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Adding preferential rent to lease renewal

Rent stabilzed lease renewals and how to apply Rent Guidelines Board (RGB) percentage increases

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Adding preferential rent to lease renewal

Postby davis362 » Tue Jul 28, 2020 10:49 am

Hi, me and my wife have lived in a rent stabilized apartment since 2017, no where in our lease did it state we were being charged preferential rent. A new management company has taken over and is now trying to add a preferential rent to our renewal lease, Im under the impression from research and talking with the housing department that this is illegal. I have been told that no chnages to the terms and conditions of vacancy lease can be changed. Is there a worksheet or info someone could point me towards to clarify this situation?
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Re: Adding preferential rent to lease renewal

Postby TenantNet » Tue Jul 28, 2020 11:14 am

I'm assuming you are rent stab, yes? Is the RS status indicated in your original lease? Do you get yearly DHCR rent stab registrations (this year due by 7/31). Have you obtained a rent history from DHCR? If not, then do so. https://hcr.ny.gov/most-common-rent-reg ... es-tenants

For your renewal leases, are they on official DHCR RTP-8 forms?

And I am assuming there was no Pref. Rent rider that was attached to your original or any renewal leases?

Not only can the LL a) not change the terms and conditions of the original lease, b) in 2019 Pref Rents were done away with. If your rent was a Pref Rent, then that becomes the legal rent for the rest of your tenancy. See https://hcr.ny.gov/system/files/documen ... T%2040.pdf
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Re: Adding preferential rent to lease renewal

Postby davis362 » Tue Jul 28, 2020 11:33 am

yes, we are RS, yes it is indicated in the original lease. we do not get yearly registrations, I have obtained the history last year and it showed the rent had not been registered expect for 2016, i recently requested a new one for last year and this year.

yes the new lease is on officail DHCR RTP - 8 forms.

last year when renewing our lease the old management company tried to add a preferential rent rider but we never signed it and they issued a new renewal lease without preferential rent included.

I guess im just curious why theyre fighting me so hard to add preferential rent to our lease and if theres anything negative that could happen to us if we allow it to be added.

thanks!
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Re: Adding preferential rent to lease renewal

Postby TenantNet » Tue Jul 28, 2020 1:51 pm

If the rent hasn't been registered, you can get a rent freeze. Do the renewals have a rent increase in accordance with the RGB percentages? That could also be an overcharge.

See https://govt.westlaw.com/nycrr/Document ... sc.Default)

or just Google "dhrc failure to register"

But I would also analyze the rent history to see if there were any unexplained or unwarranted large jumps.

You say the management company last year "issued a new lease without the PR." But did you sign and return that lease? If so, they might be trying to have a "deemed lease," which is also illegal.

The PR rent they want to add ... is that less than the legal rent you are now paying? If so, maybe that's a way to reduce the legal rent. But I can't say for certain without having seen all the documents.

You could also consult with a tenant lawyer to see how this all dovetails together ... lack of registration, renewal leases, pref rent, etc.

There are arguments to be made in some cases it might be better to do just nothing. But again, you have to look at all the issues.
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Re: Adding preferential rent to lease renewal

Postby Landlords Boy » Tue Jul 28, 2020 2:27 pm

Again? Really? TN, you may remember this is why I started posting here: one of my tenants objected to the preferential rent rider I added so DHCR issued an order for me to charge him the full legal regulated rent! (Of course both tenant and I objected to the order: offering a renewal lease that charges a tenant less than the legal regulated rent is not illegal and the LRR was waayyy higher than market rent.)

Note that if the tenant didn't sign the preferential lease rider last year - if one is indicated in the check box on the RTP-8 - paying the lower preferential rent may not be an option and the tenant may have to pay a higher rent after all: the fine print on the second page of the RTP-8 states that the tenant is not allowed to make changes to the lease renewal documents so signing the RTP-8 but not the rider specified in the RTP-8 counts as such a change.

(As for the registrations: the LL should at least have filed an updated registration after you moved in and you should have received your copy no later than the following August.)
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Re: Adding preferential rent to lease renewal

Postby davis362 » Tue Jul 28, 2020 2:42 pm

So i guess my question for you Landlords Boy would be since the PR hasnt been in any lease provided to me up until last year when they sent a rider asking me to sign it and I didnt, how is that not changing the terms and conditions of the vacancy lease? Im not trying to do any shady or be difficult, just want to be protected since I have lived here for 3 years and not had a PR, shouldnt that mean ive been paying the LRR? and if i have been paying the LRR how can that just go up by almost 1k in a year? the LL isnt trying to charge me 1k more but just make it look like thats what the LRR of the apartment is.
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Re: Adding preferential rent to lease renewal

Postby TenantNet » Tue Jul 28, 2020 4:39 pm

Davis362, go to this thread: viewtopic.php?f=3&t=13888
and download the file What Lawyers Need to Know - Part 1. You can DL from the source or from our server. The go to page 38 (at the bottom of the page. it's actually page 7 of the file).

