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August 12, 2009
Renovated Rent-Stab Question
I looked at an apartment currently being renovated after heavy fire damage. It's soon to come on the market. I've confirmed that it's rent-stabilized. Broker said that they still have to figure out what they can charge after the job is done, but they had an idea.
How would I confirm as a prospective tenant that the rent I am about to agree to is in accordance with the guidelines for a vacancy increase?
I'm assuming that any questions about that type of thing would lead to the landlord going with another prospective tenant.
Looks like to get the prior rent info from the state, I need to be the tenant. Thanks in advance for the help.
Comments
The potential penalties for a landlord who overcharges are substantial. A signed lease at an agreed-to rent would not legalize any overcharges. An excerpt from the first of the following links:
Rent Overcharges—For rent stabilized apartments, owners may be ordered to refund excess rent collected based upon a finding of a rent overcharge. A finding by DHCR of a willful rent overcharge by the owner may result in the assessment of treble (triple) damages payable to the tenant. DHCR is prohibited from investigating issues concerning rent overcharges and registrations for years occurring more than four years before the filing of a rent overcharge complaint.
See: http://www.housingnyc.com/html/resources/dhcr/dhcr1.html
http://www.housingnyc.com/html/resources/dhcr/dhcr26.html
http://www.housingnyc.com/html/resources/dhcr/dhcr16.html
Posted by: vinca at August 12, 2009 12:32 AM
sign the lease if it rent that is ok by you. If you later feel that it is overcharged, you can request back rent, but realize that landlord does get increases for new tenants and capital improvements to apt. So back rents may not give you much clue.
Posted by: Petebklyn at August 12, 2009 10:12 AM
" Landlords of rent stabilized buildings may seek rent increases for certain types of building-wide major capital improvements (MCI), such as the replacement of a boiler, and for new services, new equipment or improvements to an apartment in accordance with the law and regulations. Under certain circumstances, a landlord may also apply for a hardship rent increase."
Remember the landlord can apply for an increase of rent base on the improvements made to the apartment. The new rent may not be as simple as an increase by a few percentage from the old rent.
Posted by: ClintonHillGal at August 12, 2009 10:25 AM
hmm, this apt wouldn't be in park slope near the key foods, would it?
Posted by: ms_boerum at August 12, 2009 10:47 AM
Thank you all.
BTW, there's "vacancy lease calculator," but you need to know a lot more than I can know right now.
http://www.housingnyc.com/html/guidelines/vac_calc/vaccalc.html
Posted by: AGM at August 12, 2009 10:49 AM
If they have made structural changes during the renovation ie moved a wall, and if the property has been vacant for a number of months ( not quite sure on the time line there) then the apartment could be de-stabalised and go for market rate.
go with the links from vinca
Posted by: binnyG at August 12, 2009 10:51 AM
No, it's not in Park Slope; Brooklyn's pretty big.
Cool place though. The broker was a complete hindrance to me getting anything done.
Posted by: AGM at August 12, 2009 10:52 AM
yes, brooklyn is a big place-- just thought i could help on what the prior rent was if it was the place in the slope. good luck!
Posted by: ms_boerum at August 12, 2009 10:55 AM
I would be extremely surprised if it is rent stabilized after they fix it up. Under the RS law, they can add 1/40th of the cost of any improvements to the monthly rent, in addition to the vacancy increases. Once the legal rent gets over $2,000 the apartment can be destabilized if vacant. Assuming that the landlord's insurance restores it to its previous condition, the landlord can reno the bathroom and kitchen, replace the appliances and windows and pretty quickly get that legal rent over $2,000. The landlord can discount the rent but still keep the legal rent over $2,000 - that's what happened in my last rental. Most landlords destabilize their apartments if they can, it makes it a lot easier to get rid of a troublesome tenant.
Posted by: bohuma at August 13, 2009 1:46 PM
Insurance money DOES NOT count towards 1/40th rent increases (neither does sales tax for that matter.)
Posted by: IronBalls at August 13, 2009 7:06 PM
I didn't mean to imply that it did. What I was trying to convey is that the insurance would get it back to the condition it was in before the fire. To count as an improvement it would have to increase the amenity of the apartment. So fire destroys apartment, LL uses insurance to restore apartment, can get vacancy rental increase only. If, after the restoration, LL renovates the kitchen and bathroom (i.e. rips out the restoration), those renovations count towards the 1/40th. If LL makes a mistake he'll pay for it in Housing Court.
Posted by: bohuma at August 13, 2009 9:07 PM
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