Is this legal? My rights?

[bearcub]

HI All,

I will post this as best as possible without providing personal details as best as possible. Forgive me in advance if I provide too much.

We lived in our RS apartment over 7 years. Halfway thru my renewal lease, a vacancy opened upstairs. We took it. We moved. We chased for our actual lease, which was just delivered to us today which is 6 weeks post move in date. Much to our surprise, our lease had a PR attached which is something I've never encountered. PR states that this apartment is not subject to the RS law because the rent prior to tenants taking occupancy exceeds $2500 which makes this apartment a 'market apartment' not subject to rent regulations. It then lists the monthly rent which is lower than $2500, and then goes into agreement of paying the preferential rate which is less than the monthly rate he listed and is also the rate he verbally told us we'd get prior to moving in.

We are somewhat confused and angry by this. Firstly had he told us of the true monthly cost, we would never had moved. Secondly, he has not given us a two year lease which is what we requested. Are we entitled to a two year lease? We had asked for a two year lease and he gave us a one year plus this PR 6 weeks after moving in.

Before making any issues with this place, I want to make sure I'm within my rights to do so.

We have discovered that he can raise the rent up by 20% at the time of a vacancy lease.
But we were of the understanding that the apartment has to be over $2700, in effect prior to the tenant taking occupancy, for the apartment to not be subject to any rent regulation. This came into effect on 15th June 2015.

Thank you!

[TenantNet]

Please answer each of the questions below.

What do you mean by "We chased for our actual lease"? Please explain.

I assume you mean PR is Preferential Rent, but you should identify the abbreviation for other readers. Is the PR for your old apartment, or your new apartment. We're not mind readers. Please be as specific as possible.

When did this transfer take place? The threshold is now $2700 as of July 2015.

Are you telling me you left your RS unit and took a new unit not knowing if the new unit was RS or not? And you moved without knowing if the lease was for one or two years?

This makes no sense. There is no such thing as a PR rent for a non-RS unit. It can't exist as there is no "legal regulated rent" if the unit is actually non RS. Someone needs to review all the documents to get a clearer idea of what is really going on.

It sounds as if you really need someone who can really look at the situation, someone to review all the documents and promises made by the LL - for both units. Is there a tenant group in your building or your neighborhood? Can you give us a general idea of your location or neighborhood? If you want to give specifics, use the Private Mail facility (use the PM button).

[bearcub]

1. "We chased for our actual lease"
- When we moved from old apartment to new, landlord wanted us out by the 1st. We moved but never received our new lease. We repeatedly asked for this both verbally, written, and via email. We finally received this new lease 6 weeks later post move in date.

2. Abbreviation: My apologies. I saw a previous Preferential Rent post using PR and figured it was allowed. To clarify to my readers, I am referring to a term called Preferential Rent which I actually never knew existed myself in the world of rent stabilisation. The PR is for the new apartment which was attached to this new lease that was just given to me.

3. This transfer took place on 9/1/15. The preferential rent (PR) rider states that this apartment is not subject to rent stabilisation because the rent prior to us exceeds $2500. I know that the tenant prior to me paid $1800 as well. However, I am unaware if this tenant indeed signed a PR rider.

4. I moved within my apartment building I have resided in for 7 years with the understanding that I was to have a rent of $1800 and specifically asked for a two year lease. Again, I was given a one year lease. This building is rent stabilised and was under the impression that this apartment had the same requirements. Hence, why I'm taken back by these new terms especially when I was never told despite me requesting the lease several times. In short, yes, I moved without a lease in my hands as I was pressured to vacate by the first of the month last month.

5. I agree with what you're saying. Based on this PR rider, I interpret it as saying that I'me agreeing to the PR rent and am aware that thereafter this one year period, the unit will then no longer be rent stabilised.

Thank you for your response. I will PM you with the location as I am unaware of any groups in our area. I will also mention the specific numbers on this rider as they don't make sense to me.

[TenantNet]

Lease ... do you mean to say he didn't give you a copy, or that you didn't see it for the first time and sign it until after you moved into the new unit? Do you have copies of those written requests?

PR is allowed, but we try to spell out an abbreviation the first time it is used in a thread as a point of reference.

But the LL is telling you the new unit is not rent stabilized, and since PR applies ONLY to RS units, then that makes no sense whatsoever. PR does not apply to non-RS units as there would be no "legal regulated rent" to which a discount can be applied.

See Fact Sheet #40: Preferential Rents

Was the PR specified in the new lease, just in passing, or was it part of a separate rider?

Ifthe old tenant paid $1800, try to find out what the legal rent was for him. Most RS legal rents are an odd number due to years of RGB percentages being applied. It would be odd to be an even number with no cents.

ASAP, get a DHCR rent history and specify you want it going back to 1984, for BOTH units.

The law changed on 7/1/2015 making the high rent trigger $2,700, so it appears there's an issue there, but you need to find out the history before that as previous increases might have also been illegal.

The LL is claiming the unit is not RS, yet he offers a PR rent. That makes no sense whatsoever.

RS provides for the 2-year option. There's no such legally mandated option with unregulated units. That's the least of your issues.

What sort of pressure was put on you? Were you induced to move by the promise of a rent of $1,800? Any proof of that? Did you make the request in writing? Did the LL promise in writing?

"..am aware that thereafter this one year period, the unit will then no longer be rent stabilised." That also makes no sense. Units don't drop RS after you've moved in.

[whoknewthis]

TenantNet: I disagree about your statements on preferential rents on fair market apartments. I see it all the time and it is becoming more and more common. Landlords are being advised that since Roberts (where DHCR and the industry interpreted the law for years allowing for de-regulation, just to be told that everyone was wrong and the de-regulations were improper) and even more so now with the uncertainty with Altman (which may mean that a great deal of de-stabilized apartments were improperly de-stabilized),it is best to continue calculating the "legal rent" taking proper increases, and using a preferential where the market cannot pay it. This way if it turns out there is a change in the well established interpretation of the law, you have preserved your legal rent and have the leases and documents you would have in an RS apartment to back it up.

Even though there is no "legal rent" in a fair market scenario, it does not mean that you can't put a higher rent in the lease and attach a preferential rider -- nothing wrong with that. I even see this happening in the commercial leasing setting, where the preferential rider states that if the tenant defaults in the lease, the landlord can pull the preferential at will (this obviously would not fly in the residential context, even in a fair market lease, but there is much more freedom to contract in the commercial context). I only bring this up to further the point that preferential rents are not solely a creature of rent stabilized scenarios.

[TenantNet]

I don't think you understand. PR is a creation of rent regulation. You're bringing Roberts and Altman into the discussion just raises the issue that in the future (for Altman) there might be challenges to deregulations.

Is it wise for LLs to hedge their bets and offer tenants a discount? Perhaps. That might protect a LL in case there's an overcharge issue. But it has nothing to do with preferential rents. Even a discount to a "market rent" is not a preferential rent even is the numbers are the same.

A properly constructed PR carries with it LL's need to preserve its right and notification to tenants. None of that matters in the free market environment. For example, a LL's option to discard the PR in an unregulated setting is governed solely by the lease between the parties. If the same thing happens for a regulated tenant, then it's a function of the statute, not the lease. In fact, one needs to go back to the "Collingwood Rule" from the 1980's to see how what is known today as PR has evolved.

So a LL offering a discount and perhaps end the discount later, call it what you will, but it's not the Preferential Rent that exists under rent stab.