I live in Cobble Hill in Brooklyn and our building is going through non-eviction
condo conversion. Can the landlord or sponsor raise our rent for major capital
improvements even if the building converts, or does the sponsor pay the share
of maintenance costs for the tenants that prefer to stay in their rent
—Concerned in Cobble Hill
“Your reader asks an interesting question,” says New York-based attorney Michelle Freudenberger, “but the answer depends on whether or not the offering plan has been declared
effective. If the offering plan for the conversion has been declared effective,
a rent increase for a major capital improvement performed by the sponsor may
not be granted by the DHCR and such improvement must be paid for out of the
cash reserve fund set up by the condominium association. The is found in 9 NYCRR section 2522.4(a) (9).
“However, the same section provides that that if such improvements are paid out
of the reserve fund and returned to it by the sponsor (or by the owners through an assessment)prior to the issuance of an order
granting the rentincrease, the increase may be based on the total improvements.
“Therefore, in limited circumstances, the sponsor may obtain an increase on the
rent for the rent-stabilizedunits it owns. The sponsor will continue to pay the common charges and real
estate taxes on these units until they sell the unit to a third party.”