421A rent increase

They can pretty much charge whatever they want.

I am not sure i understand the question. If you are in a rental building where the owner has a 421a abatement that means all apartments are stabalized and they are able to only increase by the 1 to 2 year percentages as set by the rent stabalization board. If you then have preferential rent to go from market rent to rental amount that you are paying, then they pretty much could do whatever they want with this amount including taking it away altogether.

If you don't know what you are talking about, or don't understand the question, why bother responding.

Answer:

In 421-a buildings, where the tax benefits are for 10 or more years, and provided that a
"2.2% lease rider" is offered by the owner and signed by the tenant, owners can collect
annual "421-a" surcharges equal to 2.2% of the rent charged at the beginning of the period
of gradual diminution (when real estate taxes begin being phased in).

I really don't understand. How much is your rent currently, before this 421A increase goes into effect?

Rent could be very high...just look at all of the luxury Related buildings, rents are upwards of 6k-8k a month and are stabilized...2.2% on that is substantial

Anyone who can afford $6K-8K/month on rent can certainly afford the annual 2.2% increase.

apt_boy you are assuming it is a rider, but the point is that if she had preferential rent the landlord could pretty much do whatever he wants anyway.

Who said anything about preferential rent? That has absolutely nothing to do with 421A and 421A surcharges. As noted, if you're not familiar with the terms of that program, what value does your comments add?

"but the point is that if she had preferential rent the landlord could pretty much do whatever he wants anyway."

Mikev, the point is you are worse than clueless, you are dangerous.

"Who said anything about preferential rent? That has absolutely nothing to do with 421A and 421A surcharges. "

You liar. I live in a 421 unit, and also have a preferential rent.

And one of your neighbors lives in a 421 unit, and also has a bottle of vodka, and I'm surprised that Mikev didn't go off on about the temperature that vodka should be served at.

Yes, I also live in a 421 and have preferential rent, but hat has NOTHING to due with the 2.2% surcharge

TWO SEPERATE ISSUES

My head just exploded from the nonsense on this site...now I know never to take any advise from anyone becasue it will be wrong

I am not understanding your rant. 421 apts with legally allowable rent absolutely can have much lower ACTUAL rents. My building is one such place. This is the point people above are making. the ALLOWABLE rent might be $8k/month under rent stabilization, but the ACTUAL rent TOP is paying could be $6k per month, especially if they rented post-Lehman with a 2-year lease.

Hey jason, if possible my head expoded again after reading your post

Not going to bother on this anymore as people just don't get it...like trying to convice a crazy person the sky isn't brown, it can't be done and it will only make yourself insane in the process

If you have 421a "preferential" and a 2.X% rider (like i do), can they raise it only 2.X% of my preferential rent, or can they bump it up to the legally regulated rent if they want (BIG $$$$$$ and almost double market price)? Thanks!

yes they can, please don't make my head explode again, it is the holiday season

Did Jason say he gets a government subsidy on his place?

See

"Are stabilized increases based on the legal or preferential rent?

Under rent regulations amended in June, 2003, existing tenants who pay a "preferential rent" (meaning that the owner initially agreed to an amount lower than the legal rent) may not be entitled to renewal increases based upon the preferential rent amount. For instance, if the legal rent is $1,200 but the landlord charges $1,000, any increase may be based on the legal rent of $1,200. Thus, if the tenant chooses a one-year lease renewal and the guideline increase is 4.5% for a one year lease, the tenant in this example may face a maximum increase of $254, raising the maximum rent to $1,254.

In April, 2008, DHCR updated the procedure for determining whether preferential rents have to be charged for the remainder of the lease term. Please read this fact sheet on preferential rents.

The only way you can ascertain the legal rent is to call the Division of Housing and Community Renewal (DHCR), the state agency that administers the rent laws, at (718) 739-6400, and ask for a determination or a review of their records on the apartment in question."

http://www.housingnyc.com/html/resources/faq/rents.html#based

Here is the fact sheet:
http://www.housingnyc.com/html/resources/dhcr/dhcr40.html

I paid a RE lawyer to check on my EXACT building. I checked with 311 myself. I am 100% correct in what I say above.

Jason, you owe me a new computer because my brain particles got wedged into my keyword after my head exploded for the third time after reading your post. The brain particle stuck under by enter key knows more about real estate than you.

Please explain Apt Boy how me cutting and pasting from
an NYC website on rent control makes me wrong.

Haha, Jason has to get a $3,000+ subsidy from his landlord, sponsored by a government program, in order to live in his apartment.

Jason is a beneficiary of Rent Control.

421a buildings do have preferential rents. But it works in a different way than most people think. The landlord can not charge whatever he wants. The landlord can charge the 2.2% increase of the first rent established for the apartment. However, he can waive it. It's worth trying to negotiate.

No TMC, the first rent can be flat-out stated in the lease to be a preferential rent. And that rent has no relation to what the legally allowed rent it. Re-read what the NYC.gov website actually says.

When your lease expires, the landlord can not charge any rent he wishes. When you vacate, it might be a different story. 421a buildings have preferential rents but for a different reason (and I forget the reason). Can I be wrong? Sure. But if I am, our company has been getting the wrong legal advice from the legal "experts" for a few decades. We've developed many 421a buildings.

In rent stabilized buildings, including 421a buildings, preferential rent is less than the legal rent. A preferential rent is offered when the landlord can't achieve the legal rent due to market conditions. When the lease expires, the landlord may raise the rent up to the legal rent (which can be adjusted each year by the allowable increase even if not charged to the tenant). This is why turnover is so high for units leased two years ago. The tenants are paying preferential rents significantly below the legal rent. The rental market tightened and when those two-year leases expired this year, the landlord was able to charge (and get) the legal rent, so many tenants who were outraged by the increases or can't afford the legal rent have moved.

I love how Jason benefits to the tune of $40k pet year from a government subsidy program.

The initial question was about the connection of the rent stabilization rent and 421A surcharge. On the renewal lease form under #4 it talks about separate charges, one of them is the 421A (2.2%) This charge goes on top of the rent, in other words, it's added to the legal rent. It has nothing to do with the preferential rent as the preferential rent is a number that is below legal and the landlord is not taking the maximum under the law but is getting what the market will bear. On legal rent it's an additional number (421A (2.2%)) on top of the regular allowed increase of rent stabilization per year. Rent + rent stabilization increase (for 1 or 2 year lease) + 421A (2.2%) extra charge= new legal rent

I need to correct my previous comment....The 2.2% is calculated on the first ever rent for the apt. and that same value is added to the rent every year for a maximum of 9 years. That would be on top of the regular rent increase that is added with regards to the rent stabilization rules.