TenantNet Forum

Where tenants can seek help and help others



Preferential Rent-2 yr lease with 5% increase: I am on SCRIE

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

Moderator: TenantNet

Preferential Rent-2 yr lease with 5% increase: I am on SCRIE

Postby eliuri » Tue Oct 01, 2019 11:20 pm

Hello:

We're being offered a renewal lease--which is to kick in January 1 2020 on which there is preferential rent. The actual renewal lease specifies two separate rents--legal and preferential- and respective rent increases for one/two years.

For the legal rent, the increase rates are: 1.5%/ 2.5% for one or two year leases respectively. Last time around SCRIE picked up the increase in legal rent. which was considerably lower than the actual increase in preferential rent.


The current lease, in terms of preferential rent has 3.7% / 5% increases for one/two years respectively. I generally go with a 2 year lease. So this is of concern to me.

I had thought that under the new rent law of 2019, preferential rent increases are now subject to Rent Guideline Board rates (1.5%, 2.5%). So that since I'm under SCRIE there should be a rent freeze in terms of the actual rent increase for me. But it seems that in this Renewal Lease, they're using similar steeper rent hike rates on the preferential rent -exactly as was done 2 years ago.

1) Am I misunderstanding something here? And that somehow because of SCRIE , this is correct?

2) Might this just be due that this Renewal Lease was drafted (probably via computer) before the new law went into effect? Although I had received the packet only last week, it is pre-dated to late August. And perhaps perhaps the calculations were still using the now outdated standards for preferential rents? If so, this might potentially be corrected by having it pointed out--diplomatically- to management, if I could even get through to them. Though who knows..

3) Might it be that they're ignorant of or deliberately flaunting the law? I have not the energy no the resources to mount a legal battle on this...
eliuri
 
Posts: 11
Joined: Thu Oct 12, 2017 6:23 pm

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby TenantNet » Thu Oct 03, 2019 10:38 pm

I drafted a reply to this question, but haven't finished it, so wait on that.

But in the meantime, I saw this:
https://www.citylandnyc.org/de-blasio-a ... -programs/

De Blasio Administration Expands Benefits of Rent Freeze Programs

The Housing Stability and Tenant Protection Act makes it possible to freeze rents at preferential rates for qualifying New Yorkers. On September 18, 2019, the de Blasio administration released guidance regarding renter rights under the Housing Stability and Tenant Protection Act. This guidance will allow New Yorkers who pay preferential rents in rent-stabilized apartments to benefit from the City’s Rent Freeze Programs.

Earlier this year, the State Legislature passed the Housing Act, which locks in preferential rents for the duration of a tenancy as opposed to the length of a tenant’s lease. Prior to the Housing Act, a landlord could choose to raise a preferential rent to the legal rent at the end of the lease, even if the lease was being renewed. Eligible New Yorkers under Rent Freeze Programs could freeze their rent at the legal rent, but not the preferential rent. Due to the passage of the Housing Act, rents can be frozen at the preferential rates.

The Senior Citizen Rent Increase Exemption (SCRIE) and the Disabled Rent Increase Exemption (DRIE) are collectively known as NYC Rent Freeze Programs. Under the Program, the City can freeze eligible tenants’ rents at the preferable level as opposed to the legal rent. New Yorkers who live in rent-stabilized homes with a preferential rent no longer need to have their rent reach the legal rent level before incurring the benefit of a rent freeze. This guidance has been included in the applications for SCRIE and DRIE.

The program is administered by the Department of Finance. The program’s goal is to help eligible senior citizens (over 62 years old) and tenants with qualifying disabilities (over 18 years old) remain in affordable housing. A property tax credit covers the difference between the actual rent amount and the frozen rent amount. As of last week, there were 74,666 households enrolled in the programs. These programs are only available in rent-regulated apartments unless otherwise noted.

The City’s Public Engagement Unit and Department of Finance will be canvassing targeted neighborhoods and distributing information at public meetings to ensure the program reaches all New Yorkers who can benefit from it. New Yorkers can check their eligibility by going to http://www.nyc.gov/rentfreeze.

