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RS Apartment & rent reduction/freeze

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

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RS Apartment & rent reduction/freeze

Postby 575MidTownKid » Sun Aug 27, 2017 1:41 am

Hi,

If I moved into a RS apartment and there is a rent reduction & freeze in effect - how should the freeze/reduction impact the new tenancy % increase for the lease?

Does the freeze continue even if the new tenant was not the person who signed to get the rent reduction?

Thank you
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Re: RS Apartment & rent reduction/freeze

Postby TenantNet » Sun Aug 27, 2017 7:20 am

DHCR rules on this have changed over the years. 30 years ago, if there was a service reduction order (that implemented a rent reduction to the level in effect prior to the most recent rent increase), that essentially meant a total rent freeze for any and all types of rent increases, and it also meant that the rent would not go up even for a new tenant.

Then in the '90's DHCR modified it's interpretation, keeping the rent freeze only for renewal increases, but allowing vacancy and both MCI and IAI improvement increases. I remember on case on this, but I don't recall which way the appeal went. Apparently the rules havce changed again, and DHCR states this is due to changes made in 2014.

Note: tenants should get legal advice if the effective date of the rent reduction was prior to the 2014 changes in the rent stab code. DHCR and the courts might allow the old rules in such cases even if the tenant seeks to enforce the rent reduction orders after 2014.

The most recent interpretation is here: http://www.nyshcr.org/Rent/FactSheets/orafac14.pdf

Also see http://www.nyshcr.org/Rent/FactSheets/orafac26.pdf

and

http://www.nyshcr.org/Rent/FactSheets/orafac5.pdf

Here's part of what DHCR says:

"The order generally bars further rent increases for rent stabilized tenants until DHCR issues a rent restoration order. The Rent Code Amendments of 2014 further prohibit the collection of vacancy lease rent increases and the collection of the portion of a major capital improvement rent increase that becomes collectible after the rent reduction order is issued. They will become collectible, prospectively only, from the effective date of the DHCR Rent Restoration Order."


In any service decrease case and service restoration case, there are three dates to consider:

1. Filing date - the date the tenant or owner mails the application to DHCR

2. Effective date - usually the date of the first rent collection that occurs after the opposite party has been served. For all it's delay, DHCR usually serves the other party with a copy of the complaint (or service restoration application) almost immediately after receiving the complaint. So this date is often only 1 or 2 months after the filing date.

3. Issuance date - the date the order has been issued.

There can be years between the Filing Date and the Issuance Date, causing rent reduction orders (or rent restoration orders) to be retroactive for significant amounts of time.

For rent stab, the issuance of a rent decrease order will be retroactive to the issuance date. Similarly, the issuance of a service restoration order will be retroactive to that application's issuance date. (tenants should be aware of this and keep the difference in escrow).

Rent Control is different in that the effective dates are the same as the filing dates.

Tenant advocates often advise against filing a statement of non-compliance with DHCR as it can cause problems with the rent reduction.

Remember, the filing of a PAR by either party is an appeal of the order. That stays the collection of the retroactive part of the order, but the prospective part of the order remains in effect until the issuance of a PAR decision.
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Re: RS Apartment & rent reduction/freeze

Postby 575MidTownKid » Sat Sep 02, 2017 12:32 am

Hi there,

Sorry I did not mean to upset you by starting a new thread. But here is the thread that you locked again.

"Hi All,

I just found out there is an "order reducing rent for rent stabilized apartments" order still in effect for my apartment. It was issued on 6/2011 and I signed a lease for the apartment on 8/2012.

I can confirm the order has still not been lifted - but would this at all apply to my lease/apartment? The man who lived in my apartment at that time must have signed the papers and reduced/froze the rent at the amount he has been paying in 2010.

I know all the other tenants that signed this still have not received increases to their rent since the freeze/reduction.

Wondering how this should have impact a vacancy lease that was signed in 2012.

Thank you"
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Re: RS Apartment & rent reduction/freeze

Postby TenantNet » Sat Sep 02, 2017 8:39 am

Read this: http://www.nyshcr.org/Rent/FactSheets/orafac14.pdf
Look at page 3, item #3.

You can either a) take the money that you've paid over and above the level set by the rent reduction order off your current rent. If you do that, make sure you notify the LL by cert mail RRR, or

b) file an overcharge complaint with DHCR. You are supposed to get treble damages for willful overcharges from DHCR (for the first two years of the overcharge), but DHCR often ignores that. Plus it can take years to issue a decision, then the LL could appeal that, which makes no sense.

If it were me, I would take the money off the rent. But don't be surprised if the LL objects or even takes you to court. In my experience, that is for intimidation and LLs will often drop those cases if a tenant pushes back. But that's not guaranteed.

Also consider that the Fact Sheet cites the 2014 rent laws. You should ask DHCR how they interpreted the laws prior to that. I know in the 1980's-1990's, a LL was not able to collect anything in addition to the reduced rent, even if it was a new tenant.

But DHCR had been chipping away on that, allowing vacancy, IAI and MCI increases to be added even in the face of an ongoing rent reduction order. The 2014 amendments seem to reverse this trend, but by how much I can't say.
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