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Landlords initially renting up new RPTL 421-a buildings routinely give incoming rent-stabilized tenants rent concessions to account for the fact that construction may be ongoing, and that there may still be punch list items in the apartments. This seemingly innocuous practice, however, has led to class-action litigation wherein tenants allege that rent concessions are part of a fraudulent scheme that results in massive building-wide overcharges under the Rent Stabilization Law.
We begin with Rent Stabilization Code §2521.1(g), which sets the initial stabilized rents for apartments in 421-a buildings:
"The initial legal regulated rent for a housing accommodation constructed pursuant to section 421-a of the Real Property Tax Law shall be the initial adjusted monthly rent charged and paid…."
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