By Sabina Mollot
Last fall, the Tenants Association urged caution when CWCapital offered a deal to residents who’d accept a reduction in their MCI charges in exchange for agreeing not to challenge the recently imposed rent increases.
Now, the TA is again warning tenants to think twice before agreeing to another deal offered by the special servicer.
This time, it’s saying yes to an early lease renewal, in exchange for CW’s promise not to raise rents for a period of either 12 or 24 months. However, there’s a catch, warned the TA in an email to neighbors on Monday.
“Management will not show tenants the leases they will be signing, and are giving them little time — from 48 hours to seven days — in which to decide,” the TA said.
So far, the association has heard from about 20 residents with regards to the offer, which was sent to more recent residents paying higher rents. Some are “Roberts” tenants and some aren’t.
“I am not aware of any long-term stabilized tenants who have received such offers,” said Susan Steinberg, chair of the Tenants Association. However, since the association wasn’t aware of exactly how many people had been contacted, she wasn’t sure exactly who’s been targeted.
One thing that was constant was that the residents’ leases would be up for renewal in the fall, but the goal was to get the recipients to sign a new lease this spring.
“In what they claim is a marketing-driven effort, CWCapital/Compass Rock is attempting to match lease expirations with rental patterns in New York City — apartments are most in demand March through September — and is seeking to align fall lease starts in spring,” the TA wrote.
“However, through occupant turnover, the schedule of when leases start drifts into the slower months. If an owner of rent-regulated apartments wants to ‘correct’ the lag, the only recourse under Rent Stabilization Law is to offer to cancel a lease early and renew it at the same rate.”
The TA’s concern is that residents who accept the offer will have to first cancel their current lease before getting the new one and could possibly lose rights currently offered under the Rent Stabilization code. This is something “no sensible tenant feels comfortable” doing, the TA wrote.
In response to the concerns, Brian Moriarty, a spokesperson for CW, said the offer is voluntary and has already proven to be popular among tenants.
“Our residents are accepting this offer in significant numbers,” said Moriarty, though he didn’t have exact figures available.
He added, “We don’t understand why the TA is intent on creating an issue with this purely voluntary promotion which benefits tenants. Despite the TA’s claim, they haven’t contacted CWCapital to discuss their concern. If they had, they would know that we started providing letters outlining the offer as well as a link to the lease form to address any concerns.”
Meanwhile, a few residents contacted with the offer have said their deals included a one-time rent credit of $500. However, when discussing the issue on Facebook, it seemed some new lease offers involved a temporary rent freeze while others’ rents would still be raised, though they also got the $500 credit offer.
This comes on the heels of a handful of tenants reporting that they’d gotten credits for their MCIs. One woman said it was done as “a result of the negotiations” between the TA and CWCapital. Those conversations are still ongoing and there have been no announcements or comments from either party.