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January 7, 2009

Need Rent Stabilization Expert

Hi All,
It seems like the more people I talk to the more answers I get, so I thought I'd risk some more...
I am buying a seven family bld that has been vacant/owner occupied for 8 years. In talking to DHRC they said that since it had not had tenants in it for over 4 years it has fallen out from under rent stabilization laws and that I should register it with them at market rate rents (ie. 2k). They even said, "once you register at 2K you can charge whatever you want." What I think they meant was "you can charge whatever you can get 2K and above" - right? Most of the apts., while close to 2K, will rent for under it, one above. So one question I have is, what happens if I list them with DHRC at 2k and charge say $1800? Does that put me back in rent stabilization land? Am If there is anyone who has dealt with this before or has recommendation on how to navigate these laws etc. please let me know. I would buy you coffee, beer, scones or other treats to learn from you! :)

Posted by amybnyc at 2:41 PM | Comments (10)

Comments


I have not directly dealt with a situation like yours, but it sounds right based on my knowledge of the rent stabilization laws. Of course you should talk to an experienced landlord attorney for the final word.

If you register the rents at $2000 and therefore, destabilize the units, but then rent for under $2000/mo, I believe your new tenants would have four years to challenge their non-stabilized status. After four years, you're safe.

On the other hand, you probably would be just as well off giving your tenants stabilized leases, because the increase on $1800/mo is substantial, yet have a "stabilized" lease might help attract tenants.

The next round of tenants would legally destabize your apartments anyways because of the vacancy allowance taking your legal rents over $2000/mo.

I'm curious, what did you pay for the building?

Posted by: IronBalls at January 7, 2009 3:25 PM

What you are talking about is called "First Rent" by DHCR. It's what you charge a tenant after an apartment has been vacant or owner occupied for more than four years. You need to go to DHCR in Queens and get a copy of "DHCR Opinion Letter November 15, 1996" that describes the correct way to collect a vacancy increase that destabilizes it.

Posted by: Shahn Andersen at January 7, 2009 3:34 PM


But then again, the Democrats just took over the State Senate, and they might pander to their constituents and make the rent laws even more restrictive.

Register the entire building at $2000/mo per apartment and destabilize the whole damn thing.

If you get challenged within four years, the worst that can happen is that you have to give your tenants stabilized leases.

Most likely you won't get challenged anyways because the rents are market rate and the tenants don't have much to gain by challenging. It's not as if they're going to get lower rents.

I hope you got a great deal on the building, because you're entering the real estate world at a terrible time.

But good luck!

Posted by: IronBalls at January 7, 2009 3:35 PM

IB is not correct, both concerning the length of the challenge period, and concerning ALL the factors that go into determining whether an apartment can be removed from the rolls of rent-regulated apartments, even once the $2000 mark is exceeded. However, I have very little sympathy for a new owner or about-to-be-owner who doesn't know or understand the regulations themselves, isn't familiar enough with NYC housing to know the proper order for the initials "DHCR" and also doesn't appear to be working with an attorney familiar with the regulations. You can find addresses online for DHCR and HPD offices. Try visiting one of them.

Posted by: vinca at January 7, 2009 5:46 PM


Vinca, I believe I am correct.

My first piece of advice was that the owner consult an attorney.

But I've been in NYC real estate for years and have been in housing court with rent stabilized tenants personally.

I probably am as familiar with the stabilization laws as anybody who frequents this website.

You sound like an angry person.

Let me guess, are you a bitter rent stabber?


Posted by: IronBalls at January 7, 2009 6:58 PM

IB, you are entitled to your beliefs, and even to your pop psychology,
all of which leave you with not correct again.

Posted by: vinca at January 7, 2009 7:20 PM

Vinca,

How am I wrong?

You haven't helped the poster at all.

You're a perfect example of what's know on internet blogs as a "troll."


Posted by: IronBalls at January 7, 2009 7:47 PM

Thank you IB and Shahn for your very helpful comments! IB, I would be happy to email you directly and let you know how much I paid etc., but would rather not on here. Like I said at the beginning of my post, I've gotten different answers from everyone -including the 2 times I've been at DHCR (excuse my earlier dyslexia), HPD, the two seperate lawyers I've consulted, the four realtors, and countless others - and you've added to it!:) All that aside, I greatly appreciate your advice and would love to talk to either of you more if possible.
Best,

Posted by: amybnyc at January 7, 2009 8:09 PM


amybnyc,

Once you get a copy of the DHCR opinion letter Shahn mentions, could you please scan and post it on this website. I'd be very interested in reading it as well. I looked for it on the DHCR website, but unfortunately, although it's mentioned in another opinion letter, it's not available itself on the DHCR website.


Posted by: IronBalls at January 7, 2009 9:19 PM

.....Someone called for me?

Posted by: troll at January 8, 2009 10:52 AM

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