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Rent Overcharge - fraudulent increases of Legal Rent

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Rent Overcharge - fraudulent increases of Legal Rent

Postby thecolorblue » Tue Apr 05, 2016 7:52 am

Hello,

I am hoping to get some feedback from this community. I currently live in a rent stabilized one bedroom and pay a preferential rent. My landlord is attempting to raise my rent $600 to the “legally regulated rent” of $2505 as indicated on the original lease and subsequent lease renewals. Based on rental history records requested from DHCR, I have reason to believe this landlord has fraudulently increased the legally regulated rent multiple times over multiple tenants, culminating with the present situation.

To summarize the rental history from DHCR

2005 – Tenant A, Legal Regulated Rent: $814.32
2006 – Tenant A, Legal Regulated Rent: $814.32

2007 – Tenant B, Legal Regulated Rent: $1112.00
2008 – Tenant B, Legal Regulated Rent: $1147.00
2009 – Tenant B, Legal Regulated Rent: $1198.61

2010 – Tenant C, Legal Regulated Rent: $1390.00
2011 – Tenant C, Legal Regulated Rent: $1432.42

2012 – Tenant D, Legal Regulated Rent: $2026.80; Pref. Rent: $1695.00
2013 – *Reg not found for subject premises*
2014 – Tenant D, Legal Regulated Rent: $2067.33; Pref. Rent: $1793.33

2015 – Tenant E (me), Legal Regulated Rent: $2480.80; Pref. Rent: $1895.00
2016 – Tenant E (me), Legal Regulated Rent: $2505.60; Pref. Rent: $1915.00
2017 (current proposed lease) – Tenant E (me), Legal Regulated Rent: $2505.60; Pref. Rent: not offered

I have all supporting documentation including copies of leases, and cancelled rent checks. I have read about different approaches to rent overcharge scenarios such as filing a complaint with the DHCR, withholding rent until the landlord files a claim in housing court, then counterclaiming the rent overcharge, or simply just negotiating something directly with the landlord.

I’m considering retaining a tenant and landlord lawyer, but have little experience in doing this and am a little nervous. I welcome any advice or follow up questions.

Many thanks.
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Re: Rent Overcharge - fraudulent increases of Legal Rent

Postby BubbaJoe123 » Tue Apr 05, 2016 8:40 am

Two issues here:

1. Is the landlord calculating the correct legal rent? The two increases that look dubious are the 2007 increase (from tenant A to tenant B), which is 37%, which is well above the 20% vacancy increase, and the 2011-12 increase from C to D (42%, again well above the vacancy increase). The rest, at first blush at least, look in line with the law. For those two big jumps, either the LL just decided to say screw it to the rules (possible), or he made, or claimed to make, improvements (MCIs) that would allow a rent increase.

2. Can the landlord not renew your preferential rent?
a. Do both of your prior leases specify what the pref rent is, and what the legal rent is? If he doesn't specify both, then the pref rent _becomes_ the legal rent. Most (but not all) landlords aren't dumb enough to screw this up, but it's worth checking.
b. What does your lease (both your first and second) say about the preferential rent? Is it for the term of the lease, or the term of the tenancy? If it says it's for the term of the tenancy, then he can't abolish it. If it says it's for the term of the lease, or it doesn't say either way, he can eliminate it.

Pref rent info from DHCR is here: http://www.nyshcr.org/Rent/factsheets/orafac40.pdf
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Re: Rent Overcharge - fraudulent increases of Legal Rent

Postby TenantNet » Tue Apr 05, 2016 8:06 pm

It's important to be able to calculate the rent increases yourself. Obviously the jump in 2007 by $300 is more than the RGB increases. But what is it? A new tenant in this case would have the vacancy increase, possible longevity increase and any IAI increases. The same goes for each subsequent tenant.

But any IAI's (i.e., for new stove, refrigerator, and so on) can't be charged again in the short run, so the jump to Tenant D is certainly questionable.

I deciding a strategy, it's important to get a ballpark figure of the total possible overcharge. A few hundred dollars might call for one strategy, but if in the thousands, that calls for another, especially when you consider your attorney fees.

It looks as if you're still RS even with all the jumps, so your tenancy should not be at risk. Make sure you read DHCR's Fact Sheet on how preferential rents work. Then scrutinize each renewal to see if he's complied. If you have the name of the prior tenants, perhaps you can locate them and get copies of their leases if they have them (I did that many years ago).
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Re: Rent Overcharge - fraudulent increases of Legal Rent

Postby BubbaJoe123 » Wed Apr 06, 2016 10:19 am

Correction to my post, I wrote MCI (Major Capital Improvement), but should have said IAI (Individual Apartment Improvements).
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