I pay preferential rent and I'm getting new roommates. How do I avoid a rent hike?
A vacancy lease allows your landlord to raise your preferential rent to the legal maximum.
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I live in a rent-stabilized, three-bedroom apartment in Brooklyn. We currently pay a preferential rent. Two of my roommates are moving out but I am staying, and have two friends who want to move in. The landlord wants me to sign a new lease, not a renewal, and wants to raise the rent to the legal regulated rent, which is about $500 higher. Don't I have a right to renew the apartment at the same rent? Or do I have to take a new lease?
You’ve probably heard that you have a right to renew a rent stabilized apartment at roughly the same rent. That’s true, but when you want to add new roommates to your lease, things get complicated, according to our experts.
You, as the remaining roommate, are entitled to continue renting the apartment, but your landlord has to approve the addition of a new tenant to your lease, according to the Division of Homes and Community Renewal (DHCR). If they agree to do so, your landlord is allowed to give you a new lease.
A new lease—called a vacancy lease—allows your landlord to raise the rent to your apartment’s legally regulated rent instead of the preferential rent, which is what you’re paying now, said Sam Himmelstein, tenant rights attorney at Himmelstein, McConnel, Gribben, Joseph (and a Brick sponsor FYI). In other words, you and your roommates would be stuck paying the higher rent.
A way to get around the hike (sort of)
Under New York’s Real Property Law, you’re allowed to take on a roommate.
“The roommate law allows you to have one additional roommate if there's one person on the lease, but if there's more than one person on the lease, you can have more than one roommate,” Himmelstein said.
With only you on the lease, however, you would only be able to take on one roommate (unless one of these people is your spouse, dependent, or part of your immediate family), according to the section 235-F of the Real Property Law.
That would leave you and one roommate stuck paying probably more than you can afford in rent. But there is one possible solution to this problem, though Himmelstein noted he had never seen this type of situation play out in real life.
Your two current co-tenants could move out early, allowing your two new roommates to move in under the original lease. (Because your current lease has three named tenants, you’re allowed to take on two roommates.) Then, you could renew the lease under your name, though again, it’s important to remember that Himmelstein has never seen this theory tested.
Even if you do take on one or two roommates, that leaves you as the only tenant named on the lease in a precarious situation, Himmelstein added. As the only named tenant, you’d be responsible for the full rent bill.
“You would keep your preferential rent but you’re then the only person on the hook for the entire rent,” Himmelstein said. “You have to collect it from the roommates. If they don't pay, you can sue them.”
An opportunity for negotiation
You’re actually in a very strong position to negotiate a more moderate rent increase, said Jeffrey McAdams, a tenant attorney at McAdams Law.
You do have a right to bring on a roommate and renew the lease, in which case your landlord would get at most a 3.2 percent hike, if you renew before Sept. 30th, 2024. You can leverage that knowledge to negotiate yourself a rent increase below the legal regulated rent, but maybe above 3.2 percent, McAdams said.
“There's an opportunity here for compromise,” McAdams said. “You could negotiate with the landlord to let you replace your two roommates and increase the preferential rent to a compromise [on a new] preferential rent…instead of going to that top rent.”
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