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May 31, 2016 12:06PM

Renewal notices without renewal rates?

Staff Member REdirect Consulting
Article by
Staff

There are a few key dates indelibly etched in the calendars—if not the minds—of all New York property managers. These include:

  • October 1—New lease renewal rates go into effect
  • July 31—the deadline for filing the Annual Apartment Registration with the NYS Division of Housing and Community Renewal (DHCR)
  • April (month long)—the billings on which your DHCR filing is based. (For more information on why April billings is such a crucial month for New York property managers—and how to make the most of them—check out this explanation.)

New York property managers also know full well that, in New York City, all tenants must receive their notice of lease renewal 120 days prior to the lease expiration.

This means that, by June 1, all New York tenants whose leases expire on September 30 must be notified of their rent renewals even though the renewal rates aren’t established yet. Entering a rate lower than what is decided in October could mean you lose out on big bucks. Entering a rate that’s too high could land you in court. So what’s a New York real estate owner to do?

The solution is simple: calculate the renewal at the current rate, but note that the new rate is, as yet, unknown. This allows you to meet your legal obligation to send out the renewal notice, without boxing you or your tenants into an unfair rate for another twelve months.

For Yardi users, this simple—but admittedly open-ended—solution is made even easier. Yardi’s New York Add-In module features—among many other incredibly helpful NY-specific tools—a table that you insert when configuring your lease renewals. Simply make sure that the box that says “Unknown Rate” is checked off, and that previous years’ rates have been entered, and you will have a DHCR-compliant lease renewal ready to go.

 For property managers new to the New York real estate scene, it may seem as if there is no end to the quirky contours of the NYC rental market. Making sure that you have all the right information, the most powerful tools—and the time-tested guidance of a trusted advisor to help you wield them—can help keep your leases compliant and your rent rolls full.