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My building is being sold - advice needed on MCI

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

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My building is being sold - advice needed on MCI

Postby BertBook » Fri May 26, 2017 11:21 am

So, a little background. I live in a small studio that as far as I know is rent stabilized (it fits all the criteria). My rent is pretty low for the neighborhood. I've been in the apt for 7 years, and my original lease was never renewed (so I guess I am "month to month" and the terms of the original lease still apply). A couple years ago my landlord had me come over to sign a new lease, but he never sent me a copy of it despite me asking for it on multiple occasions. However, I believed this to be OK since my original lease was still valid if the worst came to the worst, and I have rent receipts saved for the full 7 years.

Anyway now the landlord has told me that he is selling the building, and things will be moving fast (he said within 48hrs). He said that the new owners will be looking to buy out existing tenants with a view to renovating the building, and asked me if I had a figure in mind. Given that I'm not doing so well financially at the minute and can't afford to pay what will probably turn out to be double the rent for a new place, I know they probably won't agree to the amount of money that will persuade me to uproot my life and security and move.

So I'm thinking of staying put. He also told me that the new owners will be undertaking major MCI's. I understand that they can only increase my rent by 6% per year to pay for these. My landlord tried to scaremonger me by suggesting that my rent could go up 30-40% - I'm presuming he's BS'ing. Anyway I'm instantly suspicious of the whole MCI area and the propensity for scamming.

In particular, is his claim that the building needs a brand new roof. A new roof was installed around 5-6 years ago. However, he claims that he was ripped off by the contractor with shoddy materials and was given a fake warranty. He also says that a couple of apartments on the top floor have seen leaks recently, and is using this to justify a new roof. He's generally a nice guy but I'm not so naive as to discount the idea that when potentially $100's of $1000's are at stake, even nice guys are susceptible to shady dealings. It occurred to me that perhaps a building that "needs a new roof" would be worth more to a buyer because of the whole MCI rent increase thing, and especially since most of the units are currently under market rate.

Over the past few weeks I've heard people up on the roof at odd hours of the night crashing and banging around (it's alarmed, so it's not tenants) and the idea has gotten into my head that maybe even some kind of deliberate sabotage was afoot in order to create leaks and justify the new work. Maybe I'm being paranoid? Who knows. But I'm instantly suspicious of his "forged warranty/shoddy materials" claim.

Anyway, sorry for the long background, I guess what I want to know is - is there any way I can make absolutely sure that his story about the roof checks out before I accept an MCI increase on its behalf? I figure that 5-6 years does not qualify for a new roof in normal circumstances, but the new owners could use this "fake warranty" stuff to somehow get around the rules and justify installing a new one. How thoroughly would the authorities check out this story and make sure that the old roof is, in fact, substandard? I read everywhere that it's so easy for landlords to pull the wool over the eyes of city officials in this respect. Can a building owner even get an MCI to pay for the replacement of recent shoddy workmanship?

Thanks for any advice.
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Re: My building is being sold - advice needed on MCI

Postby TenantNet » Fri May 26, 2017 4:07 pm

Too long. Can't do this all at once. Better to be shorter and more succinct.

Good Grief! Do you KNOW if you are RS or not?

On what basis do you know? What is "fits all the criteria" mean? What does your original lease say - for starters?

What do you mean the original lease was still valid? You're assuming a LOT of things that are most likely not true.

How many units in the building? When approx was the building built?

Start with these questions.
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Re: My building is being sold - advice needed on MCI

Postby BertBook » Sat May 27, 2017 1:46 pm

Hi TenantNet,

Thanks for your reply. I'm sorry for not being more succinct - but as you're no doubt aware, people's situations are complex and are rarely expressible in short soundbites. My question is, however, summed up in the last paragraph.

Good Grief! Do you KNOW if you are RS or not?

On what basis do you know? What is "fits all the criteria" mean? What does your original lease say - for starters?

How many units in the building? When approx was the building built?


