Are you paying the legal rent? Or are you being overcharged?

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Are you paying the legal rent? Or are you being overcharged?

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QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

A bunch of people in my building are now suing the landlord because he's been overcharging for rent. Our building was built in 1920, and we're all covered by rent stabilization. Check this out.

Which apartments are under Rent Stabilization?

In New York City, apartments are under rent stabilization if they are in buildings of six or more units built between February 1, 1947, and December 31, 1973. Tenants in buildings built before February 1, 1947, who moved in after June 30, 1971, are also covered by rent stabilization. A third category of rent stabilized apartments covers buildings with three or more apartments constructed or extensively renovated on or after January 1, 1974 with special tax benefits. Generally, those buildings are only subject to stabilization while the tax benefits continue or, in some cases, until the tenant vacates.

NYS Home and Community Renewal
http://www.nyshcr.org/Rent/about.htm

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

btw, the folks at 55 Hanson, Rm 702, are helpful. That's the Brooklyn Rent Office, just down across from the back of Atlantic Center shopping mall.

# Posted 9 mos ago
veets
rocking it
Joined: Feb '07
Posts: 2,535

and the Metropolitan Council on Housing

# Posted 9 mos ago
tateinbk
above average
Joined: Jun '11
Posts: 503

It is possible those apartments have legally become de-stabilized. If the legal rent went above $2000 or the landlord did extensive renovations for example. Personally I'm not paying the legal rent but the preferential rent. Was that the question you are asking?

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

Thanks for posting, tateinbk. Oh, I'm not asking a question. For instance, I know the landlord is charging $1800 for a studio and the legal rent $1,194. I'm just spreading the news so folks can learn about their rights and protections. If the landlord has been overcharging intentionally, the tenant can sue for 3x's the amount overcharged.

Also, before an apartment can be deregulated, the legal rent must exceed $2,500. Here's more info from the website I listed above on that topic. Cheers!

FYI
What is High-Rent Vacancy Deregulation & High-Rent High-Income Deregulation?

For the past two decades, the Rent Laws have provided for the deregulation of apartments based on rents and occupant's incomes reaching certain levels.

The Rent Act of 2011 has modified these levels and now provides for the deregulation of apartments based on a rent level of $2,500 and an annual income level of $200,000, in certain conditions. Previously, the deregulation levels for rent and annual income, had been $2,000 and $175,000, respectively.

High-Rent Vacancy Deregulation

Effective June 24, 2011, if an apartment is vacant and the legal rent reaches $2,500 or more, such apartment qualifies for permanent deregulation and would no longer be subject to either rent stabilization or rent control.

High-Rent/High-Income Deregulation

Effective July 1, 2011, which essentially applies to the 2012 annual application cycle and beyond; in order for DHCR to issue an order of deregulation, the subject apartment must have had a legal rent of $2,500 or more and be occupied by persons whose total annual federal adjusted gross incomes as reported on their New York State Income Tax returns, have been in excess of $200,000 for each of the two preceding calendar years.

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

btw tateinbk, what is "preferential rent?"

And, have you seen the rent history record for your apartment? You can get it at DHCR, and they'll explain what it can mean to you.

# Posted 9 mos ago
landlord
above average
Joined: Mar '08
Posts: 334

preferential rent is when the landlord charges LESS then the legal registered rent. Most of my apartments fall into that category.

as an example: I have an apartment that is registered at $2434.20 at the DHCR. However, I am charging much less then that. When registering the apartments online or when signing a lease there is a check box stating that this is a preferential rent and not the legal rent.

You must understand that this is by choice of the landlord. He can always raise the rent to the legal registered rent once the lease expires if he chooses.

# Posted 9 mos ago
booklaw
admin
Joined: Nov '07
Posts: 2,409

Landlord, I'm curious: why do you charge less than the legally permissable rents?

# Posted 9 mos ago
whynot_31
Former Lurker
Joined: Mar '06
Posts: 16,106

While I do not know landlord's motivation, many landlords do this for good tenants. If the relationship ever sours, it gives them the ability to impose a huge rent increase to get the tenant out.

They use this method because landlords "almost always" have to give rent stabilized tenants renewals, and this ensures that the tenant remains "nice" as opposed to acting "entitled", and good tenants are hard to find ....you want to hold on to them.

For better or worse, the change on Nostrand is going to make the change on Franklin look minor.

# Posted 9 mos ago
tateinbk
above average
Joined: Jun '11
Posts: 503

Also, once the legal rent goes over the limit ($2500 in this case I guess) the apartment de-stabilizes regardless of what the preferential rate is. In my building my apartment has had a lot of turn-over. At vacancy the rent can go up $200 on top of the regular raises, so if there are frequent changes, the legal rent can easily out pace the rental market. As someone mentioned, every time I re-sign the lease I have to acknowledge that if the economy gets better and the landlord wants to raise it up to the legal rent, he can at the next lease signing. The difference between legal and preferential rates is about $300 a month for me.

