I thought I was taking over a rent-stabilized apartment lease last fall, but before I moved in and received the paperwork, the landlord said he would give me the rent-stabilized rate for one year on a rent concession rider, and that the legal rent would be 18 percent more. When I tried to push back, he said it was to protect the building for the next tenants and he wouldn't raise the rent that much in the next year. I was obviously too trusting because now it’s time to renew my lease and he is raising it by that much. What can I do?
There are a few possibilities in this situation, according to Sam Himmelstein, a lawyer with the firm Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP who represents residential and commercial tenants and tenant associations.
One is that the previous tenant in your apartment had a preferential rent, which means that the landlord was charging less than the maximum legal regulated rent, and then opted to do the same for you.
Landlords may do this to entice tenants if they’re having trouble renting out their apartments at the full legal regulated rent. However, this means that when those tenants renew their leases, the landlord can raise the rent to the legal regulated rent, and they could therefore be facing a massive rent hike, rather than the typically smaller increase set by the Rent Guidelines Board for stabilized units. If this happens to you, once the landlord opts to raise your rent to the legal regulated rent, future increases will be the maximums allowed by the Rent Guidelines Board.
“This is legal, as long as both the legal and preferential rent are set forth in the initial lease and subsequent renewal leases, and the landlord registers both the preferential and higher legal rent,” Himmelstein says. “Unless the landlord says in the lease that the preferential rent is somehow permanent, they can end it and charge the higher rent when you renew.”
Another possibility has to do with the 18 percent rent hike your landlord is charging you, which is close to the legal vacancy increase for stabilized apartments. Owners of stabilized units are allowed to raise the rent on a vacant unit by 20 percent for incoming tenants who sign two-year leases.
“It’s possible that the landlord is taking the vacancy increase but initially charging a lower preferential rent,” Himmelstein says. In that case, “The same rules apply: As long as both the higher and lower rents are set forth in the lease, and the landlord registers both of them, then it's legitimate, and the landlord can end the preferential rent at the end of the lease.”
You may have recourse if your landlord failed to register the legal and preferential rents with the state, or didn’t specify them on your lease. Given that there’s a rent concession rider on your lease, though, it sounds like the landlord did his due diligence.
If you find that that’s not the case, you’re only on the hook for the lower rent, but you may be in for a visit to housing court to sort this out.
“You could pay lower rent and end up in a court battle, and you’d probably win, but you’d have to litigate,” Himmelstein says.
Related:
Ask Sam: What does "preferential rent" mean, and are there any downsides? (sponsored)
Ask Sam: My landlord lied about my preferential rent. Is it still binding? (sponsored)
Ask Sam: I found out my apartment used to be rent-stabilized. Now what? (sponsored)
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Sam Himmelstein, Esq. represents NYC tenants and tenant associations in disputes over evictions, rent increases, rental conversions, rent stabilization law, lease buyouts, and many other issues. He is a partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph in Manhattan. To submit a question for this column, click here. To ask about a legal consultation, email Sam or call (212) 349-3000.
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