If you're a market rate tenant, there's a chance you could become rent stabilized.
There are two similar things going on here. The 2015 renewal of the rent laws (AKA the "Big Ugly") inserted a new provision that would have a similar effect as the Altman case discussed below.
If an apartment becomes vacant with a rent of $1,800, what landlords have been doing for years is add the vacancy increase plus with a lot of apartment renovations (also called Individual Apartment Improvements or IAIs) where he can add 1/40th of the cost to the rent. In many cases, the landlord claimed he did the improvements, but actually hadn't.
He would claim the rent was above the $2000 threshold for high rent deregulation. I've seen units going for as low as $1,300 magically become deregulated with the next tenant.
While the threshold was increased to $2,500 in 2011 and now $2,700 in 2015, the ongoing practice of deregulation before it actually hit the threshold has left huge numbers of rent stab units being claimed as market rate.
Of course when a tenant vacates, the rent is still below the threshold. It's not until there's a new tenant that the rent from any legitimate IAI's or vacancy increases can be applied. In other words, the rent is not really above the threshold. But up until Altman, the courts ignored that little fact with a wink.
What Altman does - and the new language in the rent laws - is say that the rent for the departing tenant must actually reach the threshold before it can be deregulated. So if a new tenant comes in, even if the rent is above the threshold, the unit can't be deregulated until the next tenant after that comes in.
This can save many units from deregulation, keep rents lower, provide protections for services and against evictions. It can also give all the hipsters coming into NYC a reason not to hate RS tenants, if they can become one too.
The problem is whether Altman (which still might have to go to the Court of Appeals) is retroactive or not. The article below suggests that it might be. The language in the new rent laws appears not to be retroactive. And as court go, that question might not be answered by the Altman decision, but by a subsequent case not yet filed.
The author below suggests that Altman might be retroactive, but I've heard from other attorneys who think it is not.
We can all hope that it will be as perhaps a few hundred thousand formerly rent stabilized units could come back under the umbrella of rent regulation.
For another explanation, see the 1997 case Central Park South Associates v. Haynes on the page at http://tenant.net/Court/Hcourt/archive/1997/jan97.html.
Thanks to a New Ruling, Your Apartment might be Rent-stabilized after all
http://www.brickunderground.com/blog/2015/09/rent_stabilization_ruling
9/14/15 - 2:49 PM
Huge news in the world of affordable housing: thanks to a recent ruling, scores of New Yorkers may soon find that their market-rate apartments should legally be rent-stabilized, says Sam Himmelstein, a lawyer who represents residential and commercial tenants and tenant associations.
There was some controversy back in July surrounding Albany's new rent regulation deal, and its language specifying that an apartment had to actually be rented by the departing stabilized tenant before a vacancy at the de-regulation limit—which is currently $2,700—in order for a landlord to legally take it market-rate. A denial of a landlord’s leave to appeal in a recent court case—Altman v. 285 West Fourth, LLC—has solidified and expanded this policy, and sources in the landlord community have told Himmelstein's firm they're waiting for the "floodgates to open" of market-rate tenants seeking to get their apartments brought back under rent-stabilization.
Why is this such a big change? Previously, if a landlord could raise an apartment's rent up to $2,700 (or up to $2,500 on or after June 15, 2015; or up to $2,000 on or after June 24, 2011) in between tenants—usually through a combination of vacancy increases and renovations to the apartment, known as Individual Apartment Improvements (IAIs)—they'd be able to legally take the apartment market-rate, and charge the next tenant whatever they liked. Now, an apartment has to hit that limit while a tenant is still in place, which is much more difficult to do (especially given the current freeze on raising stabilized rents). This means that thousands of rent-stabilized apartments will stay regulated for longer, and that de-regulated ones can potentially become stabilized once again. "The Altman case and the new law are very important in terms of trying to preserve and return apartments to rent stabilization," says David Hershey-Webb, a partner at the firm.
"If you’re in a market rate apartment in a building with six or more apartments, you should question whether you are actually a market tenant," adds Himmelstein's colleague Ronald Languedoc. (This is particularly true in neighborhoods like Williamsburg, Bushwick, and Harlem, where prices have gone up rapidly, and landlords are eager to take apartments market-rate and cash in on the boom.)
How to check: first go to your nearest DHCR office and request your apartment's rent history. (Note: you'll need to have proof on hand that you actually live there, like an ID and utility bill.) Landlords generally stop filing an apartment's rent history after it goes market-rate, so if its history suddenly stops and the apartment's rent was under $2,700 before that time (or $2,500 or $2,000 depending on the date), there's a good chance that, under the new rules, it shouldn't have been de-stabilized. At that point, it may be worth your while to consult an attorney to see if you have a case to bring your apartment back under rent-stabilization. (Remember, even if you pay a relatively high rent, rent-stabilization offers a host of other protections, including a limit on how much your rent can be raised every year, and the requirement for your landlord to offer you a lease renewal.) But one word to the wise: do all your research before you talk to your landlord, as market-rate tenants are vulnerable to eviction, and most landlords aren't too keen on being told you're about to bring legal action against them.