I had a wonderful landlord who didn't always raise the rent the allowed amount. Instead of raising it 3% for one year he would do 1.5%. That is a good way to keep your tenants happy. Too bad the place was way to small for me now.

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

Ok, I'm learning a lot here. Thanks. I feel so lucky that my rent has raised only $450 in all of the past 20 years, and that has allowed me to save for the future.

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

I mean $350. (Above.)

# Posted 9 mos ago
Mamacita
Stuck in the middle with you
Joined: Dec '06
Posts: 9,500

Are you really living in Park Slope? I'd be curious to know which buildings in PS are still rent stabilized (if you don't want to post your address, PM me, I am genuinely interested.)

(\__/)
(=’.'=)
(”)_(”)

# Posted 9 mos ago
landlord
above average
Joined: Mar '08
Posts: 334

All buildings in park slope with 6 apartments or more are rent stabilized. However, because of the huge turn-over in apartment rentals, the legal rents can be very high. Every time a tenant moves out the rent is increased on paper by 17% or 20% (this is without any renovations done to the apartment).
Park slope has lots of young people who tend to move often. Those landlords that charge less then registered rent are simply being nice! On average my tenants pay 40% below legal rent. The lowest is paying 110% below registered rent (he is an old high school friend of mine)

# Posted 9 mos ago
whynot_31
Former Lurker
Joined: Mar '06
Posts: 16,106

There also situations in which the legal rent exceeds that which that market will bear, hence, the landlord can legally charge it but can not in reality get anyone to pay it.

For example, this ad discusses a building for sale in Bushwick, and states that the current rents are below the HCR legal rents.

http://www.terracrg.com/setups/7_Ridgewood_Place.pdf

A wise buyer does not merely see this ad and conclude s/he can buy the building and simply increase the rents; they also consider the market.

For better or worse, the change on Nostrand is going to make the change on Franklin look minor.

# Posted 9 mos ago
cremate
getting it
Joined: Jul '11
Posts: 181

Do you have a board member discount?

landlord said:
On average my tenants pay 40% below legal rent. The lowest is paying 110% below registered rent (he is an old high school friend of mine)

# Posted 9 mos ago
bohuma
above average
Joined: Aug '08
Posts: 466

It is also possible, through vacancy increases and renovation that the legal rent is higher than the market rent. Most professional landlords will keep records and try to deregulate any vacant apartment so that they can excape the legal nightmare that is NYC rent regulation. The rent levels before a vacant apartment destabilized was increased from $2,000 to $2,500 for apartments in larger buildings in the last round of rent regulation horsetrading in Albany. I lived in a destabilized apartment in Queens in 2006 - 2008 that had a rent of $2,025 and a preferential tenant discount of $275 for a net rent of $1,750 - the landlord was likely trying to keep the records in case Albany increased the rent level, which they did.

Most landlords who offer preferential rents are not being nice, they are charging market rents while preserving the deregulated status of their apartments.

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

Like I said, my landlord is overcharging tenants, and they are suing--successfully. It's easy to have your rent history mailed to you, just contact DHCR. If the history provided by the landlord is questionable, their reps will go over it with you and start a case for you.

If you sue, you can get 3 times the amount you were overcharged if it is proven that the landlord overcharged you intentionally. Check it out.

# Posted 9 mos ago
tateinbk
above average
Joined: Jun '11
Posts: 503

If you sue it shows up on your record that you had a landlord dispute. It does not say if it was your fault or the landlord. In the future, it can make it harder to rent another place with that when the realtor/owner runs the checks. Before suing, people should be aware of that too. It may not seem fair, especially if the landlord is at fault, but is a big reason why people often move and do their homework before signing the next lease.

# Posted 9 mos ago
whynot_31
Former Lurker
Joined: Mar '06
Posts: 16,106

I think I would sue only if I was planning to move to the suburbs with my winnings.

For better or worse, the change on Nostrand is going to make the change on Franklin look minor.

# Posted 9 mos ago
landlord
above average
Joined: Mar '08
Posts: 334

tateinbk is 100% correct. sometimes its better to simply walk away. if you sue the landlord it will appear in housing court records and there is no way other landlords would rent to you....so be very careful.

# Posted 9 mos ago
QueenJ
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Joined: Jun '12
Posts: 41

Interesting. Thanks for the insights.

The first day I moved in, another tenant told me to check my rent history because she had been overcharged and would be living there free for 11 months because DHCR settled her complaint. After that, she moved but had no problem renting a new apartment. I guess my neighbors are planning to stay awhile. Or, looking at the outcome of being overcharged $600/mo for 2 years: $43,000. Ca-ching!

Yeah, that's downpayment on a nice split level in the 'burbs.

