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421A rider -- any harm in signing it?

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

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421A rider -- any harm in signing it?

Postby MrHolland123 » Thu Dec 29, 2022 2:25 pm

Grateful for any help here! We’ve been in a rent stabilized building for the past 2 years. This year, for the first time, the landlord included a 421-A rider, noting our apartment was deregulated this year. They did not raise the renewal price beyond the 3.25/5% increase.

We were planning to sign the full renewal lease and rider, take the 2 year option, and then later potentially report to the city that the 421A lease rider wasn’t included in the prior leases (to try and keep it rent stabilized).

Is there any downside to signing the 421-A rider now to get the low renewal price and then dealing with this in ~2 years?

------
More details:

We did call DHCR and NYC Finance. DHCR told us to call Finance and see about the tax abatement. Then NYC Finance told us our address showed as rent stabilized, without a 421A exemption on file, and that they couldn’t tell us anymore than that. Weirdly said their tech platform changed and they can’t see if 421As expired anymore. Wasn’t very helpful :/.

Building was apparently constructed in 2000, so timing makes some sense. Rider says “Pursuant to real property tax law section 421-A the apartment shall remain subject to the rent stabilization law, as amended, only until the twenty year period of the tax exemption expires on approximately June [XX], 2022 …. Since your apartment therefore wil no longer be subject to the rent stabilization laws …. the landlord may charge a market rent for your apartment”.

Called the management company and they similarly said it’s no longer rent stabilized. Saving grace is that they 1) offered low renewal terms and 2) i think messed up by not including the rider in prior leases according to the fact sheet (https://www1.nyc.gov/assets/hpd/downloa ... -sheet.pdf)
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Re: 421A rider -- any harm in signing it?

Postby TenantNet » Fri Dec 30, 2022 1:48 am

Thanks for your question. The entire issue of 421-a can get very mysterious at times. We asked some attorneys and advocates (off-list) to offer their guidance. Here are their responses (below).

Understand there might be some difference of opinion among them. If there are further replies, we'll post them here.

As Attorney # 2 says, he's reticent to recommend that tenant sign any form the landlord asks. We feel the same way and LLs know there's always an element of fear with tenants. That's intimidation in our view. But OTOH, there may be times - including your personal circumstances - where you aren't up to getting into battle. We see that a lot with elderly tenants. In the end, that's your call.

So you do have to consider the downside if you choose to decline. And yes, it's best to have your own tenant attorney who does know your personal situation and all of the background.

Attorney #1

The landlord must show that they gave you the rider with the initial lease if they wish to de-regulate you. Signing the rider now should not be fatal....You can always sign and add below your signature: "reserving all rights under the Rent-stabilization Laws"

Attorney #2

But why sign the 421-a rider at all if a LL is required to offer a tenant a renewal lease on the same terms and conditions as an expired lease (9 NYCRR §2422.5)?

Advocate

If the landlord did not include the rider in the initial lease, no decontrol. Therefore it probably doesn't matter if the tenant signs the rider or not. (They need to be prepared to defend themselves and will likely need a lawyer's help.) Make sure that the tenants have the original lease and keep it in a safe place.

Attorney #2

All true. I am just against tenants automatically signing every form put in front of them.
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Re: 421A rider -- any harm in signing it?

Postby MrHolland123 » Sat Dec 31, 2022 3:55 pm

Hi TenantNet. Thank you SO much for your help and for getting the help from the Attorneys and Advocates. This was such a helpful resource, and we are very grateful! We have gone ahead and signed the rider, including the suggested language below our signatures, as to reduce the hassle for now.

However, we will now look to meet with a tenant lawyer to get ahead of the situation. It looks like "Housing Conversation Coordinators" offers Monday night legal clinics without income restrictions, so we will look to receive help there. Please let us know if there are any other free tenant legal resources without income limitations that you suggest.

Thank you so much again!
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Re: 421A rider -- any harm in signing it?

Postby TenantNet » Sat Dec 31, 2022 4:12 pm

FYI, we do not support HCC as an organization - they have sold out that neighborhood for many years (just look at Hudson Yards, which they supported despite community opposition ... and still support luxury towers that force residents out). And they will probably hit you up for a donation. I've gotten three emails from them today already.

We do not know the current crop of attorneys there, some of whom my be quite good (or not).

However, their legal clinic is usually staffed by attorneys who volunteer and are not part of HCC itself. I wouldn't blame the volunteers.
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Re: 421A rider -- any harm in signing it?

Postby MrHolland123 » Sat Dec 31, 2022 4:15 pm

Oh wow thank you for letting us know. Are there other organizations you would suggest for Manhattan based tenants, not facing eviction and without income restrictions? No worries if not. Thank you again for all the help!
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Re: 421A rider -- any harm in signing it?

Postby TenantNet » Sat Dec 31, 2022 6:36 pm

As we said, the volunteer attorneys likely have no affiliation with the HCC organization, and you might get some very good advice.
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