As costs for a property rise in NYC, landlords begin looking for ways to recoup their losses through increased rent.
The ability to do so depends on the classification a property has been given by the city.
Certain rental units are considered to be rent stabilized and any rent increase that is allowed is governed by the NYC Rent Guidelines Board.
If a unit is not rent stabilized, then the city allows landlords and tenants to negotiate rent based on free market principles.
What If I Have a Rent Stabilized Unit?
The NYC Rent Guidelines Board meets regularly to determine what type of increase is allowed on stabilized rental units.
Their rulings dictate how much a landlord can increase the cost of rent for each unit.
For example: for 1 year leases than began in September 2015 and ended by October 2016, the NYC rent increase guidelines did not allow a rent increase at all.
If the lease was a 2 year lease, however, a 2% rent increase was allowed.
What If I Have a Preferential Rental Agreement?
Some landlords offer their stabilized rental units at a lower cost than is mandated by the NYC Rent Guidelines Board.
For tenants in this situation, a landlord is allowed to raise the rent on this unit to the full amount that is allowed by law.
In this example, a 2 bedroom loft may be allowed to rent at $1,350 per month. The tenants are renting it at $950 per month. On a 2 year lease with a 2% rental increase allowed, the landlord is permitted to charge $1,377. Therefore the NYC Rent Guidelines Board would permit a rental increase from $950 to $1,377 because of the preferential rental agreement.
The lease would need to expire because a fixed term agreement cannot be modified as it is considered a contract.
What If I Don't Have Stabilized Rent?
If you do not live in a rent stabilized unit in NYC, then New York's landlord tenant laws govern your agreement.
Although a rent increase is generally not allowed until the lease expires, there is no limit to the amount a landlord can increase the rent.
If they believe a rental unit is worth $4,500 per month and you're paying $1,350 per month, if the lease has expired, you could have the eviction process started if you do not agree to the rent increase and do not move from the unit.
These NYC rent increase guidelines are also subject to change.
It is a best practice to check-in with the NYC Rent Guidelines Board for updates to the rental increase policies so that you can make sure your rights are always enforced.
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