Who is Eligible?

To qualify for the Senior Citizen Rent Increase Exemption (SCRIE) program, you must:

* Be at least 62 years old;
* Be the Head of Household as the primary tenant named on the lease/rent order or have been granted succession rights in a rent-controlled, rent-stabilized or a rent-regulated hotel apartment;
* Have a combined household income for all members of the household that is $50,000 or less, And;
* Spend more than one-third of your monthly household income on rent.


To qualify for the Disability Rent Increase Exemption (DRIE) program, you must:

* Be at least 18 years old;
* Be named on the lease or the rent order or have been granted succession rights in a rent-controlled, rent-stabilized, or rent-regulated hotel apartment or an apartment located in a building where the mortgage was federally insured under Section 213 of the National Housing Act, owned by a Mitchell-Lama development, Limited Dividend housing company, Redevelopment Company or Housing Development Fund Corporation (HDFC) incorporated under New York State’s Private Housing Finance Law;
* Have a combined household income that is $50,000 or less;
* Spend more than one-third of your monthly household income on rent, and;
* You must have been awarded one of the following:
* Federal Supplemental Security Income (SSI);
* Federal Social Security Disability Insurance (SSDI);
* S. Department of Veterans Affairs disability pension or disability compensation;
* Disability-related Medicaid if the applicant has received either SSI or SSDI in the past, or;
* The United States Postal Service (USPS) disability pension or disability compensation.[/list]

Mayor de Blasio stated, “The City’s rent freeze programs have given tens of thousands of New Yorkers peace of mind and housing stability. Now that we can freeze preferential rents, the program will bring even more relief.”

Department of Finance Commissioner Jacques Jiha said, “These programs are an important part of the City’s work to combat housing costs that are out pacing incomes. We want every eligible New Yorkers to sign up and take advantage of these programs.”

By: Laine Vitkevich (Laine is a CityLaw Intern and New York Law School Student, Class of 2020)
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 9216
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby BubbaJoe123 » Fri Oct 04, 2019 8:56 am

eliuri wrote:I had thought that under the new rent law of 2019, preferential rent increases are now subject to Rent Guideline Board rates (1.5%, 2.5%).


You're correct, they are.

eliuri wrote:1) Am I misunderstanding something here? And that somehow because of SCRIE , this is correct?




eliuri wrote:2) Might this just be due that this Renewal Lease was drafted (probably via computer) before the new law went into effect? Although I had received the packet only last week, it is pre-dated to late August. And perhaps perhaps the calculations were still using the now outdated standards for preferential rents? If so, this might potentially be corrected by having it pointed out--diplomatically- to management, if I could even get through to them. Though who knows..

eliuri wrote:3) Might it be that they're ignorant of or deliberately flaunting the law? I have not the energy no the resources to mount a legal battle on this...


Return the unsigned lease, Certified Mail, with a polite letter stating that, per the Housing Stability and Tenant Protection Act of 2019, increases to preferential rents are limited to the same percentages as increases to the legal rent, and asking for a corrected lease offer to be sent. The letter should clearly state that you do intend to renew your lease.

If the landlord just screwed up, and used an old form, they'll correct it, and you'll have your lease. If the landlord tried to pull a fast one by putting in the higher increases, and they know you've caught them, then they can (a) say "hey, worth a try," and send you the correct lease, or (b) dig in their heels.

While it's certainly possible that they'll dig in their heels, cross that bridge when you come to it. Send the lease back saying you intend to renew once you have the correct lease, and then go from there.
BubbaJoe123
 
Posts: 215
Joined: Mon Jun 30, 2014 5:31 pm

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby eliuri » Sat Oct 05, 2019 4:48 pm

Thank you both for very useful information. Especially about SCRIE and total rent freeze

Yes, LL used older forms. BUT my hypothesis (1) in original post turns out to be likely correct:

1) Am I misunderstanding something here? And that somehow because of SCRIE , this is correct?



