N.Y. Comp. Codes R. & Regs. tit. 9, § 2040.9 – Compliance and inspection.

(a) For all buildings placed in service on or after January 1, 2001, the division shall conduct on-site inspections of all buildings in the project by the end of the second calendar year following the year the last building in the project is placed in service and, for at least 20 percent of the projects's low-income units, inspect the units for habitability and review the low-income certifications, the documentation supporting the certifications, and the rent records for the tenants in those units.
(b) At least once every three years, the agency shall conduct on-site inspections of all buildings in the project and, for at least 20 percent of the project's low-income units, inspect the units for habitability and review the low-income certifications, the documentation supporting the certifications, and the rent records for the tenants in those units.
(c) The agency shall randomly select which low-income units and tenant records are to be inspected and reviewed by the agency. The review of tenant records may be undertaken wherever the owner maintains or stores the records (either on-site or off-site). The units and tenant records to be inspected and reviewed shall be chosen in a manner that will not give owners of low-income housing projects advance notice that a unit and tenant records for a particular year will or will not be inspected and reviewed. DHCR may give an owner reasonable notice that an inspection of the building and low-income units or tenant record review will occur so that the owner may notify tenants of the inspection or assemble tenant records for review.
(d) The division shall review any local health, safety, or building code violations, reports or notices retained by the owner and must determine whether the buildings and units satisfy, as determined by the agency, the uniform physical condition standards for public housing established by HUD (24 CFR 5.703). The HUD physical condition standards do not supersede or preempt local health, safety, and building codes. A low-income housing project under section 42 must continue to satisfy these codes and, if the agency becomes aware of any violation of these codes, the agency must report the violation to the IRS. However, provided the agency determines by inspection that the HUD standards are met, the agency is not required to determine by inspection whether the project meets local health, safety, and building codes.
(e) Exception from inspection provision.
The division shall not be required to inspect a building under subdivision (d) of this section if the building is financed by the Rural Housing Service (RHS) under the section 515 program, the RHS inspects the building (under 7 CFR part 1930), and the RHS and DHCR enter into a memorandum of understanding, or other similar arrangement, under which the RHS agrees to notify the agency of the inspection results.
(f) An inspection may include, but is not limited to: a physical inspection of the building, grounds, individual rental units, common facilities and central systems for general construction; a review of all records described above; interviews of tenants and project employees; and any other information which the division deems relevant.