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Large Jump in DCHR Rent History Rent

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Large Jump in DCHR Rent History Rent

Postby Daedalus » Thu Apr 13, 2017 2:56 pm

I am currently in an apartment with "preferred" rent in a RS (J-51 abatement) building, but the unit is supposedly de-regulated.

I obtained the history from DHCR and found the following:
2010: ~$8XX rent RS (Tenant 1)
2011: ~$2,1XX rent (Vacancy/New tenant - Tenant 2)
2012: ~$2,2XX RS (Tenant 2)
2013: ~2,3XX RS (Tenant 2)
2014: ~2,3XX RS (Tenant 2)
2015: ~2,4XX RS (Tenant 2) -- Vacancy

The legal rent was indicated to me as $2,9XX. That makes sense to me based on a 20% increase Tenant 2 moved out.

What I'm trying to figure out was whether the increase from ~$8XX to $2,100 was justified. 20% vacancy increase (if that was the % in 2011) would be to $1K. There was a relatively significant renovation, but I understand the formula is 1/40th of the cost. Meaning if the increase was ~$11XX, it would mean the renovation cost would be ~44K which would be high for a studio unit.

Can anyone here provide guidance if that is the correct calculation? Is there any way to validate whether there are any issues here without asking for documentation of the cost of the renovations (which would presumably tip off the landlord)?
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Re: Large Jump in DCHR Rent History Rent

Postby TenantNet » Thu Apr 13, 2017 3:32 pm

"Preferential Rent" is a fictional device applied to RS apartments. If does not exist for non-regulated units. Why? Because there is no "legal rent" for unregulated units.

Also, there are no RS buildings. Buildings may have RS units, RC units or unregulated units. The buildings themselves are not regulated by rent stabilization.

If the rents in the history are even numbers, i.e, $700 or $800, then those are likely fraudulent rents (unless you were rounding).

This appears to be a high rent situation, or the LL claims it to be after Tenant 1 vacated. He probably got the vacancy increases then did (or claims) to have done sufficient work in the unit as Individual Apartment Improvements (IAI) where the rent could be increased by 1/40th or 1/60th the amount of the work done. You need to see which percentage applies in your case. See the second bullet at http://www.nyshcr.org/Rent/RentAct2011.htm

A 1/84th increase applies to building-wide MCIs, not IAIs. You need to see what the LL claims he did for renovation work and the claimed costs. That's difficult or near impossible given it took place more than 4 years ago. Can you get in touch with Tenant 2 -- He/she might have the old lease that might indicate the renovation details?

Also see when the unit became vacant as the threshold for high rent vacancy changed in 2011. See the same page, third bullet.

You just changed the numbers while I was typing this reply, so it's difficult to make sense of your question.

You are beyond the 4 year SOL and might be impossible to open that up unless you have a clear case of fraud. The 4 year SOL applies to overcharges, but not to RS status. You might get a determination on that, so look into the high-rent threshold and the actual date of the vacancy.
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Re: Large Jump in DCHR Rent History Rent

Postby Daedalus » Thu Apr 13, 2017 3:51 pm

I appreciate the prompt and helpful response. I did change the numbers to round them for the sake of anonymity.

The building has less than 35 units, so the 1/40 ratio would apply from what I understand. So this history (and the increase from 2010 to 2011) could be kosher if the cost was $44K or more. Is there any way to verify that via the DHCR? The rent history I received didn't have any information about the IAIs.

My focus is more about the rent regulated status of the apartment and the legal rent they should charge, rather than the overcharging for the past few years. It sounds like it could be possible that the cost was way less than $44K. ($10K would mean that the rent would probably be $~800K*1.2 + $250 or $1,250 in 2011). And my guess is that would affect all of the subsequent numbers through present based on the approved year over year increase for RS units, right?
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Re: Large Jump in DCHR Rent History Rent

Postby TenantNet » Thu Apr 13, 2017 4:01 pm

Get in touch with Tenant 2 and see if he/she has the old lease with the RS rider indicating the work that was done (and the cost).

See if Tenant 2 filed any cases challenging that increase. DHCR can print out a "Building Detail" with all cases that have been filed in a particular building. With that and a docket number, you can FOIL the case file for that proceeding.

See if the vacancy and improvements occurred AFTER the 2011 changes in the law. If after June 24th, then the high rent threshold was increased to $2,500, and it's possible the unit should still be stabilized. I would go with the date of the vacancy, or the date that Tenant 2 took occupancy. See which one applies and then argue that.

For sake of argument, if you accept whatever IAI amount the LL claims, the registration shows approx. $2,100.

Your first post seems to have mixed things up. WHEN did the LL claim the unit was deregulated? Was it on Tenant 1's leaving, or on Tenant 2's leaving? If the latter, you'll need to look at similar changes to the law in 2015 as the threshold for high-rent increased again.
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Re: Large Jump in DCHR Rent History Rent

Postby Daedalus » Thu Apr 13, 2017 5:44 pm

I double-checked and it still shows RS status as of 2015 (when I signed my lease). I don't have any history after that. It shows a legal regulated rent of <$2,500 for 2015. However, I was not given a Rent Stabilized lease and there was no rider attached.

It does start showing legal and preferential rent starting in 2011. And the 2011 number on the DCHR rent history is a round number of $2,100, which does look suspicious given the 20% vacancy and IAI calculation.

As for the 2011 vacancy, it appears to have been after June 24th. So either way it looks like the apartment should have been rent stabilized at least until when I signed my lease. It doesn't appear that anyone has paid more than the threshold of $2500 in 2015 and is still below the $2700 new threshold.
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Re: Large Jump in DCHR Rent History Rent

Postby TenantNet » Thu Apr 13, 2017 6:05 pm

When did you move in? Are you Tenant 3? Approx what time of the year in 2015 did you move in? (that can be important as the laws changed again.

Does your original lease state that it is RS? Did you get any renewal leases? If so, were they on DHCR form RTP-8?

On your original lease, is there a Preferential Rent rider? That should be included ONLY on RS leases.

How can you have a "legal regulated rent" when you say it's not rent stab? that makes no sense at all.

Have you gotten any DHCR registrations at all? (usually they are issued in July).

I hate to say this, but you should have a knowledgeable person look over all your documents, either a tenant clinic or attorney. I can only go so far on the forum without having all the documents in front of me.
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