NYCLT testimony on Rule 2-06.2 Interim Rent Guidelines & Total Rent

There are some very good things in Rule 2-06.2. We applaud the Loft Board for listening to tenants and deciding to set the interim rent adjustment at 0% for tenants who hadn’t had an increase in years. This is fair because there was always a reason why landlords weren’t able to extract more rent in a lawless market where they held all the leverage. The most common reasons were rent already being high and poor maintenance.

Another point in this rule that is a great relief to tenants is that it spells out so clearly and concisely that any increases they took after June 2010 will be refunded.

However, there are still a couple of glitches in this rule. One is that tenants appear to be still liable for paying those illegal increases until they file an overcharge claim. This makes them vulnerable to collections claims and eviction if they refused to pay extra rent they did not in fact owe. We request that the rule clearly state that it is permissible for tenants to withhold rent they don’t actually owe, rather than having to pay until winning an overcharge claim.

Another messy point in this rule is that it gives the landlord the choice of either refunding the overcharge in a lump sum or discounting the rent by 20% until the overcharge is returned. We feel that this will create a bookkeeping nightmare which will be unenforceable and may prompt tenants to withhold rent where they should not. The full amount should be returned as a lump sum or on a payment schedule, not offered as a rent reduction.

Rule 2-06.2 also allows the landlord to continue charging whatever escalators are in the tenant’s lease that were being paid in June 2010. A brief survey of our membership revealed that many tenants are paying outrageous garbage charges (whether or not they had curbside pickup), water charges, disproportionate real estate taxes, sub-metered gas and electric with very little accountability, gas or electric charges based on proportionate square footage, service charges on top of utilities, and more. The Loft Board should expect to see some “interesting” overcharge proceedings based on these escalators. Please consider this language carefully.

NYCLT testimony on Rule 2-12 Rent Adjustments

The purpose of the Loft Law is to make buildings safe and bring order to a chaotic situation. One of the most chaotic and agonizing problems for loft tenants is the issue of rent, and the Loft Board has an opportunity to make more sense out of rent in Rule 2-12.

Loft landlords are used to asking for increases haphazardly, based on what they think they can get and how much they like particular tenants. In many or most loft buildings, the landlords are still asking for illegal increases two years after the law passed, even where tenants have told them they aren’t allowed increases until they reach compliance milestones.

So heading into the IMD process it’s still unclear when a milestone increase is due and what the legal rent is. The investigation is left entirely up to tenants.

We ask that the Loft Board bring a little bit of clarity to this situation. Please require that landlords notify tenants of milestone increases by filling out a form and sending copies to the tenants and to the Loft Board. And please provide a simple way for tenants to retrieve this information from their file. This is similar to how DHCR keeps track of rent rolls in rent stabilized buildings.

As we testified in previous hearings, tenants moving into covered units after June 2010 are often charged much more than the legal rent. Although they will still have to apply or be added to the building registration to find out their correct rent, having a record of the legal rent on file will bring them one step closer.

We also ask that the Loft Board allow written comment on this rule until Rule 2-01 has been considered, because these rules are tied tightly together. In particular it is unclear how the implementation of the new “no work” clause in the Law will affect rent adjustments.

NYCLT Testimony on Harassment Rule

Our testimony on Rule 2-02 Harassment from July 19.  The last big hearing on Total Rent and Rent Adjustments is 2pm this Friday July 27 at 280 Broadway 3rd Floor, and they start deliberating on our testimony August 2 at 22 Reade.  Please show up!

Before June 2010, loft landlords and loft tenants were used to living outside the law. For landlords, this meant being able to get away with almost anything, from poor maintenance to replacing tenants and jacking rents at will. For tenants, this meant a continual state of fear.

The Loft Law grants new rights to tenants and aims to end the predatory practices of landlords. This is a difficult transition, and landlords do not adapt to change easily. Many react with outright hostility.

You’ve heard about some of the worst cases because they come up in the press, and you’ve heard some of these stories today. A landlord installs a biker gang in a tenant’s vacated space and the gang threatens and attacks the remaining neighbors. A landlord blocks the egress in order to obtain a vacate order, and then cements the tenant’s shower. Another landlord builds a wall that completely blocks tenants from their spaces. Denying elevator access, removing hot water, changing locks… the list goes on.

What you haven’t heard are the more subtle forms of harassment which plague tenants all over. One reason you don’t always hear these stories is that harassment works. One tenant I know of complained about maintenance problems, so the landlord said the tenant would have to move out. When she didn’t, the landlord attempted to jack the rent, said the tenant is using too much air conditioning, and started bombarding the tenant with collections notices. Needing good credit to conduct her business, the tenant moved out.

Another landlord tried to raise the rent; the tenant refused to pay because of leaks and continual unannounced parties on the roof. So the landlord told the tenant he would have to leave. He didn’t, and the landlord responded with collections notices. The tenant moved out.

Tenants in IMD buildings all over Brooklyn are being told they need to accept huge rent increases because their leases are up. The landlord gives two choices: either sign a new lease at the higher rate, or move out immediately.

Rule 2-02 on Harassment is vitally necessary. Unfortunately it is very difficult for tenants to seek protection under this rule. They must hire an attorney and endure a lengthy series of hearings, risking severe penalties if their application is found to be in bad faith. If successful, they don’t stand to gain anything but an end to their landlord’s bad behavior.

NYCLT was relieved to hear serious discussion of harassment during the Loft Board meetings on Rule 2-11.1 Fines this spring. This resulted in a helpful list of circumstances which should be considered harassment.

2-11.1(b)(2) contains the following language:

  • Harassment which “impacts on the tenant’s safety” includes but is not limited to “refusing to make repairs, repeated housing maintenance violations intended to render the unit uninhabitable, assault, battery, or threats of violence.”
  • Harassment which “impacts on the tenant’s quality of life” includes but is not limited to “creating excessive noise or odors, threatening eviction, filing false registration statement, refusal to consent to sublet, and tampering with mail.”

Aside from fraudulent collections actions and the current ongoing practice of haranguing tenants to sign narrative statement waivers under false pretenses, these definitions include most of the common forms of harassment we are seeing today.

We request that the Loft Board include these definitions in Rule 2-02.