The Olnick Organization has been increasing tenants' rent prices under the guise of giving them preferential rent, which is not protected under the Rent Guidelines Board's freeze, a lawyer representing multiple tenants said.
The problem is that many of the tenants who are getting the increase never signed preferential leases in the first place, according to lawyer David Hershey-Webb.
“They sent leases out to people with suddenly higher legal rent than the rent that you initially rented your apartment at. They are calling it preferential rent,” he said. “I don’t believe those leases are valid and we’ve made that clear.”
The legal rent rates affect hundreds of units at Lenox Terrace, and has been under question ever since 2010 when Hershey-Webb sued the Olnick Organization for illegally destabilizing units while receiving tax abatements from the city.
In a similar lawsuit between Stuyvesant Town and its tenants, a judge ruled that developers cannot destabilize apartments while receiving J51 tax breaks — which is what Lenox Terrace residents accuse Olnick of doing.
The landlord did not respond to questions about the preferential rent practice.
Following the lawsuit, the Lenox Terrace rents remained stable, until this year, Hershey-Webb said.
“They decided that, ‘Hey we should be able to get a little bit more money on those preferential rents.’” Hershey-Webb said during a tenant association meeting.
Several residents have taken their lease renewals to the tenant association, which in turn hosted a legal forum on their annual membership meeting on Dec. 3.
“I get calls and emails and notes from tenants almost on a daily basis when they are about to renew their lease. Because when they get their new leases ... they are confused,” tenant association president Delsenia Glover said.
Several tenants at the meeting were too scared to criticize Olnick publicly because they have not renewed their lease.
Rent-stabilized tenants who have lived there for decades fear they are being pushed out to make room for market-rate tenants.