Seems that's what had happened here, but it's complicated calculation which the current version of actual lease--and even the newer one issued in September-- isn't clear enough about. In terms of how they itemize the rent increases on the form

I'll try to explain--using fictional and very simplified hypothetical figures-- as this may be useful to others:

Say my current Preferential Rent were: $1,000 but SCRIE had been kicking in $200 making my actual rent $800

If I were to calculate a 2.5% increase on the Preferential Rent, there'd be an increase of $25/month for the renewal lease. However, if I were to calculate this $25 increase on top of the $800 (post-SCRIE) I actually pay now, it would look like a 3% increase..People are generally aware of what they're actually paying more than the preferential vs preferential minus SCRIE. So when I re-ran the figures based on a 2.5% increase on the actual Preferential Rent listed on current lease, it does indeed seem the LL indeed gave the correct amount on the lease renewal! I know its hard to believe, but this time it seems the LL got that part right!

It was actually the SCRIE office that had miscalculated this when I asked them if they could review the specifics of what's now being offered...But it's easy to see how this might have happened
===========================

The Rider to the lease is from the earlier Feb 2018 revision, and not the Sept 2019 revision date-- post the new law of June 2019.

So it is lacking that crucial paragraph 17 on that new Rider:


"17. PREFERENTIAL RENT

...... The rent increase to be collected at a lease renewal on the preferential rent must be set by applying the applicable guideline increase to the preferential
rent. The legal rent cannot be collected until a vacancy occurs and can be offered to the next new vacancy lease tenant, provided that both the legal rent and the preferential rent are listed in the initial lease offering the preferential rent and every subsequent lease offering the preferential rent until the vacancy. Exceptions to these requirements
may apply to preferential rents established by regulatory agreements
.



It seems the LL did apply the RGB percentage increases correctly to the preferential rent as required. But I do not have that statement in Paragraph 17 quoted above that the preferential rent is for duration of Tenancy and not the duration of Lease only. Simply because that paragraph wasn't there when this packet had been put together back in August

However, there is a Rider attached to all this which does address the two issues of the new law regarding preferential rent

1) That increases in PR be based on the RGB rates
2) That the PR is valid for duration of tenancy rather than duration of Lease.

Considering that the package is dated Aug 28, I can understand why they might still using that older form, yet acknowledging the new law. I'm going through what others here are saying bout the not yet updated official rider..Seems it was released very recently. So my inclination now is to overlook this detail

My concern is that while this entire package is dated August 28 , we received it on September 20. So we don't really have the 60 days to squabble over it...

My inclination now is to submit it as is ASAP because I need to re-apply for SCRIE and they wont process SCRIE renewals until the renewal lease is signed by both parties. And also that 60 day period may run out on me if I delay

Thank you again for information. My apologies if the above seems a bit convoluted.
eliuri
 
Posts: 11
Joined: Thu Oct 12, 2017 6:23 pm

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby eliuri » Tue Oct 15, 2019 2:41 pm

Follow-up question: Re: Item 9 on Renewal Lease

Item 9 on the RTP-8 Renewal Lease form reads:



9. SCRIE and DRIE. Owner and Tenant acknowledge that, as of the date of this renewal, Tenant is entitled to pay a reduced monthly rent in
the amount of $ _______________ under the New York City SCRIE program or the New York City DRIE program. The reduced rent may
be adjusted by orders of such program.



Since I am as of now certain that I remain eligible for SCRIE, should I enter the actual amount of rent that I'm paying as of now ? My understanding of the new law is that I will be continuing to pay the same as I'm now paying once renewal lease goes into effect and SCRIE is renewed. That is what will make it a true rent freeze, unlike the "rent freeze" on the legal rent as under the old law

According to SCRIE Dept of Finance Office, they list my frozen rent in terms of the frozen legal rent. which is a few hundred dollars higher. Seems that the listing they have now is in context of the older law. Since I have not yet renewed by SCRIE.. I cannot renew my SCRIE until the lease is signed by LL. So it seems a bit circular.

