Explanation of Rent Stabilized Tenant

In some communities, there is a term that is called “rent stabilization.” Many landlords are familiar with rent control, where they can only charge a certain amount of rent for the unit that is occupied by a tenant. For a rent stabilization tenant, the amount of rent can increase by an allowable percentage each year, as determined by law, and the tenant has the right to renew their lease. It is generally only in areas that have seen sharp increases in rent, but can be applied anywhere based on local statutes.

The Idea Is To Balance Profitability and Affordability

Rent stabilization occurs primarily in units that are priced at $2,500 per month or less. It most often occurs because there is a housing emergency in the community where the apartments are located. To qualify for rent stabilization according to all current laws, an apartment complex must have at least six units and have been built before 1974.

If a building was built before 1974, and especially in buildings that were built in 1947, a tenant may qualify for rent stabilization if certain conditions are met based, including modern upgrades to the building. A rent stabilized unit is entitled to specific services in their leasing agreement, just like other tenants. If a landlord fails to provide services, the governing authority for rent stabilization has the authority to lower a tenant's rent.

Rent Stabilization Applies Even to Non-Occupied Units

The unique aspect about a rent stabilized tenant is that the governing authority considers the apartment itself as the tenant and not the renter. For the landlord, that means the unit itself must be rented according to the maximum rent raise standards that happen every year whether it is occupied or not.

The history of this law dates back to the days of World War II. When the United States was fully engulfed in the war and everyone was employed so that the war effort could be supported, housing suddenly became a premium commodity and rental rates were spiking everywhere. Federal legislation was passed to control these rates to provide a fair opportunity for renters to have a home so they could work and support the country. After the war, the national legislation ceased, but the need to control inflation in certain areas was still a priority. That's why rent stabilization is in place. The income of a resident does not affect the stabilization of rent whatsoever. As long as a tenant qualifies to live in the apartment, they become part of the unit itself in the eyes of the governing authority. It must be used as their primary residence, however. If a landlord sees that it is not a primary residence, then the unit will lose its rent stabilization status through the remainder of the leasing period for that specific tenant only. A rent stabilization tenant has some guarantees, but so do landlords so that everyone can balance affordability and profitability. If you live in an area with rent stabilization, make sure you take a look at your local laws today to make sure you stay in compliance.

Posted on Jul 14, 2014


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