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SCRIE + PREFERENTIAL RENT

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

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SCRIE + PREFERENTIAL RENT

Postby Barry Bertrand » Fri Apr 24, 2020 9:59 am

I'm SCRIE tenant, rent-stabilzed in Brooklyn. SCRIE was recently approved on current lease which expires in summer. I pay preferential rent throughout tenancy. SCRIE froze rent based on legal rent; frozen rent higher than what I pay for preferential rent. Landlord got his tax credit, but did not give me an equivalent reduction on preferential rent.

My question: Is landlord obliged to give me a rent reduction, even if my rent is preferential not high legal rent? This is a loophole in SCRIE, I gather. Up to individual landlords? Answers hard to come by. SCRIE agent at Dept of Finance said yes, landlord must give rent reduction. But this doesn't seem authoritative. (New lease will be based on pref rent). Any enlightenment, appreciated.
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Re: SCRIE + PREFERENTIAL RENT

Postby TenantNet » Fri Apr 24, 2020 11:07 am

First, look at how Preferential Rents are now treated under the 2019 law. I would look at the Lebovits article Part 1 (see link at viewtopic.php?f=3&t=1388.)

Search for "preferential" - it's on page 7 of the file (numbered as page 38 of the original document).

According to this document, the new PR rules say the PR rent holds for the duration of the tenancy and any RGB or MCI increases are based on the PR and not the lease rent.

You don't say how long you have been in that apartment, nor did you indicate if you have researched whether the PR the LL is charging you is even legal. Are all the riders in the vacancy lease and every renewal lease you have had as a RS tenant?

Next, look at this attached file:
rent-freeze-bulletin-preferential-rent-fy20.pdf


It says for current Rent freeze participants, "if your frozen rent is based upon the legal regulated (lease) rent, the next time you renew, if you continue to meet all eligibility criteria, you rent may be re-frozen at the preferential rent amount on the lease in effect June 14, 2019."

You don't say how long you have been in the SCRIE program, but I read this to mean your frozen rent is based on the PR that existed on 6/14/19.

You can also ask the SCRIE and DRIE ombudspersons (separate people) for any clarification on this. Their emails are:

SCRIE-Ombuds <SCRIE-Ombuds@finance.nyc.gov>
and
DRIE-Ombuds <DRIE-Ombuds@finance.nyc.gov>

I have found them to be responsive. Let us know if this answer - or what the Ombudspersons tell you - helps resolve this.
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Re: SCRIE + PREFERENTIAL RENT

Postby Barry Bertrand » Fri Apr 24, 2020 12:48 pm

Many thanks, Tenant Net. Will do + let you know. I've been in apartment since 2010, preferential rent is indeed legally done, mutually agreed on original lease, for duration of tenancy. All rent increases have been based on preferential. (And I understand changes in leases post-mid-2019; change will take effect for me in new lease this summer.)

But you're incorrect when you write, above, "I read this to mean your frozen rent is based on the PR that existed on 6/14/19." No, my current frozen rent is based on legal rent, not PR. My current lease dates from 2018.

That's why I asking if LL's tax credit obliged him to give me reduction on my PR for my current pre-2019 lease. Or whether he can just take the (legal rent) tax credit w/o being obliged to reduce my current PR rent. A foggy nicety of the law. Will research as you suggest.
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Re: SCRIE + PREFERENTIAL RENT

Postby TenantNet » Fri Apr 24, 2020 2:33 pm

Even if a tenant thinks a PR is legal, it really depends on the language in the original rider and subsequent riders in renewal leases. Some LLs don't bother to include the rider in renewal leases, well that can create problems if/when they want to drop the PR and make the tenant pay the full legal rent. (that was the case until last year)

In addition, the so-called "legal rent" can very well be illegal.

"No, my current frozen rent is based on legal rent, not PR. My current lease dates from 2018."

Your lease may have commenced in 2018, but it existed on 6/14/19 ... which is what the phrase "that existed on 6/14/19" means.

