Tenants in four Brooklyn buildings have filed class-action lawsuits trying to retroactively redefine the monthly average rental number by taking concessions into account, The City first reported. The slate of suits allege that property owners who benefit from the city’s 421-a program gave rental discounts to tenants in stabilized units, but never reflected the new, lower price with the state housing agency.
- Legal corner – the dispute: The major legal question is how to property calculate monthly rent in a case where there was a previous rent concession before the rent reforms were passed. For example, let’s take a case where a landlord gave a tenant a two-month rent concession in 2017, and the average monthly rent was $2,484. In such a scenario, the owner correctly reports $2,775 for the unit in 2016 with the state’s DHCR. However, when the tenant renews the lease in 2019 – after the new rent laws went into effect – the building owner now by definition can increase the rent to $2,836 based on the previous rent reported to DHCR.
- Heard on the Street: Housing Rights Initiative: “By registering the higher, non-discounted rent price with the state, landlords are then able to use incorrect price as the basis for calculating future rent increases.” [TheCity]