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Suspicious deregulation by previous landlord?

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

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Suspicious deregulation by previous landlord?

Postby fluxrad » Thu Mar 10, 2022 12:48 pm

Hi! I’m hoping you can advise on an issue my friend is facing. He’s been in his Brooklyn apartment for six years and the building's new owner recently sent him a lease renewal with a 15% rent increase. He requested the unit’s rent history from the city, and it says it was deregulated in 2014 under the basis of “high rent / high income.” But the last regulated tenant (his old landlord's father, he tells me) was listed as paying $775 in 2013, and I don’t see any way his daughter got (legitimate) approval to rent it at $2500 with the moderate renovations she did in 2013/2014 after he died. (My friend moved in two years later, and has never paid that much.) I also don’t believe she had a tenant in there making $200k.

What would you advise, given that a) it’s been 8 years since the suspicious deregulation, and b) the building now has a new owner? My friend can’t afford the (outrageous) 15% increase, but also can’t afford to move right now.

(For what it’s worth, the new owner sent him his renewal 2.5 months before the end of his current lease — my understanding is that they needed to give him 3 months notice to try to raise it more than 5%.)
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Re: Suspicious deregulation by previous landlord?

Postby TenantNet » Fri Mar 11, 2022 5:35 am

First, you say the rent history came from the city. Was it the city - if so, what agency? (if a J51 or 421a and a few other flavors, the city might have something)

But more than likely it came from the DHCR (or just HCR), a stage agency. That can make a difference as to any deregulation. If DHCR, then the so-called rent history is not a determination by the govt., it's a compilation of the yearly registrations submitted by the landlord and while it may offer some evidence, in itself is not a legal determination.

The bad news is that in 2014, LLs could deregulate for high rent or high income if the rent was higher than the threshhold. More than likely it would have been high rent (high income was always harder to get) and any jump would have been due to a LLs claim of improvements. In 2014, that would have been $2,500. See this page: https://hcr.ny.gov/system/files/documen ... 2-2020.pdf

Also see https://hcr.ny.gov/system/files/documen ... 7-2021.pdf

You have to look at the RGB and vacancy increases applied to the rent at the time, then the improvements. Yes, many LLs lie, but you need to have some evidence, or the LL must have no evidence. That's not so easy. In some cases, you need to see what items the LL is using to claim as improvements and how much was spent. They will inflate the costs and DHCR seems to buy into it. Some tenants have even hired forensic architects or engineers. It all depends on the case. Remember DHCR is not your friend.

In 2014 the LL could pass-along 1/40th of the costs of improvements, so to see how the rent was calculated, from the new rent, take away vacancy and renewal increases (RGB), the any MCIs, and with the remainder, divide by 40 and that should be the cost of improvements. So if the LL is claiming $5,000 cost for a new stove, you will know something is wrong.

There is a 4-year limit on overcharges (search for "Regina" on this forum), but no limit on RS status.

You could negotiate with the LL. Some will and some won't.

The time of the notice depends on the length of occupancy or lease term. According to Lebovitz (viewtopic.php?f=24&t=13981), if the occupancy is greater than 2 years (or the lease term is greater than 2 years), then there must be 90 days' notice for rent increases 5% or more.

How you treat that is tactical. You could ignore the notice and let the LL know when you continue to pay the old rent. "you never sent me a proper notice..." or you could notify him now. Either way, you might get a few months out of it.

Lebovits says, "if notice not given, tenancy continues on same terms until notice is given and required time passes." But consider if the LL is really ticked off, he might just refuse to renew, at which point the tenant would be in a holdover status if he doesn't leave, or commences a claim of RS status.

You could also consult with a tenant attorney as to the strength of a claim of inadequate improvements.
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