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