City Landlord Withheld Leases

by MICHAEL FINNEGAN
Daily News Staff Writer, June 11, 1997
A Manhattan landlord withheld new leases from his tenants for months as Sunday's threatened expiration of state rent laws loomed closer then offered them renewals above the rent hike limits, records show.

Tenants in the eight-unit building at 105 Stanton St. on the lower East Side had rent-stabilized leases that entitled them to get renewals several months ago.

But landlord Herman Kahan let at least four leases expire without offering renewals until last Saturday after tenants filed complaints with the state, the records show.

"It's our whole lives in the balance here," said tenant Nicholas Weinstock, a writer. "It's terrifying."

Kahan argued that his building is exempt from state rent laws, so he doesn't have to offer lease renewals. But city Finance Department spokesman Richard LoConte said Kahan gets a tax break that requires him to comply with the rent laws which entitle tenants to automatic lease renewals.

Similar complaints of landlords failing to offer lease renewals to tenants in stabilized apartments have skyrocketed as the Sunday expiration of state rent protections for more than 2 million tenants draws closer, according to tenant advocates and the city Rent Guidelines Board.

"The phone never stops ringing," said William Rowen of the Metropolitan Council on Housing. "Landlords are anticipating the end of the rent laws. They think although they're probably wrong that if they refuse to renew a lease now they'll benefit later on."

With Gov. Pataki and legislative leaders deadlocked over proposed reforms, the law could lapse, enabling landlords to charge free market rents as soon as leases expire.

But until midnight Sunday, landlords must continue offering renewals to tenants in rent-stabilized units at least four months before the current leases expire. By law, allowable rent hikes are capped at 5% for one-year leases or 7% for two-year terms.

Fearing a tenant backlash, real estate industry leaders called on landlords yesterday to continue complying with the law even if it expires.

"We will not evict," said Joseph Strasburg, president of the Rent Stabilization Association, a group of 25,000 landlords. "We will comply as if the law has in fact been passed." If the laws expire, he said, state lawmakers are likely to reach a compromise deal in the weeks ahead to restore most of the protections retroactively to Sunday.

Developer Lewis Rudin, whose family empire includes more than 3,000 rental units, said the landlords would police their industry to make sure there's no legal violations or tenant harassment.

But at least six of the tenants whose leases are up for renewal in the lower East Side building said the landlord exceeded rent-hike limits and offered them only one-year renewals, with no option for two-year terms as required by law.

Melvin Chua and his roommate Alisa Tang, for example, were offered a one-year renewal at $1,750 a month. The legal cap is $1,732.

"This is a clear violation of what's written in the law," Chua said.

Kahan said he "decided not to go through with" the property tax break that requires owners to comply with the rent laws. But city officials said Kahan has already benefited from the tax break.