Rent Increase Allowed When Prime Lease Renewed

Rent-stabilized tenant asked landlord for permission to sublet while his first lease was still in effect. Under the Rent Stabilization Code, landlord couldn't charge tenant a sublet surcharge because tenant wasn't subletting while under a renewal lease. Landlord asked the DHCR if it could charge the increase when tenant's renewal lease went into effect two months later. In an opinion letter, the DHCR said ``yes.'' Landlord can charge the sublet increase, which is equal to a vacancy guideline increase, when the renewal lease becomes effective. The sublease follows the prime lease. For example, tenant's rent under his vacancy lease is $794.80 in August 1992. This is the amount tenant must pay landlord until October 1992, when his renewal lease becomes effective. At that point, landlord can charge tenant $874.28. This amount equals $794.80 plus 10% of $794.80 (5% of a two-year renewal and 5% for the vacancy allowance permitted under Rent Guidelines Board Order No. 24).

DHCR Opin. Ltr. by Nathaniel Geller (7/30/92) [2-page document]