With Spring seeming like it’s finally here to stay, many tenants are getting ready to take the plunge and move into a new apartment. Most likely, you will come across rent-stabilized apartments and we though you should understand what it all means.
So what does rent-stabilization get you and what should you watch out for?
- Limited rent increase potential: a cap on the amount of rent increase that a landlord can impose upon the renewal of the lease. These limits are set every year and are intended to protect tenants from exorbitant rent hikes or greedy landlords.
- Semi-guaranteed renewal rights: you are basically guaranteed a right of renewal of your lease, short of any egregious acts that would warrant an actual eviction. (Note that this is unlike co-op rentals, condo rentals, and non-stabilized units where landlords can choose to not renew your lease.)
What renters need to watch for when they sign leases, however, is the base price considered for rental increases. There is a difference between preferential rent (what you’re paying) and legal rent (what’s on the books, which may well be almost double what you’re actually paying) … and it’s the legal rent that’s typically considered the base for rent movements. In such a case, the key is to try to negotiate the rent increase calculation off the preferential rent, if at all possible. Otherwise, you may be left scratching your head a year from now when you see a $200 increase added on top of a rent that’s 20% greater than what you’re paying now.