The address is actually two buildings, front and back, divided by a courtyard. It was built in the early 1900's. There are, I think, 24 units in total. It's not a co-op or a condo. It's in the East Village and my rent is $900. It doesn't show on the city's "official" list of rent stabilized buildings, but it does show on a map I saw of "buildings which are likely rent stabilized." I asked my landlord a couple of days ago if my apartment was officially rent stabilized, he said that it was. My lease doesn't say anything about rent stabilization - it's a generic looking "Prepared By Arnold Mandell" affair, which you can view a preview of here:

https://www.pdffiller.com/49404848-186p ... User-Forms


What do you mean the original lease was still valid? You're assuming a LOT of things that are most likely not true.


In researching what happens to a rent stabilized tenant after not renewing a lease and falling to a month-to-month tenancy, I read from a number of sources that the terms of the original lease still apply. For instance, here:

https://www.thewaterscrooge.com/blog/ev ... hould-know
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Re: My building is being sold - advice needed on MCI

Postby TenantNet » Sat May 27, 2017 3:12 pm

Two buildings could be considered as one building very easily if they are on the same lot, are connected, or are serviced by common services, i.e., a single boiler. This would be called a "Horizontal Multiple Dwelling." DHCR can make that determination if a LL objects.

Being built before 1974 and with 24 units (6 or more) makes units in the building eligible for RS status. If each building has 6+ units, then there's no question.

The building itself is not RS, units are. Then you have to look at the history of the various units.

The city does not have an official list. The state does. And even that is always out-of-date and only gives an indication that a unit might be RS. That map is even less accurate than the list. Every unit would have to have a determination by a court or by DHCR if a LL objects to RS status.

Do you get rent registrations from the LL? Have you gotten a rent history from DHCR? If not, ask for one ASAP. If it's not listed, that only means the LL didn't report it. All is not lost.

At this point you should not talk to the LL. Do not give him an indication you are sniffing around. Play dumb for now and continue to do homework.

That lease is just a generic Blumberg form. It is NOT a RS lease.

You should have something that says the unit is RS, AND you should have received a DHCR informational rider when you moved in, and also at each renewal. See http://www.nyshcr.org/forms/rent/ralr1.pdf

All your renewals must be on DHCR form RTP-8. See http://www.nyshcr.org/Forms/Rent/rtp8.pdf

You might have grounds to file an overcharge complaint. The lease is not proper and chances are there are no registrations or proper renewals. (but don't do that yet until you've done all your research).

Talk to your neighbors and see if any of them have real RS leases or paperwork, or if they have ever filed complaints with DHCR. Do all this discreetly.

Our view is that if indeed you are RS, then you are not month-to-month. You would retain all the rights of a RS tenant. Your link appears to be a LL site, and most likely does not cover your situation.

As for any new owner and any possible MCI, the first thing is to find out your RS status as all else flows from that.

So first, get a rent history from DHCR, then pull all our saved paperwork together. Start saving everything, including envelopes with postmarks. On important things, always send certified RRR. Document everything, including memorializing any conversations you have with the LL (like Comey did with Trump). Keep a dairy.

Look for gaps in the paperwork, i.e., lease renewals, informational riders and so on. Try to create a history of what the rent should be going back as far as you can, at least to 1984.

As for moving out, I would not talk with the LL until you get the legal RS status worked out. So not talk to them. Do not engage with them. Do not sign anything. Let them make the first move on paper.

Looks like the LL is sloppy or just ignores the law. Let him make mistakes, and you should get as educated as possible.
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Re: My building is being sold - advice needed on MCI

Postby BertBook » Thu Jun 01, 2017 10:49 am

Thanks for all the detailed info. Been really busy over the last few days with work but have some time off to look into things now.

"LL is sloppy or just ignores the law" pretty much covers it. He's actually a pretty nice guy and I've always gotten on with him, but he's never done much by the book. I've always paid him cash for the rent (wouldn't accept checks or cards) but I have rent receipts going back 7 years for this apt (and about 3 years previously in the apt downstairs).

