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Sublet under a rent-stabilized lease

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

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Sublet under a rent-stabilized lease

Postby <Katnyc> » Wed Mar 27, 2002 12:04 pm

I have a question about the 10% charge for subletting.

I am going to London for 6 months for work. I would like to sublet my apartment to a friend while I am away. I'm leaving the majority of my stuff (furniture etc) in the apt and only removing my personal items. I contacted my landlord and he is fine with it, and is sending me an application and a sublease agreement. he has asked me to send him a letter stating my intentions and the reason I'm subletting. This all sounds fine, except he also said the rent would go up 10% for the subtenant payable to him.

My lease doesn't mention anything about this 10% charge. From what i understood was that the sub-tenaat pays me and then I pay the landlord. I thought that I had the right to charge 10% more for a furnished apartment if i chose, but if so the money would go to me not him. (I wasn't planning on charging the 10% - my subtentnat is a friend and will be taking care of my cat while i'm away.) What are my rights here?

thanks
Kathleen
<Katnyc>
 

Re: Sublet under a rent-stabilized lease

Postby <David> » Wed Mar 27, 2002 5:11 pm

Check the subletting guide (I think it's March 96) on TenantNet. If I remember -- assuming you're rent stab -- is that the landlord can charge what would amount to a renewal increase (either 2 or 4% -- don't remember the current guideline) for the period of the subtenancy. When you return, the rent would go back down to the current guideline amount. On the other hand, you , the tenant, can charge 10% more if the unit is furnished. That would not go to the landlord. Also check the RSC Code and DHCR and CTRC fact sheets. I've seen the info on TenantNet. Also check Real Property Law section 226-b.
<David>
 

Re: Sublet under a rent-stabilized lease

Postby consigliere » Wed Mar 27, 2002 11:07 pm

Your landlord is correct.
 
Pursuant to the current Rent Guidelines Board Order, Rent Guidelines Board Order No. 33, the landlord is entitled to a 10% surcharge during the period of the sublet.
 
In addition, you could also charge an additional 10% for a fully furnished apartment, for a total of 20%.
 
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Re: Sublet under a rent-stabilized lease

Postby <David> » Thu Mar 28, 2002 2:37 am

So they must have upped it. It used to be just the value of a renewal increase.
<David>
 

Re: Sublet under a rent-stabilized lease

Postby consigliere » Thu Mar 28, 2002 9:32 am

The Rent Guidelines Board (RGB) had made no allowance for a sublet surcharge until 2000, under Rent Guidelines Board Order No. 32.
 
You can check out RGB Board Orders back to 1991 at the Rent Guidelines Board website.
 
 
David wrote:
 
So they must have upped it. It used to be just the value of a renewal increase.
 
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Re: Sublet under a rent-stabilized lease

Postby Cranky Tenant » Fri Mar 29, 2002 2:29 am

I was also under the impression that in a situation like this, the subtenant would pay the money to you, and you in turn, would pay the landord. If the subtanant pays rent directy to the LL, particularly an extra 10%, what incentive is there to return the apartment to you at the end of the sublease?

Maybe consigliere can help clarify this.

I'd be carefjl about getting everything in writing or you could find yourself with one less friend, and no apartment.
I'm a cranky tenant NOT a cranky lawyer.
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Re: Sublet under a rent-stabilized lease

Postby lappert » Fri Mar 29, 2002 10:28 am

That's still true -- you get the money from the subtenant, but you pay the landlord the extra. If the landlord took the rent directly from the subtenant, then the subtenant could argue - maybe successfully - that a legal landlord/tenant relationship was established and therefore has tenancy rights (assuming the prime tenant decides to vacate). That's why landlords often return rent if it's on someone else's check.
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Re: Sublet under a rent-stabilized lease

Postby consigliere » Fri Mar 29, 2002 1:11 pm

The 10% sublet surcharge payable to the landlord under recent Rent Guidelines Board (RGB) orders doesn't really change the mechanics of an authorized sublet.
 
Prior to the 10% surcharge payable to the landlord, a tenant paying a rent of $1,000 could charge a subtenantt $1,100 for a fully furnished apartment, and remit the regular $1,000 rent to the landlord.
 
With the 10% sublet surcharge payable to the landlord, the tenant could charge the subtenant $1,200 for a fully furnished apartment, and remit $1,100 to the landlord -- the regular $1,000 rent plus the $100 sublet surcharge.
 
Even if there were no sublet surcharge payable to the landlord and no surcharge for a fully furnished apartment, the subtenant should pay $1,000 to the tenant, and the tenant should pay the regular $1,000 rent to the landlord.
 
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Re: Sublet under a rent-stabilized lease

Postby lappert » Fri Mar 29, 2002 2:57 pm

Not exactly correct. Prior to the 10% sublet surcharge, the landlord could add a temporary guideline increase -- whatever the current renewal rate was.
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Re: Sublet under a rent-stabilized lease

Postby consigliere » Sat Mar 30, 2002 1:32 am

Through 1996, the Rent Guidelines Board (RGB) granted both renewal and vacancy increases. The vacancy increase -- not the renewal increase -- applied to a sublet.
 
After the Rent Regulation Reform Act (RRRA) of 1997, with its minimum vacancy increases of 18% for a one-year lease and 20% for a two-year lease, the RGB no longer granted vacancy increases. The RGB granted a 5% surcharge for a sublet in 1997 and 1998, and a 0% sublet surcharge in 1999. In 2000 and 2001, the RGB granted a 10% surcharge for a sublet.
 
Rent Stabilization Code §2525.6(e)(1) provides:
 
Upon the consent of the owner to a sublet, the legal regulated rent payable to the owner effective upon the date of subletting may be increased by the vacancy allowance, if any, provided in the rent guidelines board order in effect at the time of the commencement date of the lease, provided the lease is a renewal lease.
 
 
Fred Lappert wrote:
 
Not exactly correct. Prior to the 10% sublet surcharge, the landlord could add a temporary guideline increase -- whatever the current renewal rate was.
 
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