A Tale of an Illegally Deregulated Apartment and the Elephant in the Room

January 25, 2018

In this chronicle, I represent a residential tenant[1]. I’ve been thinking for a while about how to present this story. The truth is, it’s a very routine and boring story. A tenant needed repairs. He was having trouble scheduling the repairs with the landlord. The landlord sent my tenant-client a scary letter, telling him they were coming into the apartment, one way or another, on a certain date and time. My client was very upset because on that date he had to attend a medical appointment with his sick, elderly mother. I, therefore, sent a letter to the landlord. The landlord backed down, my office helped to schedule access, the landlord accommodated the tenant, the work got done, the story is over. But…not really.

In the course of my representation of the tenant, I discovered that this was an illegally deregulated Rent Stabilized tenancy, being treated as free market. I see these every day. I estimate there are 250,000 illegally deregulated Rent Stabilized apartments out there. I, of course, informed the tenant. I apprised the tenant of his options for enforcing his rights, which are actually many in this situation, and the pros, cons, costs, time frames, and risks of each. I let the tenant know that he was likely being overcharged on the rent.

The tenant told me, however, that he did not wish to pursue his right to a Rent Stabilized lease and an overcharge. In fact, he forbid me to mention my discovery in any way in any of my communications with landlord. The landlord wasn’t moving to evict him, he was comfortable with his rent, he had a long and generally good relationship with the landlord, he wasn’t a litigious fellow, his mother was sick. His position was simply – if it aint broke, don’t fix it.

I couldn’t argue with that, and it wouldn’t matter if I did. It was the client’s choice. I have witnessed this odd form of détente between landlords and tenants before in illegally deregulated apartments. Rent regulatory status is the elephant in the room that neither landlord nor tenant ever invokes against the other. For now anyway…

If a developer buys the building and sees tenant’s apartment on the rent roll as “Free Market” and then refuses to renew tenant’s next lease, I am guessing that tenant will be emailing me.