So how would you advise me to answer Item 9 above on the renewal lease?
eliuri
 
Posts: 11
Joined: Thu Oct 12, 2017 6:23 pm

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby TenantNet » Tue Oct 15, 2019 2:49 pm

As I said above, I had drafted something ... then we had some technical issues. Here's what I drafted back on 10/3/19:

First, as for the new laws, go to this thread: viewtopic.php?f=3&t=13888
and download the PDF file with the link on the post. Written by Civil Court Judge Lebovits, it's a quick rundown of the new law, pretty much most of what you will need.

Second, understand that any time there is new legislation, there will be varying interpretations, and those are still being debated and litigated, especially as to effective dates.

Owners may charge only the preferential rent, subject to applicable
RGB rates and any other applicable rent increase
; when the tenant
vacates, the preferential rent can be rescinded if warranty of habitabil-
ity issues did not cause the vacancy.

• Subject to limited exception for buildings subject to a regulatory
agreement (i.e., federal housing projects). Effective 6/14/19, but it
applies to any tenant subject to a lease on or after the effective date or
that is entitled to receive a renewal or vacancy lease on or after that
date.
• Effective 6/14/19.


That tells me that any increase in the preferential rent is limited to the RGB percentages. I would call DHCR and the RGB to get their opinion (and let is know if it's any different).

I would also check if:

a) if the legal rent (when you took occupancy) is legal. Do you have your rent history? Have you analyzed it?

b) is previous increases in preferential rent were legal.

As for SCRIE, that freezes your payable rent. The differences between what you pay and what the LL gets is in the form of a tax abatement. You never see that, but you can see it on the Dept. of Finance web page for your building. It might take some digging, but it's there.

You should have an order from SCRIE that lists your payable rent. Is the SCRIE payable rent higher than the preferential rent?

https://volsprobono.org/sites/default/f ... 202015.pdf

https://volsprobono.org/sites/default/f ... -scrie.pdf
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 9216
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby TenantNet » Tue Oct 15, 2019 2:56 pm

Since I am as of now certain that I remain eligible for SCRIE, should I enter the actual amount of rent that I'm paying as of now ? My understanding of the new law is that I will be continuing to pay the same as I'm now paying once renewal lease goes into effect and SCRIE is renewed. That is what will make it a true rent freeze, unlike the "rent freeze" on the legal rent as under the old law

According to SCRIE Dept of Finance Office, they list my frozen rent in terms of the frozen legal rent. which is a few hundred dollars higher. Seems that the listing they have now is in context of the older law. Since I have not yet renewed by SCRIE.. I cannot renew my SCRIE until the lease is signed by LL. So it seems a bit circular.

So how would you advise me to answer Item 9 above on the renewal lease?


I would enter the amount listed on your most recent SCRIE order. But is the frozen SCRIE rent the same as the preferential rent? I would pay the lower of the two, if there is any difference.

What did the SCRIE office tell you?
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 9216
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby eliuri » Tue Oct 15, 2019 3:42 pm

"I would enter the amount listed on your most recent SCRIE order. But is the frozen SCRIE rent the same as the preferential rent? I would pay the lower of the two, if there is any difference."



The SCRIE order dates from early 2019. It is built upon the legal rent in the context of the old law. So it is still a few hundred dollars more than I'm actually paying. The SCRIE rent freezes were then based off the legal rents. Preferential rents were not frozen back then and continued to increase. If i were to enter that figure on the SCRIE decree I received, I would--ironically- be affirming that under SCRIE I would be paying an even higher rent than without SCRIE because it was frozen on that much higher legal rent

Yes. I do have copies of rent history. There was a very steep increase in legal rent upon my signing of the original lease. We were not given any itemization of the IAI's as now found in riders..In fact, broker told us we were not even rent stabilized because legal rent was above the maximum then. However, I later learned from DHCR that we were in fact stabilized all along. Besides, the legal/preferential thing is only in rent stabilized situations.

