The Real Deal New York

Stuy Towners flummoxed by rent increase clause

February 07, 2013 08:30AM

Thousands of residents in Stuyvesant Town and Peter Cooper Village are flummoxed by a lease clause that allows their landlords to hike their rent in the middle of their lease, the Wall Street Journal reported.

Roughly 40 percent of the 11,200-unit complex could see rents rise as much as $1,500 due to the clause, which was the result of a previous lawsuit tenants brought against a consortium of investors led by Tishman Speyer and Metlife, and against landlord CWCapital Asset Management. The residents argued MetLife and Tishman Speyer — which paid $5.4 billion for the complex in 2006 — improperly deregulated the rent-stabilized apartments while simultaneously taking J-51 tax benefits, as The Real Deal previously reported. The roughly $147 million settlement is expected to be finalized in April, at which time the complex’s owners could move to raise the rent.

Some tenants who signed the lease with this clause told the Journal that they didn’t notice the clause, or were assured by their agents that it would never be enforced. “The rent is very unlikely to be raised mid-lease, and would only come from a court order,” a leasing agent wrote to a tenant in an email reviewed by the Journal. “It is not something the landlord would choose to do.”

Local officials and tenant advocates have taken up the mantle for the tenants, pushing CWCapital to commit to leaving the rents at their current levels. In a letter addressed to the landlord, politicians including City Council Member and Stuyvesant Town resident Daniel Garodnick, U.S. Sen. Charles Schumer and City Council Speaker Christine Quinn said that they were “deeply skeptical of the legality of such a right, if exercised, and urge you not to take advantage of it.” [WSJ]  –Hiten Samtani

  • Anon

    If you can’t afford the market rate rents there then you shouldn’t have signed the lease.

  • DB

    Anon, did you read the article? It’s saying that the rents are unscrupulously being increased due to a loop hole written into the lease, not that people who signed the lease can’t afford the current rent. This loophole was not included in tenants orig leases, not pointed out in the lease renewals, and when tenants questioned it were assured that it was just legal language that wouldn’t affect them.

  • Roman

    How about the lease clause that says you wave the right toa jury trial. I lie to all those that rent…just like the rest of us.

  • Ann

    This type of thing is what is causing Manhattan to lose its desirability!! Eveeryone is a scammer starting with the landlords who tell the very tenants they rely on that there is a line waiting on your apartment. Rent regulation has to come back for this city to work!!!
    Look at Mercedes House the bedrooms are 10 feeet wide by 11 feet something. A bed can hardly fit in that room!!! look at the rent!! $3,600 I hope tenants and those buying apartments begin to realize that they are being hood winked and robbed!! We used to be a great city now we are just a joke waiting for the next big laugh!!
    Since no one is looking let me bring it to your attention. Rent is being fprice fixed in Manhattan!! Schumer you had better do something about this if you want my vote next time!!!
    Shame on developers who have no integrity. But then they would not know what shame is!!

  • Ann

    DECEPTION DECEPTION DECEPTION. When are lawyers going to realize that they are obligated to do the just and right thing?!!! sneaking such a clause into an Agreement is only trouble waiting to happen. This attorney and the company that hired to do such a thing should be sanctioned and they should loose whatever rights they have to this project! We as Americans must bring back integrity and common decency back to the business table. The rest of the world is looking at us and we are not looking good. We used to be the honest and trustworthy people. Now we have become no more than skank and liairs and cheats while we smile and think its OK to do such disgusting things!!! Shame on those who continue to behave in a dishonest manner. Jail might make an example enough time in jail to stop this illicit behavior.

  • Aren’t the tenants who won the case rent-regulated?? If they have rent-regulated leases, how is the landlord able to raise the rent mid lease? And if they are rent-regulated, how are they able to raise the rent so much anyway?

    Are we even talking about the tenants who were part of the class action? Or are we talking about tenants who didn’t qualify and remained market rate.

    There’s a lot of info being left out here.