Rent Controlled Fraud? - Need advice

[westvillagetenant]

Hi TenantNet:

I found your forum/various posts online and figured I should post here directly to seek out your advice on a rent regulated housing matter.

At the behest of my ex-girlfriend, I moved into her 300sqft old studio apartment in the West Village once she vacated. At the time we were dating, we both thought that the rent seemed unusually high for a 1860s townhouse (there are only 6 or 7 units in the townhouse) and figured something might be fishy about the rent being charged. Particularly, we noticed that the only public listing for her unit on Streeteasy showed the unit rented for 2,250 back in 2011 and in 2021 my ex-girlfriend was charged exactly 2,250 before they jacked it up $3000 (which is what I am currently paying). I know Streeteasy can be unreliable but this is the only data point we have as rents charged in the past for the unit. I recently signed a NEW one year lease for this unit for $3000 a month, I am the only person on the lease. There is no mention of rent regulation (stabilized or control) in the lease. It reads like the usual fair market lease.

This week I received the rent history for the unit and I think what I found is very interesting.

The only rent listing on the rent history is from 1984 for a RENT CONTROLLED (RC) tenant who paid $308 in 1984. Based on my research, that tenant died in 1998.

On the rent history, every year since 1984 until 2023 was marked as *RENT CONTROL - REG NOT REQUIRED*. It was registered as *RENT CONTROL - REG NOT REQUIRED* in 2023. I've read in other posts that RC units only needed to be registered once but does that mean that the DHCR in all subsequent years automatically registers it as RC - REG NOT REQUIRED? Or is this moniker self reported by the landlord? Would the 4 year "look-back" period preclude me from taking action on this?

I spoke with someone over at the DHCR who recommended that I file a complaint. The DHCR contact surmised that it could be that the unit was deregulated LEGALLY at some point or perhaps illegally but it would be impossible without investigating.

I intend on seeking legal counsel from a tenant's rights lawyer but I figured I could reach out to you first to get preliminary feedback.

Is it possible that my "real rent" is actually much lower than $3000? For what it's worth, my townhouse is run by a management company and not by a mom and pop landlord. Why would they register the apartment as RENT CONTROLLED even in 2023 if it isn't? Something does not seem right.

What are my options here?

[TenantNet]

Sorry for the delay in responding.

You say you took occupancy once your ex-GF vacated. On what basis was the occupancy? Was this a new lease, did you take on the remainder of the old lease, did you exercise some form of succession, are you subletting, what is the nature of your occupancy? I don't know if it makes a difference, but it's good to have all the facts. OTOH, you say later that you just signed a new lease, so I'll assume you are now the prime tenant on what the LL says is an unregulated lease.

2023 isn't like 1990. There is no rent that is too high for Manhattan these days. I've seen 300 SF easily go for $3,000/month and in buildings that are not that great. Some might consider a 150-old building quaint and charge even more for that.

However, 6-7 units means it should be RS, except for two things that might have changed that: if it went coop/condo, or if it was deregulated at any time from 1993 to 2019. We see mostly the latter and that doesn't mean it's legal. The question is, what can you do.

Your question is the one we've likely covered the most on this forum, and the one that really has no answer. DHCR made it intentionally easy for LLs to deregulate their units. There are really no forms and no one checks. By the time you find someone willing to push the issue, you might be beyond the statute of limitations - which you've apparently discovered.

As an aside, if you are in the West Village as your username suggests, many of the elected officials you might have voted for have sold-out to landlords, developers and real estate. While they preach the gospel of tenants' rights, they do everything to undermine those rights. The entire system, the agencies and political officials, are mostly all corrupt. Even for new construction, what they claim is affordable, usually is anything but real affordable.

On deregulation, the threshold started out at $2,000 for high-rent deregulation. That number increased over time and was around $2,700 in 2019. In some cases landlords performed individual apartment improvements (IAI's) between tenants that allowed then to increase the rents by 1/40th of the cost of what they spent. But in many cases they did no work or claimed to have spent more than they actually did. Again, DHCR never checks ... they just accept what the LL claims.

So a new tenant moves in, told it is not RS and never bothers to look into it. If they do, it's often beyond the 4 year statute of limitations. No big deal, they're making huge bucks on Wall Street and expect to live in the city for only a few years until they move out to the burbs.

Streeteasy? Never ever believe anything you see on Streeteasy or any of the listing services. LLs lie and so do brokers. In my building the brokers claimed there was a bicycle room and a few other amenities that never existed.

So now you have the rent history from DHCR? It might be an additional reference, but understand the registrations are just what the LLs tell DHCR, and DHCR never checks.


You say the history says it was RC in 1984. The way it works is that when the state took over the system in 1984, RC units were required to be registered once, that year, and not again. OTOH, RS units are required to be registered each and every year. So you won't see yearly registrations if it was RC. $308 seems about right for a 1984 rent.

Now, when a RC tenant died or vacated, the unit should have gone to RS subject to a tenant Fair Market Rent Challenge. There was a limited time to do that if and when the tenant received the notification. Many didn't. For more detail, see https://hcr.ny.gov/system/files/documen ... 0-2022.pdf

From what you say, even though the tenant dies in 1998, there was no report to DHCR that the unit was RS. That might have been because some LL's skip over the RS part and just claim it is deregulated. LLs are supposed to send DHCR a form when a unit is deregulated, but they usually don't.

