A hotel occupant, who has never had a lease, may become a permanent tenant by requesting a first lease
for a term of at least six months at any time after commencing occupancy, and the owner must provide such lease
within fifteen days after such request. The six month term is the minimum lease period mandated by the Code.
However, unlike owners of rent stabilized apartment buildings, who are required to offer rent stabilized tenants
renewal leases for one or two years at the tenants’ option, hotel owners are not required to provide renewal leases
to permanent tenants. A permanent tenant has the right to remain in occupancy, whether or not the lease is
renewed by the owner. Permanent tenants are subject to annual guidelines increases set by the New York City Rent
Guidelines Board, whether or not they have leases.
Security Deposit
A hotel owner may collect a security deposit no greater than one month’s rent, provided the hotel occupant
is granted a first lease. When the rent is increased if the lease is renewed or the permanent tenant chooses to
remain in occupancy after the lease expires, the owner may charge an additional amount to bring the security
deposit up to the full amount to which the owner is entitled.
Security deposits must be deposited in an interest bearing trust account in a New York bank. Owners may
deduct an annual service fee of 1% of the security deposit, and must, at the permanent tenant’s option, apply the
balance of the interest paid by the bank to the rent, hold it in trust until repaid, or pay it annually to the permanent
tenant.
AO 87-2 Page 3 of 7
Reissued 7/95
Vacancy Rent