You will undoubtedly find your rent history long and perplexing. This is because DHCR does not require landlords to provide explanations when they increase rents, even when registering large jumps in the rent. Generally, landlords only need to offer you and NY State an explanation of their logic when challenged in a lawsuit or complaint within a specific time frame.
Take a deep breath and let’s get started with these tips to identify red flags:
Tip 1: Work backward & look for large jumps in the rent
Yes, rent histories often go back to 1984. But if you file a complaint, DHCR will most closely consider the rent increases in the last four to six years. If there’s evidence of intentional fraud — that is, a landlord increasing the rent without a legal basis — DHCR will look back farther. Starting from the last year, scan your rent history for any huge jumps in the rent and use the resources below to see if those jumps make sense.
Because the rent laws change periodically, the amount a landlord can increase the rent changes from year to year. In 2019, the law changed to eliminate loopholes that allow for large rent increases. Because of these changes, you should note whether rent jumps occurred before or after 2019 (when the Housing Stability and Tenant Protection Act (“HSTPA”) passed). Simply put, large increases or deregulations occurring after June 2019 are usually suspicious.
Large Rent Hike Reason 1: Vacancies
When a tenant moves out, this is called a “vacancy” because the apartment becomes empty at least for a short period of time. If the vacancy occurred before 2019, you may see a legal increase of around 20%. Prior to 2019, sometimes landlords created “fake” tenants in order to report a vacancy and increase the rent 20%. So, ask your long-term neighbors if they remember the tenants listed on your rent history. In addition, when you file a complaint, the landlord may need to provide past leases and other proof of that tenancy to DHCR.
Large Rent Hike Reason 2: Individual Apartment Improvements (“IAIs”)
If you see an increase larger than 20% before 2019, you can assume the landlord relied on the cost of renovations (called Individual Apartment Improvements (“IAIs”)). Look around your apartment and do some math. Does your apartment look like it received renovations during the time period that the rent increased more than 20%? Do you have a new bathroom? New kitchen? Brand new appliances? Based on your building size, figure out how much the landlord would have needed to spend prior to 2019:
Buildings of 35 or fewer units: Landlords could add 1/40th of the cost of renovations into the rent permanently.
Buildings with more than 35 units: Landlords can add 1/60th the cost of renovations into the rent.
Note: IAIs should not include basic maintenance like repairing broken appliances, painting, or patching floors.
Caption: Between 2013 and 2014, the landlord increased the rent by nearly $2,000 or more than 400%. Even though this jump happened many years ago, an increase this large may indicate fraud and may allow a longer look back.
Tip 2: Watch out for preferential rents
Landlords sometimes tell tenants they are getting a deal, called a “concession” or “preferential” rent. A preferential rent will often appear on the lease itself next to a larger number that represents the “legal” rent (i.e. what the landlord reports to the state as the maximum amount they could charge). Concession rents, on the other hand, often take the form of free months of rent (either upfront or during the first lease).
Tenants with these “deals” rarely complain or even order rent history, and courts have therefore found that preferential rents often serve to disguise fraud. If you have a preferential or concession rent, DHCR or a court might be willing to look back farther in your rent history for an overcharge.
Caption: Because this landlord has offered a preferential rent for many years, filing a complaint may trigger an investigation going back farther in time!
Tip 3: Watch out for huge, abrupt de-regulations!
Prior to 2019, once rents hit a specific “magic number,” landlords could remove an apartment from rent stabilization forever. Once removed from rent stabilization, a unit becomes “market rate,” meaning future tenants have no protections against large rent increases or eviction without good cause.
If you see that your landlord stopped registering your apartment before 2019, it may be because the landlord increased the rent above the thresholds listed below. It may take a lawyer’s assistance to help you determine if the landlord deregulated the unit illegally. But, no matter when deregulation happened, if your landlord illegally removed a unit from rent stabilization, you can file a complaint asking for recognition of your rent stabilized status.
Rent Amount Necessary to Deregulate:
June 19, 1997 - June 23, 2011
June 24, 2011 - June 14, 2015
June 15, 2015 - June 13, 2019
: $2,700+ yearly RGB increases
June 14, 2019
: High rent decontrol repealed!
Caption: Example of a mysterious and abrupt deregulation. After 2006, the landlord claimed this apartment “exempt from registration” without explanation! Other landlords may just have stopped registering rents altogether and the rent history could say “no registration found."
Tip 4: Learn how rents legally increase
Rent stabilized tenants get to choose between one- and two-year leases at every lease renewal, and, in New York City, the Rent Guidelines Board (“RGB”) determines the percentage increase. New increases take effect for all leases that start on or after October 1st. Because the RGB is politically appointed, the mayor plays a key role in how much the rent goes up (anywhere from 0-9% historically). Knowing about these increases not only helps you read your history but prepares you for rent increases going forward. Check out this chart on the RGB website to understand rent increases over time and to get information about this year’s increases.