Normally there is a 4 year look-back limit, which you know. In some cases, if the tenant can prove fraud, the courts or DHCR have allowed them to go further back. But I would say that's the exception, not the rule as fraud is not easy to prove.

As for challenging a RC registration, to be honest, I don't know how that would be done, or if it's even possible. If you made the challenge, the LL would likely come back and claim it was deregulated all along and that they made a mistake.

As for filing a complaint, well that's one way to do it, but you can also go to the courts. In either case, I would keep researching this before taking action. Don't file a complaint just because you can; do it if you have a good case. FYI, the DHCR hotline is staffed by people who may have good intentions, but really are not well-trained.

You said you knew a tenant attorney, but you didn't tell us who that is. (you can by email). Some tenant attorneys will be hot on this sort of thing; others will not be.

While we do have considerable experience with DHCR and the courts, we don't litigate this ourselves every day (and we are not lawyers). So your contact might know the latest court decisions on all this. I wish I could tell you more, but challenging illegal deregulations is very hard to do, and even we don't have the answers on this.

One thing you can do - won't help your immediate situation - is to sit on your state senator and assembly member and demand they repeal the Urstadt Law that prevents home rule for tenant laws.

[westvillagetenant]

Thank you so much for you response. This is extremely informative.

I do have two follow-up questions:

1) Is it accurate to say that the only reason why the rent history still says "RENT CONTROLLED - REG NOT REQUIRED" is because the LL registered it as RC back in 1984 and never bothered to update the records? I fee like this is a critical element. We know one thing for sure: the LL never filed their required deregulation/RC deregulation notice to the DHCR. It's unclear how serious this offence is, right?

2) I emailed you the fuel costs for the building, which, as you know, show RC activity in the building. To my knowledge, all of the apartments in the building are MARKET RATE yet the fuel cost document shows fuel costs reimbursements as recent as 2019. Can you please interpret this for me? My only caveat is there is about a small chance that the tenant on the top floor (who occupies the whole 4th floor) is RC but I only base that off of public records which show that the tenant has been there for many years. Would be virtually impossible to know this either way without looking at their lease or asking. So, in short, how do we know if the 2019 "fuel" activity is mine or someone else's?

[TenantNet]

In our view, LLs should notify DHCR when a RC tenant leaves or if the unit is deregulated. But the requirements are murky and DHCR enforces little. DHCR Fact Sheer #6 (link above) seems to add a new limitation to the right to file a Fair Market Rent Appeal (FMRA), and I'm not sure when that changed (or if that was done by legislation, rule making or just DHCR arbitrary whim).

It used to be open-ended that a subsequent tenant could file a FMRA as long as the LL had not served any of the post-RC tenants with a RR-1 form. Now, it seems they are limiting that to the same 4 year limit as everything else.

As for the fuel, readers should know the myth of RC in NYS is the false claim that the rents were frozen. They never were. Indeed, rents could go up by 7.5% per year (subject to the limit established by the Maximum Base Rent (MBR) every two years. And having the MBR go up greater than 15% was not unknown. Seniors - who make up most of RC tenancies - were often hit with these massive increases even if RS tenants' increases were much less. That changed in 2019, and it's now complicated, but better for the RC tenants.

In addition, owners could file for RC Fuel Cost Adjustments as fuel was not factored into the MBR calculations. Some LLs did this, others didn't.

But the fuel costs were eliminated after 2019. See https://hcr.ny.gov/rent-control. Also see this old Fact Sheet which is no longer current, but describes how things were: http://tenant.net/DHCR_info/factnew/orafac23.html

Also see this PAR decision: https://www.landlordvtenant.com/sites/l ... 0003RT.pdf

We did not receive your building's fuel costs that you said you emailed us. As a market tenant (real or illegal), what form would that be on? We can't explain something we haven't seen. But even if one tenant is still RC, there should be no fuel charges imposed as they legally stopped in 2019. It's also a fallacy to think that market rate tenants are subsidizing RS or RC tenants. If I correctly surmise your last sentence, that is what you are asking. Any fuel costs for market tenants would be part of the huge unregulated rents being charged.

[westvillagetenant]

Thanks for your response - sorry for the delay. I believe I read on this forum in an old post of yours that the reason why people request the fuel cost document from ORA is because it shows "RC activity".

Please check your email, I forwarded the fuel cost for the building to you again. Maybe it went to spam. I received this from ORA. As you can see on the document, there were fuel cost adjustments up until 2019 (when they were outlawed), dating back to the 80s. My question is whether that 2019 fuel cost activity suggests that there were (or is) RC unit (s) in the building? I think this could be a clue.

Let me know what you think.

[TenantNet]

It's possible I said something like that, but I don't recall. You sent us the document you found and we responded by email. From that document, it appears the last fuel application was from 2019, before the law changed. You'd have to FOIL the original application to see how many RC units were listed. You can also look at DOF property taxes and SCRIE tax abatements they are receiving, as many RC tenants are elderly and might be getting SCRIE. It's not an exact science. (and some RS get SCRIE as well).

Bottom line I don't think the information you're seeking will have any impact of resurrecting a RC status for your apartment.