Frequently Asked Questions: Preferential Rent


Frequently Asked Questions: Preferential Rent
Q: What is preferential rent?
A: Preferential rent is any rent charged to a rent stabilized tenant that is lower than the legal rent. If you are one of the 250,000 tenants with preferential rent your rent can be raised anywhere up to the legal rent when you renew your lease, which is some cases could mean a hike of hundreds of dollars!

Q: What is a “legal rent”?
A: There is a maximum legal rent for each apartment, based on the unique history of that apartment. It's not based on the apartment's size, nor the going rent of apartments in that area, nor the income of the tenant. Rents can be increased by small amounts every time the lease is renewed, and by larger amounts every time there is a new tenant or the apartment is renovated.
Q: How do I know if I have preferential rent?
A: The first lease you sign when you move in (or the first lease after you are offered a preferential rent) should contain language indicating that the rent is a preferential rent. At a minimum, your lease should list a legal rent and the amount you should pay. Sometimes preferential rents are called by a different name. For example, many leases call a preferential rent a "lower rent to be charged" or a "temporary rent concession". If your lease does not list a legal rent and a second preferential rent, this may be grounds to determine if you have preferential rent.

Q:  Can my landlord take away my preferential rent?
It depends.  Some tenants have a clause in their original lease that says they can keep their preferential rent “for the life of their tenancy” or for as long as they live in the apartment. It is important for you to look at your original or first lease to see if it has this language.  Additionally, it’s possible that the “legal regulated rent” claimed by your landlord is too high.  You should get your rent history and consider filing an overcharge complaint with DHCR.

Q: Why did my landlord offer a preferential rent? Should I be grateful, or concerned?
A: Landlords present preferential rent as a discount but it's often a way to hide illegal rent increases and punish tenants who request repairs.

Q: Is it possible to have preferential rent when the apartment is no longer rent stabilized?
A: In a market rate or unregulated apartment your landlord can charge you whatever they like. There is no legal rent in an unregulated apartment, so there can be no preferential rent. If a landlord is using this language, you should get your rent history to see if your apartment really is rent stabilized.

Q: I think I am being overcharged. Where can I go for help?
A: You can contact a state agency called HCR to request your rent history and file overcharge complaints.  Many tenant organizations can help you file with HCR or help get you a lawyer. If you use a private lawyer, make sure they only work with tenants and never with landlords.  You and your neighbors can also help each other by organizing  a tenants association. Talk with your neighbors, ask them to get their rent history too. There is a good chance that they are being overcharged as well. If they are, this will make all your cases stronger. Remember, you have the right to organize and your landlord can get in trouble for interfering.

Q: What are the risks?
A:It is always best to talk with a lawyer before starting any administrative or legal action to assess if you are facing unforeseen risk.
For further information, please see:
To talk to a lawyer:
Q: What is a rent history? If rent stabilization starts in 1974, why does it start in 1984?R3-Logo-Color.jpg
A: A rent history is a document you can obtain from a state agency called Homes and Community Renewal (“HCR”) that shows the registered rents for your apartment going back to 1984. This is when the state started to ask landlords to register apartments. The rents shown on your rent history are self-reported to HCR by your landlord, and HCR does not check what the landlord is reporting. There are also no fines for not reporting. It is not uncommon for registrations to be missing or incorrect due to the self-reporting system.  Your landlord will not know if you ask for your rent history.

Q: What is HCR?
A: Homes and Community Renewal, also known as HCR (formerly known as Department of Homes and Community Renewal or DHCR), states its mission as “to build, preserve and protect affordable housing and increase home ownership across the state.” Among other programs, HCR “enforces the State’s Rent Regulation Laws and protects the rights of tenants facing landlord harassment or rent overcharges.” They are the agency that monitors and enforces the rules of rent regulation.

Q: What is the four-year look-back rule? What are the exceptions to the 4 year rule?
A: Your rent history will have rent going back to 1984. As a general rule, however, HCR will only look back four years when considering a rent overcharge claim.  There are a few exceptions to the four year rule, however.  The first exception is that HCR will look back more than four years if the overcharge appears to involve “fraud” -- in other words, if it appears your landlord deliberately provided false information to HCR.  There are many ways to show fraud, and you can contact a tenants’ rights organization or lawyer for help interpreting your rent history.   One way to show fraud is to get organized. Fraud can often be proven by using multiple tenants’ rent histories in the same building or complex. The second exception is if you have preferential rent., HCR can look back to the year before the preferential rent started when considering an overcharge complaint.  The third exception is that if you are challenging whether your apartment is rent stabilized, the four-year rule does not apply to you.
Q: I have my rent history. How do I find out if I’ve been overcharged?
A: Your rent history might look confusing at first. It lists all the registered rents going back to 1984. First thing to do is to see if you are listed and check that the dates and amounts are correct. Then it’s time for some math: a simple way of figuring out if you have an overcharge case is Base Date Rent (rent registered 4 years ago) + Lawful Increases (vacancy bonus, renewal increase, Individual Apartment Increase (IAI), Major Capital Improvements (MCI), longevity bonus) = Legal Regulated Rent. Anything above this would be considered an overcharge.

Q: How much will I get back?
A: If HCR or the courts determine you are being overcharged you are entitled to treble damages -- three times the total  amount you were overcharged. This may mean that you get a payment from your landlord or that you deduct it from future rent payments.
Q: What should I do if I think something is wrong? How can I investigate and challenge the “legal regulated rent”?
A: There are three ways to challenge your rent, and the better option is not always the same for each tenant. You may want to consult a lawyer about which option is better for you.
1.     HCR Overcharge Claim -- you can file an Overcharge Claim with HCR using form RA-89, "Tenant's Complaint of Rent and/or Other Specific Overcharges in Rent Stabilized Apartments." The form is available at HCR offices, or at  An overcharge complaint does not involve any risk of eviction and it is the easiest method for tenants who aren’t represented by a lawyer.
2. Supreme/Civil Court -- you can sue your landlord in Supreme Court (or in some cases, Civil Court) for overcharge.  There is no risk of eviction if you use this option, but it would be best to consult with a lawyer and ideally obtain legal representation before bringing this type of case.

3. Housing Court – you can withhold rent, causing your landlord to bring a nonpayment case against you in housing court.  However, this option will put you at risk of eviction, so it’s best to only use this option after talking with a lawyer.