I did file for a rent history with rentinfo@nyshcr.org and they sent me an automated reply saying that they would mail any info within 7 days but that "Rent histories will be provided only for those apartments that are registered with DHCR’s Office of Rent Administration." So I'm not sure where that leaves me. When I signed a new lease 2 years ago (the one he failed to get me a copy of), he did say that he was taking everyone's info down (including SS numbers etc) to "register with the city" whatever that meant. I was pretty naive at the time and just figured it was all above board and that he was trying to clean his act up. So we'll see.

I guess my main concern is in making sure that my lease is in good standing as the building transitions to the new owner. And like you said, I should have something saying the apt is rent stabilized. And I should have received an DHCR informational rider when I moved in. But I didn't, presumably because the LL was not doing things properly.

I'm thinking that if I pursue this "proper" RS lease, there is the potential of getting the LL in lots of trouble as his failure to do the correct paperwork in the past will be exposed. So I'm wondering if it would be in his best interests (and mine) to give me a brand new RS lease to keep himself in good legal standing. I'm also thinking it might be in my best interests to get some kind of legal aid!
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Re: My building is being sold - advice needed on MCI

Postby TenantNet » Thu Jun 01, 2017 11:46 am

Do not give the LL your SS#. You're not required to do so and there's a chance if identity theft. Don't do it.

DHCR should send you a history of the unit was ever in their system. If not they will say they don't have it.

Is "sloppy but nice guy" good for your tenancy rights, overcharges and so on?

RS units get registered with the state, not the city. Buildings (not units) do get registered with the city (HPD) if 3+ units or less than 3 units and the LL is not in residence. But that has nothing to do with rent stab.

Cleaning up his act involves rent registrations, proper renewal leases, a history of proper rent increases (if the unit is legally RS). Without all the, the rent should not be going up at all.

Just FYI, MCI's are a creature of RS. Unregulated units do not get MCI's, but then again the LL can jut raise the rents.

New installations are eligible for MCI's if the item being replaced (the old roof) has outlived it's useful life. DHCR has a list of useful lives. See http://www.nyshcr.org/Rent/FactSheets/orafac33.pdf
and
http://www.nyshcr.org/Rent/OperationalB ... rao902.pdf

So document when the old roof was replaced. That would be a defense for any new roof that gets installed.

Try to get to the roof when the LL isn't looking (fire escapes) or see if the battery on the alarm is dead) and take many photos of the current roof. Don't stop there. Take photos of items around the building.

If it gets complicated, then yes, seek out legal aid/legal services. For right now get the rent history and see where that leads.

New owners must do "due diligence" on any potential claims. So any complaint you make would affect the new owners.
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Re: My building is being sold - advice needed on MCI

Postby BertBook » Sat Jun 03, 2017 1:06 pm

Thanks.

Well, the rent history came through the mail and it's interesting reading.

The history starts at 1984 and for every year up until 2004, it says "rent control - reg not required."

Then in 2005 it's listed as rent stabilized, with the rent at $105.

The rent goes up to $119 in 2008, and then in 2010 they renovated the place (I think the previous tenant died) and the rent shoots up to $900, which is what I've paid every since.

So I'm not sure if that increase from $119 to $900 was a legitimate amount based on the renovation, or whether it's just a figure the LL pulled out of thin air. Setting the law aside, however, it's a remarkably fair rent based on the apt and the location, and I've always considered myself lucky to be paying it. I've tried to decipher the city's rules on lawful vacancy increases but it's a bit beyond me.

Other points of interest:

I signed my first lease here in 2010. Then for every year hence in the history, under "Reasons Differ./Change" it says "LEAS/RNL" (I presume, "lease renewal"). However, the original 1 year lease signed in 2010 was never renewed until 2015, so I'm not sure whether he's been fraudulently registering my tenancy as a renewed lease every year, or whether the city just classifies it as a lease renewal automatically when a RS tenancy falls into month-to-month.

