illegal rent increase / rent overcharge

[digerati]

My rent stabilized apartment in the Lower East Side was renting for $398 in 1998. In 1999, the rent jumped to $2000 (currently $2340). The individual apartment major capital improvements are estimated at $10,000 (1/40th = $250). Am I missing something, or do I have a slam dunk case for a illegal rent increase and resulting rent overcharge?

[chelsea]

File an overcharge complaint with DHCR immediately. You are in danger of losing out because of the four-year limit on overcharge complaints, depending on what date in 1998 the large rent increase occurred.

[digerati]

Hi! Thank you. However, I moved into the apartment in Oct. 2000. There was another tenant in the apartment before me. Am I still in danger?

Thanks!

[chelsea]

Oh I see the big increase occurred in 1999, is that right? That gives you more time. But you must act within four years of that increase. The sooner the better.

[digerati]

Any thoughts out there regarding the validity of this case?

Is there any instance in which a landlord can raise the legal rent to $2000, after the previous rent stabilized tenant was paying $400?

I've done the calculations on the MCI increase... and there is no way it could jump to 2K unless he put close to 70K in renovations to the apartment - which he did not.

Thanks to all for help!

[chelsea]

Looks pretty strong to me. Did you factor in the two vacancy allowances though? That could be about 20 percent for each new leaseholder, a pretty hefty increase.

[Phil Cohen]

Be sure to get a rent history, if you don't already have one.
One thing I'm not clear on is this--since the apt. was renting for over $2000, wasn't it deregulated when you rented it? That would mean it was illegally deregulated.
Yes, it does seem like a slam dunk. I'd watch out for a retaliatory eviction, however, if indeed your apt. was deregulated.

[chelsea]

The $2000 rent would only bring deregulation if it were legal, or if it remained unchallenged for four years.

[Phil Cohen]

Yes, but the apt. is deregulated until the DHCR or the court says otherwise, no?

Originally posted by chelsea:
The $2000 rent would only bring deregulation if it were legal, or if it remained unchallenged for four years.

[chelsea]

Not really. It's the other way around. The apartment would remain subject to rent regulation unless the owner could show the legal regulated rent is $2000 or more. The burden is on the landlord. The first or subsequent tenants have the right to challenge that rent within four years, like any other rent overcharge.

I'm having a hard time finding the exact provision, but it's my understanding that a city law requires that, when a vacancy increase brings rent above $2000, the landlord must provide the first tenant with a rent history showing that it's legal. This information from housing.nyc alludes to it:

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2) VACATED APARTMENTS: High-Rent Vacancy Decontrol:
A rent stabilized apartment which becomes vacant and could be offered at a legal regulated rent of $2,000 or more per month is no longer subject to rent regulation.

For example, if the most recent tenant paid a rent of $1,800, the owner could, under current guidelines, legally raise the rent 18-20% for a vacancy lease, which would increase the new rent to $2,124-2,160. Since the legal regulated rent that could be charged is $2,000 or more, the apartment is no longer subject to rent regulation, and the owner would be free to charge whatever the market can bear. More information on how vacancy rents are calculated can be found here.

Under a City Council ordinance, owners are required to disclose prior rent histories to new occupants of deregulated apartments.

Exclusions:
Housing accommodations that become subject to rent regulation because they receive applicable tax benefits are excluded from the above two decontrol provisions. For example, even if the rent that could be charged following a vacancy is at least $2,000, the apartment remains stabilized for at least the duration of the receipt of the applicable tax benefits.

Also excluded from these decontrol provisions are tenants who have faced harassment by their building owner.