As we enter July, we also enter the peak rental session in NYC. If your lease is soon up for renewal, you should be, prepared for a potential rent increase. Something just about every New York tenant experiences at one time or another. Increased operating costs for landlords partly drive such increases and, the thinking goes, landlords expect that after your first year, you’ll be too broke or lazy to move again. Fortunately, it is possible to negotiate how much it increases.
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The need-to-know on lease renewalsThe need-to-know on lease renewals
At present, owners of buildings with rent-stabilized apartments can only raise their rents by a certain amount each year. For one-year leases, it’s up to 1.25% while for 2-year leases, it’s 2% until September 30th, 2018. Recently, the Rent Guidelines Board approved changes to these increases, which will take effect from October 1st, 2018, until September 30th next year. From then, it will 1.5% for one-year leases and 2.5% for 2-year leases. For market-rate apartments, landlords can raise the rent as much as they like.
Now is an excellent time to negotiate for a smaller increase as landlords have had a tough time this year. Let’s face it; they don’t want you out; they just want more money. Provided you’ve been a good tenant; they don’t want you to leave as this will mean a loss while they search for a new tenant. The key in these types of negotiations is to find a solution that keeps both you and the landlord happy. Every situation is different, so it’s up to you to decide how long to drag out negotiations or whether to accept a final offer or not. Whatever the case, here are some tips to help your case.
Be calm and stay respectfulBe calm and stay respectful
Leave the baseball bat at the door; threats and stern language will do you no good here. Instead, be calm, respectful, and make a good opening in finding a compromise. Something along the lines of “I’ve been a respectful tenant for X amount of time and have always paid my rent on time. I enjoy living here and wish to continue, but the proposed increase is far too high for me to pay. I would like to discuss the terms and find something that we can both be happy with.” A phone call or email is usually a good start. If that doesn’t get a response, go in-person to pay next month’s rent.
Stress how good of a tenant you’ve beenStress how good of a tenant you’ve been
The qualities of a good tenant are more in what you don’t do. Point out that you’ve always been on time with rent, have never received a complaint from the neighbors or broken so much as a teacup. If you have done any of these things, it’s probably best not to bring them up.
Research the marketResearch the market
Find out if property prices have gone up or down in your neighborhood through borough specific market reports. If you are paying more than the market value after the increase, this can be a big tipping point. Coming to negotiations armed with numbers puts you in a much stronger position than the tenant who has little else but a sad story.
Ask for concessionsAsk for concessions
Concessions and upgrades are far easier to acquire than price changes. Would you be willing to pay the increased rent if the landlord agreed to replace some fixtures? What about a bathroom renovation? If they don’t budge on the money, this can be a good chance to weasel something else out of them.
Offer money up-frontOffer money up-front
This is unlikely to work with large companies or the super-rich. But for smaller companies and families, a few hundred in the bank now is usually better than a grand spread out over one year. In exchange for a lower rent increase, offer to pay.