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I am living in a illegal one bedroom basement for the past 18 years. My rent started at 450.00 of which that time it keep increasing as the years goes by. no problem. Bare in mine I'm a single mom and I do all the repairs to the place with no reimbursement. Meanwhile I'm working for minimum wages. To my surprise the landlord raise the rent by 650.00 making my rent 1,300 per month. My question to someone or anyone how can I handle this increase. Please advise.
A friend of mine just signed a rent-stabilized lease with a preferential rent, so I did some research for her. It's quite a confusing topic, but here is a good discussion of the ins and outs:
In brief, a preferential rent is sometimes given to get people to rent an apartment whose legal rent is quite high, above what comparable apartments in the area are going for. So the landlord can offer a lower rent, keeping in reserve the higher, legal rent. In most cases, the low rent is good only for the term of the original lease. After that, the landlord is free to charge the legal rent, or any amount up to the legal rent.
You have to read your lease carefully, because real estate agents have been known to lie and say, "Oh, he has never raised anyone's rent up to the legal rent, don't worry about that!"
In my development, where agents did tell people that, tenants got a raise of, in one case I know about, $1,200 a month after the year's lease was finished.
After the tenants move out in horror, the landlord gets a 20% vacancy increase. It pays to have people moving in and out! So get them in with a low rent and insure (pretty much) that they stay only a year. What a racket!
I had this same exact situation. Here's how it went down:
I got a really nice 2 bedroom apartment in a new building in the heart of Fort Green. The building itself was only 5 years old. The rent was $2900, below martlet. We also excited to find out the unit was rent stabilized!
Fast forward the next year our rent goes up to 3150! We were confused because with a rent stabilized lease the landlord can only go up 2%. $250 is way more than 2 %. I was like wtf is going on? After doing some research and talking with the city I found out what happened.
Even though we agreed to the rent rate of $2900 that was only the preferred rent. The "real" rent was like $3600. So they were allowed to go all the way up to that if they wanted. The rent stabilized rules only applied to the $3600. So my new lease had $3150 for the preferred and $3600 for the real rent. We really like the place so we ended up staying for 4 more years. The landlord was somewhat reasonable. When I moved out I was paying around $3300. Still below market rate.
My take on the preferred rent is this; it's a sneaky incentive to get renters. Rather then advertise something as net effective and have to give the renter free rent; the landlord can simply give them a "discount" and legally give them a huge increase when it comes to sign a new lease once hey are all moved in. This way they still get to advertise the unit as "rent stabilized". Knowing most people won't read or understand their lease.
My take on the preferred rent is this; it's a sneaky incentive to get renters. Rather then advertise something as net effective and have to give the renter free rent; the landlord can simply give them a "discount" and legally give them a huge increase when it comes to sign a new lease once hey are all moved in. This way they still get to advertise the unit as "rent stabilized". Knowing most people won't read or understand their lease.
Very sneaky.
So you're saying that advertising a unit as "net effective" is deceptive? HOW would a prospective tenant find out what's the real/legal rent being that they don't have access to rent rolls?
After the tenants move out in horror, the landlord gets a 20% vacancy increase. It pays to have people moving in and out! So get them in with a low rent and insure (pretty much) that they stay only a year. What a racket!
In theory yes it sounds great however if one apt keeps becoming vacant and marketed at a much higher price than the area it will remain vacant for a long time. Ive seen many apts vacant for upto 5-8 months because of this.
Quote:
Originally Posted by Principle Lewis
My take on the preferred rent is this; it's a sneaky incentive to get renters. Rather then advertise something as net effective and have to give the renter free rent; the landlord can simply give them a "discount" and legally give them a huge increase when it comes to sign a new lease once hey are all moved in. This way they still get to advertise the unit as "rent stabilized". Knowing most people won't read or understand their lease.
Very sneaky.
As someone who works in the industry, i agree 100%
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