The SCRIE Office could only tell me what's in their present listing in terms of what they have listed as of now. And that's based of the legal rent--not the preferential. They could not (or would not) tell me what it will be after approved. They told me to simply leave that item blank I am hesitant to do that however, because by entering the amount I actually anticipate paying--which is exactly what I'm paying now--the lease then affirms compliance with the new law. The actual forms are pre-June 2019 including the rider. The rtp-8 is the 2014 edition) Though as I said earlier , there's some sort of rider rider to the rider affirming the new law. I guess they simply may not have had copies of the new forms when the packet was put together..

You should have an order from SCRIE that lists your payable rent. Is the SCRIE payable rent higher than the preferential rent?


That's not how the SCRIE decisions are worded. They list "Current Rent" and thats after SCRIE reduction of legal rent. As if the "preferential rent" were blinded in those decrees. I searched under Docket Number for my borough, and same wording. And yes, THAT rent is in fact higher than the preferential rent.

Vaguely recall reading that when preferential rent is for duration of tenancy, SCRIE freezes at preferential rent. When preferential rent is for duration of lease SCRIE freezes at legal rent. in our case, the preferential rent was for duration of lease only. This is what's supposed to change under the new law of June 2019. That is mentioned in that rider to rider I referred to earlier...

According to the new law, since the preferential rent will now be for duration of tenancy, SCRIE will freeze the PR. So it will be a true rent freeze. In the past, increases in the preferential rent were higher than what SCRIE covered. So it was not really a true rent freeze. So it is my thinking as of now, that by correctly filling out Item 9 above, this is now being affirmed by both parties to the renewal lease.

In terms of actual rent payable monthly, I do have my monthly rent bill stubs which itemize all three: Apt. Rent (Legal Rent)-- minus Preferential Credit-- - minus SCRIE===>Rent I actually have been paying
Last edited by eliuri on Tue Oct 15, 2019 4:27 pm, edited 1 time in total.
eliuri
 
Posts: 11
Joined: Thu Oct 12, 2017 6:23 pm

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby TenantNet » Tue Oct 15, 2019 4:09 pm

Have you contacted the SCRIE Ombudsperson? I had some luck with them. SCRIE-Ombuds@finance.nyc.gov
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 9216
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby eliuri » Tue Oct 15, 2019 4:29 pm

I guess i can try that..Or even call 311 and get to Finance Office again. They might say differently in terms of how that item is now to be filled out.

Another option is to enter the current rent there and beneath it write:

"as anticipated per new law of June 2019"
eliuri
 
Posts: 11
Joined: Thu Oct 12, 2017 6:23 pm

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby TenantNet » Tue Oct 15, 2019 4:39 pm

311 knows nothing. They are supposed to connect you with the SCRIE office if you request, so make sure that you speak with someone who works at SCRIE, not 311. In my experience, the Ombudsperson can help sort things out while a phone call center person doesn't have that flexibility.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 9216
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Preferential Rent-2 yr lease with 5% increase: I am on S

Postby eliuri » Tue Oct 15, 2019 5:22 pm

The call was in fact forwarded to Dept of Finance at my request. They could only tell me what's in their current listing. Hence the advice to leave Item 9 blank.

Fact however is, that they do have copy of my current lease on file. That was needed to complete the SCRIE application in the first place. So if someone were willing to look at it carefully might see what it i'm driving at.

The error I had made as per my original post here was a result--not of my own calculation- but of a conversation with someone from that very office who thought that there was some overcharge going on in the new lease. But it turns out that was a misunderstandings.

When there are 3 rents floated about: "legal" rent " preferential" rent and "SCRIE-frozen" rent --this opens door to much confusion
eliuri
 
Posts: 11
Joined: Thu Oct 12, 2017 6:23 pm


Return to NYC Rent Regulated Apartments

Who is online

Users browsing this forum: No registered users and 10 guests