Also, The history says that from 2015, when I signed the next lease renewal (the one I never received a copy of), the rent went up to $910. However I was never informed of this increase, and continued to pay the landlord $900/month (which he accepted happily). So I'm not sure why he would register the rent as $10 more than the amount he was actually charging me. Can't work out his motive for doing that at all!

It's impossible for me to get to the roof to take pictures unfortunately. The door is very much alarmed (it goes off every now and then and is ear splitting) and there is no other access. The claim for the roof renewal is going to be that, even though the last roof was installed less than 10 years ago (and likely below the useful life threshold depending on the materials used), the LL was "ripped off" by the contractor who did it and thus the roof is now failing. However I'm not sure if it's legal for the cost of a botched job to be passed onto tenants.

I think I am going to have to seek legal advice like you say. I would like to have a proper above-board lease in preparation for the change of ownership, and I'm not sure how to go about that. I guess the LL has not been acting within the law when it comes to my lease, so it might be in his best interests to give me a proper RS lease renewal to avoid his indiscretions coming out if I have to contact the city to assert my legal rights.
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Re: My building is being sold - advice needed on MCI

Postby TenantNet » Sat Jun 03, 2017 4:08 pm

I hope you're rounding off the numbers. Don't give us the exact numbers on a public forum.

Yes, Rent Control is required to register once, in 1984, and not thereafter. RC tenants do not have leases. However, there would be records of RC rent increase applications (MCR & MBR and even fuel pass-alongs).

So it appears that the RC tenant died or vacated around 2005 and the first RS rent was 2005. That is surprisingly low for 2005, but ignore that.

The jump to $900 means that the 2008 increase would have been a combination vacancy increase of 20% and IAI of around 1/40th of around $30,000. So it depends on what improvements they did that ran to $30,000. That will depend on the size of the unit and what they did. I would think most LL's exaggerate, or simply lie outright. But it's hard to disprove and you are beyond the 4 year statute of limitations.

Are you calling it "fair" because others are paying $3,000? That makes no sense either. But yes, it's seen by many as less outrageous, but only in a comparative sense. $900 is not fair.

BTW, the city has nothing to do with this; this is the state govt. DHCR is a state agency, not city. And RS does not "fall into" a month-to-month status. It's still RS and you still have all the RS rights. DHCR reflects the renewal on the rent history because that is what the LL has reported to them. It is not some automatic thing.

What you could do is see if the rent increases they've given you are legal, and if they have made the renewal offers in a legal manner. You can go back 4 years. But if you've been paying $900 since 2010 with no increase in the interim (even if the LL has reported $910 to DHCR), that might not be a tactic that will get you very far.

Did you make a copy of the lease offer from 2015? ALWAYS make copies of what they give you before you sign and send it back to the LL and after the LL executes it and returns it to you.

You could certainly fight the lack of lease renewals over the years, his not returning the 2015 lease to you, the false claim of the rent going to $910 and so on, but it might not be worth it unless there is a more important reason to fight.

The rent history should be sufficient to establish your RS status. Yes, having a lease would be nice, but not always necessary.

How can there be no other access? In most older buildings, the fire escape stairs will go to the roof. And sometimes the batteries on the alarms will give out. Do you know people in adjacent buildings from where you can take photos? Get a bit sneaky :)

Check with the Dept of Buildings database to see if there is a record of the roof work from a few years back. http://a810-bisweb.nyc.gov/bisweb/bsqpm01.jsp

That the LL was ripped off before is not your concern. Actually if you can get the LL to put it in writing that he did the work and was "ripped off," then that helps you in opposing any MCI application. That would be an admission by him that the work was done 5-6 years ago. Get as much proof of that work as possible. If done legally, there would be a record in the DOB BIS system.

My suggestion for getting legal advice was in relation to your RS status. From what you've said, it appears to not be a question. So paying for a lawyer now is premature.
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