You should contact the SCRIE or DRIE Ombudsperson (doesn't really matter which one in my experience) and give them your case number - so they can look it up for a more authoritative reply. DOF can't determine the legal rent (that's the job of DHCR), but they can answer how SCRIE works.
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Re: SCRIE + PREFERENTIAL RENT

Postby Barry Bertrand » Fri Apr 24, 2020 5:24 pm

Thanks again. I waiting to hear from SCRIE ombudsman to whom I wrote earlier today (appreciations for correct email address, I'd written previously to incorrect address).
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Re: SCRIE + PREFERENTIAL RENT

Postby Landlords Boy » Tue Apr 28, 2020 10:14 am

Very interesting. I only have SCRIE on my few rent-controlled tenants so I've never encountered this situation.
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Re: SCRIE + PREFERENTIAL RENT

Postby TenantNet » Sat May 02, 2020 6:11 am

Barry,

Did you hear back from the SCRIE ombudsperson? It's only been a week and maybe they're overwhelmed ... I don't know. I do know that like many govt. employees they are working from home. I'd wait another week and then send a reminder. Let us know if they respond, or not.
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Re: SCRIE + PREFERENTIAL RENT

Postby Barry Bertrand » Mon May 04, 2020 11:23 am

Thanks. No reply yet, sent a follow-up today. Will keep you posted.
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Re: SCRIE + PREFERENTIAL RENT

Postby Barry Bertrand » Fri May 08, 2020 11:04 am

UPDATE: I am now corresponding with SCRIE-ombudsman, very responsive (tho slow, obv). She researching issue further.
MEANWHILE landlord suddenly wrote saying he will give me a whole rent reduction on my current PR equivalent to his tax credit on legal rent, on current lease—i.e,, what I asked for. But weirdly he wants me get a letter from SCRIE attesting that his legal rent remains as stipulated in new renewal lease coming into effect this summer. Weird request cause redundant. (Wld SCRIE even supply such a letter?) My SCRIE reduction (based on PR) is only for lifetime of my tenancy. If/when I vacate at some point, the legal rent comes back into effect, no? Is there some hidden strategy in his request or is just “belt and suspenders” sort of request, to reaffirm his legal rent? Appreciations yr thoughts, as ever
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Re: SCRIE + PREFERENTIAL RENT

Postby TenantNet » Fri May 08, 2020 8:34 pm

Glad to hear they are responsive.

I would put off the LL for now. SCRIE will issue a determination as for the legal rent and for the SCRIE reduced rent. The difference would be credited to the LL in the form of a rent abatement. That is how it works.

I don't think the SCRIE office would issues such a letter, but that's just my opinion. I can't speculate what the LL is up to.

If you have questions on the SCRIE or PR, have you asked them?
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Re: SCRIE + PREFERENTIAL RENT

Postby Barry Bertrand » Sat May 09, 2020 11:46 am

Thanks, as ever. Yup, indeed, I know how SCRIE tax credit works for LL's, though again I was inquiring about a gray area, which the SCRIE ombudsman is looking into. I also doubt SCRIE will issue such a letter re legal rent (and why couldn't the LL make that inquiry himself?). Whatever. I might say to LL I will ask SCRIE for the letter--and then communicate their declining to provide such. Yeah, not clear what he up to. Thanks & stay safe. I'll post what SCRIE ombudsman comes up with.
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Re: SCRIE + PREFERENTIAL RENT

Postby Barry Bertrand » Sat May 23, 2020 6:35 pm

I heard from SCRIE Ombudsperson. Quite amazingly, because my PR was always for life of tenancy, she was able to get SCRIE to reformulate my current rent freeze (on pre-June ’19 renewal lease) to base it on my existing PR-- not on LR as SCRIE first ruled. And new lease commencing in summer will be therefore lower. Pretty wow. She didn’t give a ruling on my original Q, which was whether LL’s tax credit for LR-based rent freeze should be passed along as a reduction on my existing PR. Cause issue in my case became moot,obviously. Thanks for passing along her email again. Safe & good Mem Day.
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Re: SCRIE + PREFERENTIAL RENT

Postby TenantNet » Sat May 23, 2020 9:03 pm

Glad to hear things are working out.
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