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Rent Stab rent increases 2021-2022 - Commentary

Rent stabilzed lease renewals and how to apply Rent Guidelines Board (RGB) percentage increases

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Rent Stab rent increases 2021-2022 - Commentary

Postby TenantNet » Thu Jun 24, 2021 5:41 am

See separate posts for details of the RGB order issued on 6/23/21.

Rent Stabilized tenants always ask about a strategy in signing leases. If your current lease is for 2 years and extends until on or after 10/1/22, then this RGB increase will not apply to you. The following year's RGB order would apply to you (the one that takes effect on 10/1/22). That increase could be higher (likely), the same, or lower.

If your rent stab current lease is for one year and a new lease would commence between 10/1/21 and 9/30/22, then this order will apply to you.

Strangely, this new order splits the first year into two 6-month periods, zero percent increase for the first year and a 1.5% for the second six months ... a strategy never before imposed by the Board in it's 53 year history.

One view might be that the first six months of a new "indexed" renewal lease might be an extension of a current lease, not a renewal. But the law might not allow for hybrid 1.5 years leases, or for anything under one year (i.e. the second six months). For example, Section 26-510(i) of the NYS Rent Stabilization Law states, "Maximum rates of rent adjustment shall not be established more than once annually for any housing accommodation within the board's jurisdiction. Once established, no such rate shall, within the one-year period, be adjusted by any surcharge, supplementary adjustment or other modification."

Further, Section 26-511(4) of the same RS Law requires any Rent Stabilization Code to include "provisions requiring owners to grant a one or two year vacancy or renewal lease at the option of the tenant..."

This is without any comprehensive research. But given the law's provisions, is a split lease like this even legal?

Wacky? Smart? Who's to say? And if not legal, what's the alternative? How would a court hearing a challenge rule? Hard to say. As Mr. Richard Feder from Fort Lee, NJ, would say, "if it's not one thing, it's another."

Tenants have had a tough time, especially with the pandemic and over 20 years of deregulation (in many cases illegal as the state refuses to effectively enforce the RS law). But as much as we like to blame old Bill DB, if you include this latest order, then three of the past eight years have been 0% increase for 1 year leases with other increases for below 2%. If Eric Adams becomes mayor, expect the board to tilt to landlords. Normally 2 year leases are better in the long run, but maybe not this coming year.

Landlords will invariably claim they have lost money during the pandemic with many tenants unable to pay rent. But even if one has some level of capitalist sympathy, it's had to feel sorry for those landlords who charge $2,500 or more for units that might be worth [only] about $1,000 or so under rent stabilization, and which in many cases were illegally deregulated. So a loss of such a huge windfall is not availing to their pleas.

Note: the RGB has not yet posted the new Order No. 53; when it does, we'll send it out.
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Re: Rent Stab rent increases 2021-2022 - Commentary

Postby Landlords Boy » Mon Jun 28, 2021 12:12 pm

The six-month thing is sheer mischief. Three days to go to the 90-day October deadline and still no new RTP-8. I'm going to have to scrawl upon the current one. Every RS tenant is going to complain...it's worse than when they added that useless RA-LR1...
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Re: Rent Stab rent increases 2021-2022 - Commentary

Postby TenantNet » Mon Jun 28, 2021 12:40 pm

As you know, the RTP-8 form is from DHCR, not the Rent Guidelines Board (a city agency). The current RTP-8 is from June 2020 and is available here.

Has the RSA offered any guidance on how to present a lease offer that now has two 6-month rates for a one-year lease? Isn't that what landlords are paying the RSA for?

And hasn't there always been issues when LLs must make a lease offer but the RGB percentage is unknown? How do you handle that? The form has provided for that unknown (check box on Column C), but before that didn't they just tell owners to include a side letter to the tenant?

BTW, a number of attorneys have raised questions about other areas of the rent laws and how the new RGB order will be implemented or folded in, i.e., MCI, IAI, SCRIE, Rent Control increases (apparently are now a running average of RS increases), yearly DHCR RS registrations, rent reductions and probably more.

The RGB has now posted a summary of the new order, at https://rentguidelinesboard.cityofnewyo ... d-summary/

Note that this is not the actual order, which usually appears mid-July.

No matter what one sees as this new order "striking a balance," operationally it could end up being a nightmare.
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