Signing a lease on an illegally deregulated apartment does not mean you waive your rights as a stabilized tenant

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Question:

I have read there are bidding wars for rentals and people are actually offering to pay hundreds more each month. What if a landlord is encouraging renters to bid on an apartment that is rent-stabilized? Isn't that illegal?

Answer:

This could very well be the case, but you’re better off waiting until you’ve already signed a lease to investigate whether your apartment should be stabilized, says Sam Himmelstein, a lawyer with the firm Himmelstein, McConnell, Gribben, Donoghue & Joseph who represents residential and commercial tenants and tenant associations.

In anticipation of New York City workplaces asking employees to come back to the office, there has been a flood of renters returning to New York, creating intense competition for apartments. And in some particularly hot markets, would-be tenants are even engaging in bidding wars, and offering to pay higher rent than is listed for the apartments they want.

Given this environment, there may be some unscrupulous landlords who accept higher bids on rent for apartments that are supposed to be stabilized. But if you suspect this has happened with your apartment, it’s best to wait until you’ve already signed the lease before you start looking for evidence.

“Landlords almost never will negotiate the terms of a residential lease. It will put the landlord off, especially if you’re trying to do it with the help of a lawyer,” Himmelstein says. “They might turn around and say they don’t want to rent to you, and there’s nothing illegal about that—it’s not considered unlawful discrimination.”

In a slower rental market—like the one NYC had in the early days of the pandemic, when landlords struggled to find renters—tenants may be able to negotiate concessions and other breaks on rent. Today, it’s unlikely to happen.

That said, it is likely that there are many apartments out there that have been illegally deregulated. It’s easier to find out whether this is the case for your own once you’ve moved in.

“You can’t get the apartment’s registration history until you’ve already become a tenant,” Himmelstein says. “Wait until you sign the lease, move in, and pay rent and security, and then go to the New York State Division of Housing and Community Renewal's website and check the apartment’s rent registration history. If you believe that you have an argument the apartment should be stabilized, at that point you can contact a lawyer or a tenant advocacy organization to help you to analyze and understand the rent history..”

You can also look into whether your building has received a 421-a, 421-g, or J51 tax abatement, all of which would mean that it should be rent-stabilized.

“Those are public records, which you can look up even before you move in,” Himmelstein says. “If the building has a current 421-a or J51 abatement and the landlord is saying you’re not stabilized, the fact is that you are. Move in, and then assert your status as a stabilized tenant.”

Note that signing a lease on an illegally deregulated apartment does not mean you waive your rights as a stabilized tenant, and you can still file a rent overcharge complaint if the rent is not the correct amount.

For more details on how to find out if your apartment should be stabilized, read this Ask Sam column about how to investigate it. And finally, keep in mind that there are still neighborhoods where tenants can find a deal on rent and avoid intense competition.

Related

Ask Sam: How do I find out if my apartment should be rent-stabilized—and the landlord owes me money? (sponsored)

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Read all the Ask a Renters' Rights Lawyer columns here.


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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