses shall not include the mortgage principal, interest,
depreciation, penalties, fines and legal fees for services outside the normal
day-to-day operation of the building or complex.
The landlord shall file the application on the form specified by the
Rent Leveling Board. The landlord shall submit the following information for
the two-year period immediately preceding the application:
A.
Copies of the applicable parts of the landlord's
tax return.
B.
Financial statements (balance sheet, profit and loss
and cash flow).
C.
An analysis of gross income.
D.
Copies of the landlord's real estate tax bill, with
proof of payment.
E.
Copies of state and local tax bills, with proof of payment.
F.
Documentation of management fees and identification of
the recipients.
G.
Itemization of capital improvements.
H.
A description of all transactions with related persons;
"related persons" shall be understood in the context ordinarily used in the
accounting and legal professions.
I.
Proof of expenditures for expense items, i.e., canceled
checks and receipts marked "paid."
J.
A detailed analysis of payroll costs.
K.
A monthly analysis of rents and other income.
L.
The rent roll.
M.
A detailed listing of unpaid bills, uncollected receivables
and claims.
N.
An analysis of accrued expenses.
O.
A description of accounting practices and policies.
This statement must be certified by a certified public accountant as
to its accuracy and completeness.
A.
Ten copies of this application must be accompanied by
a fee of $20. The landlord shall be required to post a deposit of $250 to
cover the expenses incurred by the Rent Leveling Board in obtaining a review
of the hardship application by an independent accountant.
B.
The landlord must make available to the independent accountant
all documents and records pertaining to the building or complex. The landlord
shall produce these documents and records at the hearing if requested by the
Rent Leveling Board.
[Amended 3-6-1990 by Ord. No. 1103]
The Secretary/Investigator of the Board shall reject and return all applications which do not meet the minimum requirements of § 235-57 of this article.
The Board shall hold a hearing on the landlord's application no
sooner than 30 days nor later than 120 days after the receiving and acceptance
of the application.
The Board, after hearing all witnesses and reviewing all evidence, shall
determine if:
A.
If the Board has determined that operating expenses exceed
60% of gross rents and income, the Board shall grant a hardship surcharge
which will bring the operating expense/gross rent ratio to 60% for the next
fiscal year.
B.
It shall be assumed that rents and expenses shall increase
at the same rate, which shall be, for purposes of this section, the annual
allowable rent increase, or 4%.
The landlord shall apportion the hardship surcharge among all the tenants
in the following manner:
If a hardship surcharge is granted, the landlord shall notify the tenant
of the following information 30 days prior to the implementation of the surcharge:
A.
The total amount of the surcharge.
B.
The method of computation to determine the surcharge.
C.
The number of rooms in the dwelling.
D.
The number of rooms occupied by the tenant.
E.
The allowable surcharge for each tenant, yearly and monthly.
F.
The effective and expiration date of the surcharge.
The decision of the Board shall be by resolution, with certified copies
mailed to the landlord and to the tenants who participated in the hearing.
The resolution shall include the following:
A.
Whether the hardship application was granted.
B.
If the application was granted, the calculation and amount
of the surcharge, with the appropriate amount per tenant charge.
C.
A statement as to the beginning and ending dates of the
surcharge.
D.
A description of the appeal procedure to the Mayor and
Council.
Each landlord shall be limited to one application and approval of an
increase in rent due to hardship during any one calendar year. No hardship
surcharge shall be granted while another is in effect.
All hardship surcharges shall expire after 30 months. After that time,
the landlord, if he or she wishes to continue the surcharge, shall submit
a new application, which application shall be reviewed at a hearing of the
Board.
Hardship surcharges shall not be included in the base rent for the calculation
of annual rent increases.
