Do I have any leverage?

[Gasolin]

Hello!

First of all, apologies if I am not in line with the forum's guidelines in any way. I read the guideline and tried to stick to it but since this is the first time, I beg for your indulgence.

Let me start with the basic information about my situation.
I am in Manhattan, in a fairly recent building (+/- 5 years old), roughly 1000 units all rent stabilized due to a 421-a tax privileges for a given period of time, probably 20 years. I initially signed a 2 years lease as the primary tenant where you can see the legal regulated rent, which is quite high for a 1 bedroom even in Manhattan, and a preferential rent, which is also high actually, though closer to the market price.

Due to the amounts involved, I understand that my issue can only be seen as a "rich" problem. Sorry in advance if that is the case as I am just trying to complete my understanding of the situation.

Recently I have been proposed a 2 years lease options for renewals. Of course, the legal regulated rent received a 2% increase, as stated by the latest announcement of the regulation.

However, my preferential rate was proposed with a 6.3% increase. Given the numbers, it goes high very quickly. I tried to ask for a reduction since I consider it as not being a fair value in the market, and received a proposal at 5.3% (so no major improvement). The management refused to improve the second proposal and gave me a deadline to respond.

The initial proposal was sent 3 months before the end of the lease so it seems more or less in line with the regulatory requirements.

Now I did ask for a rent history as well.

The initial rent 5 years ago was higher than what I am currently paying, and it was listed as the legal regulatory rent. Then, in the second year, due to "improvements", the legal regulatory rent jumped a whopping 28%, and the preferential rent was kept identical to the legal regulated rent. Finally I came in. The legal regulated rent was still high but the preferential rate was lower than the initial legal regulated rent.

The information would look as below, based on an initial legal regulated rent of "X".

Reg Year | Legal Regulated Rent | Preferential Rent | Reasons | Lease Begin / Ends
2011 X NONE NONE 2011 / 2013
2012 X+28% X Improvements 2011 / 2013
2013 X NONE NONE 2011 / 2013
------
2014 X+20% X-11% Vacancies/Lease 2011 / 2013
2015 X+20% X-11% NONE 2011 / 2013

Even though I don't have any illusion, my questions are the following.

1/ Do I have no choice, since the legal regulated rent is the only that matters, and it has been increased 2% according to the law? The management truly seems to believe they are right to charge a price that is 18% higher than what the Manhattan Rental Report would suggest as average price for a 1 bedroom with doorman for my area.

2/ In the rent history document, the apartment services include all the facilities that are available, as well as "recreational facilities".

Does that relate to building amenities? In this case, this is no more true since they are now charged separately per person. Would that question the validity of the price?

3/ How come the legal regulated rent can be that high, even in Manhattan, for such a new building? There is no time for any compound interest rate effect to kick in, yet the legal regulated rent is as high as Y+49% if Y was considered as the average price for a 1 bedroom with doorman in my area.

Thanks in advance for your responses.

[TenantNet]

Can't read the entire thing. But to start, with 421-a, not all 1000 units would be rent stab. 20% of the units would be rent stab. Also doesn't sound right is the preferential rent as part of the 421-a program.

I don't think you can have a preferential in a 421-a RS unit. (not 100% sure, but doesn't sound right). How about sending us a scan of the lease by Private Mail (use the PM button), not in the public part of the forum so we can look at how this lease is constructed.

As for the percentages on the pref. rent, we would have to see the lease to see if it's permissable. (the initial lease along with the renewals). Your explanation is confusing at best, and your table is not formatted.

[Gasolin]

Hi, do you want the scan of the lease (which is quite big actually, but I can send the first 2 pages which have basically most of the information) or just the scan of the rent history?

[TenantNet]

How many pages for the entire thing - plus the various renewal leases? We need to see the fine print. It's good to have all pages scanned in anyway. If you decide to take any action, you'll need copies.

When scanned (into a PDF file, use greyscale, 200 dpi). Do NOT use the color or B&W settings. Do NOT create a JPG, PNG, GIF or TIF file.

Find the PM button and you can attach the file to a Private Message.