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HDFC Rent Increase illegal?!

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HDFC Rent Increase illegal?!

Postby SinglemomintheBronx » Mon Dec 24, 2007 11:27 pm

:?: Ok I live in an HDFC. I've had the same rent for about 7 yrs. No increase. This bldg owes millions to the city and can be bought out. I'm a renter not a shareholder. My lease was never renewed after the first year. We recently had a meeting and because the bldg is in trouble, the shareholder's maintenace was raised to almost $400.00. My lease states that my apt is rent stablilzed eventhough i've read on here that HDFC's can raise the rent to whatever? Is this true? I don't understand why the lease states that my apt is rent stablized? The rent for the renters haven't been calculated yet because they claim all the renters pay a diff amount and they are not sure what number to come up with? My question is how much can they raise it? What is the max amount?
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Postby TenantNet » Tue Dec 25, 2007 5:00 am

This comes from our expert at the HDFC Council:

HDFC cooperatives are NOT subject to rent regulations such as rent control or rent stabilization. Even though you may have a rent stabilized lease the courts and the Appeal Courts have ruled clearly that HDFC cooperatives are not subject to such laws. (546W156HDFC v Smalls).

The need to raise rents and maintenance is even more important to buildings in tax arrears but in general HDFC cooperatives are increasing rents and maintenances as the result of the five fold increase in fuel charges these last two-three years and consequent increases on everything else from Propety Taxes to Water and Sewer Charges to the cost of electricity etc., etc.

But consider then with average rents in New York County running approximately $1500 for a studio the increases you complain about are minimal and the units are still highly affordable to low income working families for whom it were intended.

As far as how much to raise the Board can raise a the same percentage (whatever percentage they decide is needed for all renters or they can increase a different amount to each renter if they so desire based on whatever criteria their best business judgment tells them as long as is logic, reasonable and not discriminatory.

Maintenance must be increased equally for all shareholders usually based on a per room rate or on a per square foot rate thus all shareholder pay the same amounts for equal spaces.

We recommend that HDFC cooperatives increase not less than 2% annually but many go on for years without increases and then find themselves in the predicament your building is in for not running the business of the cooperative as it should be run. So now the chickens are coming home to roost so to speak and all must bite the bullet and pay the increase or lose the building.
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Thank you!

Postby SinglemomintheBronx » Tue Dec 25, 2007 1:36 pm

Thank goodness for this site! TenantNet you rock! So much needed info. so many questions answered. I can't thank you enough. It's true, my rent is soo much lower than what it should be, so i am lucky. I just had a shareholder tell me in the elevator that we (renters) are rent stabilized and the board can't go up too much w/ the rent. Some plp are paying 200! omg. Ok he's totally wrong. This bldg owes millions and if they don't do something fast, we will all be out. Also there have been a lot of misplaced funds accusations from renters and shareholders alike about the board president. So i'll see where this goes.
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Postby reysmont » Tue Dec 25, 2007 5:17 pm

Yes Tenant.net rocks!

It is obvious to me that your HDFC cooperative is in trouble in more ways that just financial. The fact that you refer to "the President" rather than the Board tells me lots. This is one of the few dysfunctional HDFCs in danger of being lost due to the lack of knowledge, leadership and guidance from a viable Board of Directors and caring shareholders who know they are Tenant-Owners.

The bad news is that no one from the outside can help you - an HDFC cooperative is private property and only the owners (the shareholders) can resolve the exisiting problems and be prepared to assume the responsiblity of ownership rather than the mentality of tenants looking for cheap rent which is the reason no increases after so many years.

The HDFC Council might be of some help as well as UHAB and a number of other local organizations but all they can do is provide your shareholders with some guidance, as owners they must bite the bullet and do what is needed or lose the building.

The shareholders better wake up and smell the coffee and get going and do what is needed to get a viable Board of Directors in place and to get the necessary training to move ahead and save the property.

For further information on HDFCs go to and register at http://forums.delphiforums.com/HDFCCentral/start
reysmont
 

Postby SinglemomintheBronx » Tue Dec 25, 2007 5:45 pm

oh reysmont, you have no idea! Last year one of the shareholders took it upon himself to go to HPD to find payment records for the bldg. Come to find out the President has not paid HPD for about 10 yrs! No records of payment. Which is why we owe several millions.
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Postby reysmont » Tue Dec 25, 2007 7:49 pm

Unfortunately I do have not only an idea but have seen this several times. Have seen several people jailed under similar circumstances in the Bronx, Brooklyn and Manhattan.

The tenants have two options, do something or just lose the building.

The tenenats also have the power to ask the City to Third Party Transfer the building to a not-for-profit that has agreed to reconvert the building to an HDFC cooperative in the future or into a Mutual Housing Association contolled by the tenants under the supervision of the not-for profit.

The local Council Member may be of some help but the future is certainly dark and getting darker.
reysmont
 

Postby SinglemomintheBronx » Tue Dec 25, 2007 8:52 pm

oh no, i'm scared now. Not spending my income tax refund. Might need it to move outta here. Couple of yrs ago, the president had UHAB come to try for us to keep the bldg. For some reason or other the company that had taken over is no longer w/ us. Now we have had another company put papers in our mailboxes stating that they are now the company for us to mail our payments to. They only have a p.o. box and no phone number. So couple of weeks ago we finally have a bldg meeting and the new company is being run by a member of the previous company. This bldg is nuts. We are being warned that the city can just come and take over the bldg and kick everyone out. I've seen those papers from HPD, no payments since the 90's. I missed the meeting when the president was confronted about that, but i'm told she denied and plp had not been paying their rent.
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Postby reysmont » Wed Dec 26, 2007 6:03 pm

No the City is not going to come in and kick everyone out.

What will happen is that the City might foreclose and Thrid-party transfer the the building to a not for profit, and UHAB has received many buildings from the City that way, or another nor-for profit or even one the the selected for-profit developers in HPD list.

The tenants would remain as tenants but those shareholder-owners will lose their equity represented by the 250 shares of the HDFC corporation which owns the building.

the equity of Shares in HDFCs in the Bronx range from $25,000 to $200,000 depending on location and condition of the building and apartments. I must assume that no one has ever explained the concept and value of equity to the shareholders or that they even care to know what they have and what they will lose unless they do something radical and save their equity and building.

The worst end result can be that all become renters in someone else's property paying the rents established (much higher rents) to support the building and produce a return (profit) to the new owners.
reysmont
 

Postby SinglemomintheBronx » Thu Dec 27, 2007 6:43 am

Actually the last meeting, the shareholders were warned about what they can lose. It's amazing how less than half of the bldg showed up. It was stressed that them losing their apts would not be a good move for them at all. They (shareholders) were mostly angry at the renters because our rents have not gone up yet, they feel the renters should be paying more at this point. Which in reality EVERYONE should be paying more. A lot of angry plp. Come on it's been more than 10 yrs since a rent increase for everyone!
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Postby reysmont » Thu Dec 27, 2007 6:26 pm

Well then there is no hope for that building, just sit tight and see what happens. either the City will foreclose and Third Party Transfer it or they might continue this way for years to come or until the shareholders wake to reality. And Third Party Transfer might not be the worse thing that happens to that building -the worse is if it linger like it is for a long time.

But that is private property and the owners will have to live with their decisions or lack of decision, which in itself is a decision.

Good luck to you.

http://forums.delphiforums.com/HDFCCent ... ?msg=861.1
reysmont
 


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