Ask Sam: My landlord lied about my preferential rent. Is it still binding?
Dear Sam: I just signed a lease on an apartment with a "preferred rent credit" of several hundred dollars—which I only found out about when I received my first rent invoice. When my signed lease arrived days later, the legal rent was handwritten on the lease, meaning it wasn't on the lease I signed. I confronted the broker for withholding this information, but he says he had no idea. Is the landlord or management company really allowed to do this?
There are certain protocols about how to inform tenants about preferential rent (in which landlords of stabilized apartments charge less than the legal rent), and your landlord most certainly did not follow them, says Sam Himmelstein, a lawyer who represents residential and commercial tenants and tenant associations.
"If the landlord is going to charge the tenant less than the legal rent, the landlord must write in the lease that there’s a higher legal rent," explains Himmelstein's colleague Ron Languedoc. "The standard procedure is to include a preferential rent rider, which is typically a separate page of the lease. It should clearly state that the legal rent is a higher amount, and that the landlord reserves the right, when the lease is up for renewal, to terminate the preferential rent and revert to the higher rent." (Landlords also to have to follow legal procedures to register preferential rents in order for them to be valid.)
Not only did your landlord not follow this procedure, but they tried to change the terms of the lease once you'd actually signed it, which is clearly illegal. "You can't alter a lease once someone has signed it and claim it's binding," says Himmelstein. "That's just basic contract law and common sense, even with market-rate leases."
To combat the problem, it's always smart to start a paper trail in case the matter ends up going to court. Languedoc recommends writing the landlord a letter clearly stating that the information they hand-wrote onto the lease was not in the original version you signed, and that the lower rent amount stated in the lease was the only amount you expected to pay. Keep a copy of this letter for your own records, and if you have one, a copy of you lease you signed before your landlord made their retroactive edits.
Then, if your landlord tries to revoke the "preferred rent credit" and raise your rent when the next lease renewal rolls around, says Himmelstein, you can file a complaint with the DHCR for improper lease renewal.
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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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