This is a comparison of the old PR and the new PR (after the law was changed in 2019).

The old: LL could charge a PR that was less than the legal rent; LL could rescind PR during renewal unless lease provided otherwise. There were rules about Pref Rent riders that had to be attached to the initial and all renewal leases.

The new: LLs can charge PR, but they are in place for the duration of the tenancy and an RGB increases are applied to the PR. The owner can revert to the old legal rent only once the tenant vacates.

And yes, see the DHCR fact sheet on PR: https://hcr.ny.gov/system/files/documen ... T%2040.pdf

"Owners may terminate the preferential rent and charge the higher legal regulated rent (with applicable increases) only when the tenant permanently vacates the apartment."

As I said above, as a PR in essence becomes the legal rent for the remainder of your tenancy, the PR (in essence) no longer exists. Yes, technically PR still exist, but LLs no longer can jump the rent back to a much higher legal rent. So the reason for PR is gone. And in your case, as they are trying to add it later, that amounts to changing the terms and conditions of the expiring lease, and that is impermissible (even if PR were still in full force).

Landlords Boy is referring to a disagreement as to how PR could be rescinded, in full or in part. His view that a tenant who fails to sign a PR rider but signs the RTP-8 rider is therefore guilty of illegally "changing" the lease renewal document (the RTP-8) is far-fetched. LLB, do you have any cases that cite this?

The issue LLB raises has nothing to do with your situation.
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Re: Adding preferential rent to lease renewal

Postby davis362 » Wed Jul 29, 2020 3:47 pm

Thanks Tenatnet! after some arguing with the management company they have sent me a new lease without PR.

One other question, if the LL registers a LRR that is higher than im currently paying and what is stated on the lease is there anyway they could force us to pay the higher amount? im still waiting on the LRR rent for the last 2 years from the DHCR but im just curious if theres any thing they could do to somehow raise the rent beyond what the RGB increases allows?
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Re: Adding preferential rent to lease renewal

Postby TenantNet » Wed Jul 29, 2020 6:23 pm

What do you mean you're waiting for the LRR for last 2 years from DHCR?

Otherwise your question is also hard to understand. In general the LL can apply RGB increases and any MCI increases to the LRR. In terms of what you pay, if there is a Pref Rent, the RGB increases get applied to that to determine the new amount you would pay. While there is still a LRR out there, as I said above, the real rent that you pay is the Pref Rent and will last for the duration of your tenancy.
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Re: Adding preferential rent to lease renewal

Postby Landlords Boy » Mon Aug 03, 2020 12:32 pm

davis362 wrote:So i guess my question for you Landlords Boy would be since the PR hasnt been in any lease provided to me up until last year when they sent a rider asking me to sign it and I didnt, how is that not changing the terms and conditions of the vacancy lease?

It might just be that the new management company is more competent and is straightening out the paperwork: your past renewal leases may have erroneously listed the preferential rent as the legal regulated rent.

What do you mean you're waiting for the LRR for last 2 years from DHCR?

You're supposed to receive a copy of the annual rent registration from the landlord/managing company every year, not from DHCR. If the landlord registered with DHCR but didn't send you a copy, that's his bad, not DHCR's. TN, you can tell him how to check what DHCR has on file, right?
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Re: Adding preferential rent to lease renewal

Postby Landlords Boy » Mon Aug 03, 2020 12:43 pm

TenantNet wrote:Landlords Boy is referring to a disagreement as to how PR could be rescinded, in full or in part. His view that a tenant who fails to sign a PR rider but signs the RTP-8 rider is therefore guilty of illegally "changing" the lease renewal document (the RTP-8) is far-fetched. LLB, do you have any cases that cite this?
No need. From "Instructions to Tenant" on the RTP-8:

"Please read all attachments carefully. If such other lawful provisions appear, they are part of this lease renewal offer and renewal lease. If there are any lawful agreements between you and the owner, attached copies must be signed by both parties."
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