# Posted 9 mos ago
bohuma
above average
Joined: Aug '08
Posts: 466

QueenJ said:
Or, looking at the outcome of being overcharged $600/mo for 2 years: $43,000. Ca-ching!

Yeah, that's downpayment on a nice split level in the 'burbs.

Less attorney's cut (at least one third), less income/capital gains taxes = not nearly enough for a downpayment on a split level in any 'burn within commuting distance of New York City. Added to which you will find that your landlord will hate you and do everything within his/her legal power to make life miserable.

If your neighbors win their lawsuit, your landlord is foolish for trying to get away with breaking the law. NYC rent regulations are quite complex and anyone attempting to deal with them would be well advised to dot all their i's and cross all their t's because you will get caught and it will cost you. Same applies to all those tenants illegally subletting their rent regulated apartments - housing court isn't a pleasant experience for them either.

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

Hahaha, lawyers and capitals gains taxes! Good point.

Though, some tenants in my building have not used lawyers, just done paperwork with DHCR. Others consulted with Brooklyn Housing and Family Services for assistance, though not legal representation.

About the landlord, I think she is foolish, and she may already "hate" her tenants, and that's why she disregards the law. If she attempts harassment like cutting heat or hot water building-wide, she will be fined. We've been through that already. Her threats are meaningless.

# Posted 9 mos ago
Cool The Kid
We out this mother effer
Joined: Jan '07
Posts: 1,385

Something about this just smells like a slimy come up.

For example is that 1800 market rate? A system that prohibits landlords from charging market rates on apts is bogus

[
Mamacita said:
I <3 CTK

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

Bogus, as in counterfeit or a sham? No. It's the law in NYC. While it can seem unfair to landlords, rent stabilization laws protect tenants and helps them hold onto their homes in various economic climates.

And rent control helps seniors on fixed incomes, and because the city has a growing homeless population, these laws also make sense to me.

(Cool The Kid, please help me with my English. What is, "slimy come up?")

# Posted 9 mos ago
whynot_31
Former Lurker
Joined: Mar '06
Posts: 16,106

related thread:

http://brooklynian.com/forum/brooklyn-politics/nyc-housing-rent-control-battle-round-99999999999

For better or worse, the change on Nostrand is going to make the change on Franklin look minor.

# Posted 9 mos ago
QueenJ
How ya doin'?
Joined: Jun '12
Posts: 41

Thanks for the link--I didn't know it was there. Appreciate it.

# Posted 9 mos ago
whynot_31
Former Lurker
Joined: Mar '06
Posts: 16,106

While the rent stabilization cap was recently raised to $2500, overall, I see the proponents of stricter rent stabilization and more government intervention as slowly losing ground.

For better or worse, the change on Nostrand is going to make the change on Franklin look minor.

# Posted 9 mos ago
grandzu
getting it
Joined: Jun '05
Posts: 81

Also depending on your lease, if you sue and lose, you might have to pay the landlord's legal fees.

# Posted 9 mos ago
whynot_31
Former Lurker
Joined: Mar '06
Posts: 16,106

New York City tenants should be aware that the old rule that you can only challenge the rent of a rent stabilized apartment going back four years has changed because of this decision by the Court of Appeals (the highest court in New York State):

http://www.nycourts.gov/reporter/3dseries/2010/2010_07379.htm

That decision affirmed this 2009 decision by the Appellate Division:

http://www.nycourts.gov/reporter/3dseries/2009/2009_06653.htm

And, that decision affirmed this 2007 decision by the Supreme Court:

http://www.nycourts.gov/reporter/pdfs/2007/2007_34184.pdf

According to this article

http://www.tenant.net/alerts/articles/complaining.html "Complaining about a rent overcharge in New York City" filing a rent overcharge complaint with DHCR is not recommended because it is considered pro-landlord.

For better or worse, the change on Nostrand is going to make the change on Franklin look minor.

# Posted 8 mos ago
whynot_31
Former Lurker
Joined: Mar '06
Posts: 16,106

8th Annual West Side Tenants Conference

New York City’s largest tenant’s conference is right around the corner! This year’s conference will offer workshops on a wide variety of housing topics such as: housing benefits for seniors, how to find affordable housing, fighting tenant harassment, bed bug remedies, how to make your home more energy efficient and much more. Come to this year’s conference to make sure it’s the best one yet.

What: 8th Annual West Side Tenant’s Conference
When: Saturday, November 3rd, 2012 at 9:00 am
Location: Fordham Law School- 140 W 62nd St

For more information or to RSVP contact Matt Klein at 212-716-1664 or mklein@hcc-nyc.org.

http://westsideneighborhoodalliance.wordpress.com/2012/10/04/saturday-113-8th-annual-west-side-tenants-conference/

For better or worse, the change on Nostrand is going to make the change on Franklin look minor.

# Posted 7 mos ago