An Inclusive Litany

12/26/94

Rent control laws in New York have resulted in a number of creative schemes for paying less for an apartment than its actual market value.

In one, a tenant who is renting an apartment for $400, but which is actually worth $1,200, takes in a roommate who is eager to pay the fair market rent of $600 a month. The official tenant is then able to pocket the $200 difference, despite a law that allows tenants only a ten percent increase on the rent they can charge. The roommate has no incentive to report the primary tenant, since the roommate also has a great deal on an apartment. In many cases the roommate does not know how much the tenant is paying, and how much windfall profit is involved.

In another scheme, the roommate manages to pay the landlord directly with his own check, perhaps after convincing the primary tenant to withhold rent for some reason. If the landlord makes the mistake of cashing the roommate's check, rather than that of the primary tenant, the roommate legally becomes the tenant in residence and is entitled to a new lease in his name upon renewal.

In another, the tenant maintains a voter's registration card and driver's license, along with perhaps a credit card or two, at the address of the rent-controlled apartment, while moving elsewhere. This is sufficient compliance with the vague primary residence law, and usually enough to frustrate any private investigator that the landlord hires.

In another, a tenant who was otherwise planning to move out of the apartment demands a large fee from the landlord for doing so.

In another, a tenant in a building that is about to convert to co-op status refuses to buy the apartment from the landlord, instead preferring to continue his advantageous position of paying less than market rent. Another approach is to buy the apartment at the bargain basement prices the law requires of landlords, then turn around and sell it at an immense profit.

In another, a prospective tenant of a professional suite (which, along with other commercial property, are not subject to rent controls) installs a bed or sleep couch and starts living there. Even if the Certificate of Occupancy and the lease calls for professional use only, and even if the residency was achieved through deception, the apartment automatically becomes rent-regulated due to the severe housing shortage in New York, a predictable result of rent control laws.