Are stabilized increases based on the legal or preferential rent?
Under rent regulations amended in June, 2003, existing tenants who pay a “preferential rent” (meaning that the owner initially agreed to an amount lower than the legal rent) may not be entitled to renewal increases based upon the preferential rent amount. For instance, if the legal rent is $1,200 but the landlord charges $1,000, any increase may be based on the legal rent of $1,200. Thus, if the tenant chooses a one-year lease renewal and the guideline increase is 4.5% for a one year lease, the tenant in this example may face a maximum increase of $254, raising the maximum rent to $1,254. In April, 2008, DHCR updated the procedure for determining whether preferential rents have to be charged for the remainder of the lease term. Please read this fact sheet on preferential rents. The only way you can ascertain the legal rent is to call the Division of Housing and Community Renewal (DHCR), the state agency that administers the rent laws, at (718) 739-6400, or (212) 961-8930, and ask for a
