You have what is called a "preferential rent". This is a provision in the rent stabilization law that allows a landlord to "reserve" the legal rent, even though the market no longer justifies such a high rent. In essence, the landlord has said, "I can't get the maximum legal rent now, but I might be able to in the future. So with the preferential rent clause in my lease, I can lower the rent now to get a tenant, but I reserve the right to raise the rent back to the legal maximum rent in the future". However, unless the landlord follows the procedure dictated by the rent stabilization guideline, he will forfeit the maximum legal rent and be stuck with the preferential rent you were give... Here's the relevant section of the law:
NYC Rent Guidelines Board
New York State Division of Housing and Community Renewal, Office of Rent Administration
Fact Sheet #40 Preferential Rents
A preferential rent is a rent which an owner agrees to charge that is lower than the legal regulated rent that the owner could lawfully collect.
Owners can decide to terminate the preferential rent and charge the higher legal regulated rent upon renewal of the lease or when that tenant permanently vacates the apartment (see Example #1). However, the rent laws impose a condition on an owner's right to charge the claimed legal regulated rent. The legal regulated rent must have been written in the vacancy or renewal lease in which the preferential rent was first charged. Registration with DHCR of the legal regulated rent by itself will not establish the legal regulated rent for future usage (see Example #2).
The legal regulated rent need not be written in any subsequent renewal lease; however, failure to do so within a four (4) year period will effectively result in the preferential rent being established as the legal regulated rent.
In addition, the terms of the lease itself, may affect the owner's right to terminate a preferential rent. If the lease agreement contains a clause that the preferential rent shall continue for the term of the tenancy, not just the specific lease term, then the preferential rent cannot be terminated for that tenancy (see Example #3). The preferential rent continues to be the basis for future rent increases. However, if the lease was silent and did not contain a clause that clarified whether the preferential rent was for the "term of the lease" or "the entire term of the tenancy", then the owner may terminate the preferential rent at the time of the lease renewal (See Example 4).
Although a complaint of Rent Overcharge is limited to an examination of the apartment's rent history only for the four (4) years preceding the filing of a complaint, DHCR may look beyond the four (4) year period in proceedings involving the original terms and conditions of a preferential rent offer. A rent that is not challenged by a tenant within four (4) years and modified by a DHCR written order becomes the legal regulated rent.
For a wonderful no fee rent stabilized apartment, click this link.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
