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Two key issues face residential owners.

The challenges of owning and managing residential real estate for any meaningful profit in New York City seem to increase every year. This is particularly true in a year when the forces of economic downturn join hands with our perennial foes, the judges of the New York City's Housing Court. Nineteen ninety-three is also an election year when everyone running for office needs to appear to be "pro-tenant.'

Our firm, which specializes in landlord tenant matters, receives numerous daily inquiries from real estate professionals seeking to understand the laws and regulations so they can maximize their bottomline while complying with applicable law. Following is a brief discussion of two issues about which we received numerous inquiries in 1992.

How to Properly Lease anti Register Preferential Rents

In the current economic climate, landlords often are forced to rent apartments for less than the legally regulated rent. Although there currently are no approved regulations by the State Division of Housing and Community Renewal (DHCR) outlining practices for landlords to follow in order to preserve the maximum legal regulated rent, it is advised that both the lower "preferential" rent and the legal regulated rent be annually registered to increase the landlord's opportunity to maintain the maximum rent. One caveat -- the preferential rent becomes the base rent for determining any increases until the next vacancy. Another option, a one-time rent concession, would be an acceptable means of lowering the effective rent for a stabilized apartment without in any way affecting the legal regulated rent. You must be certain, however, to have clear and specific language about the concession in the lease.

Water Consumption Bills Ave on The Rise

The individual water metering program finds the city requiring buildings to have meters installed so billing can be based on actual water consumption, rather than building frontage. As 1992 began, the Water Board extended the window of opportunity for voluntary meter installations at buildings in the City, as well as the first year moratorium on metered bills.

Tremendous concern was expressed throughout the year by owners over the increased costs for water that individual metering will usher in, coupled with their inability to pass along this increased cost to tenants.

Various industry organizations are considering sponsorship of a lawsuit to challenge individual water metering.

The city has finally begun a formal complaint and appeals process that permits owners to challenge and have reviewed water bills that they believe are excessive. Incredibly, until this complaint and appeals process was instituted, owners had no formal procedure allowing them to challenge water bills. The appeals process involved two city agencies: The Department of Environmental Protection and the Water Bureau.
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Title Annotation:Review & Forecast, Section III; information of proper leasing and registration of preferential rents and control of water consumption charges
Author:Rudd, Mark
Publication:Real Estate Weekly
Date:Jan 27, 1993
Words:440
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