Rents are dropping in my building. Can I negotiate a lower rent?
If you're in a neighborhood with a high vacancy rate, your landlord may be more willing to negotiate at renewal time.
I rented an apartment just before the coronavirus outbreak at a typical market rate. But since the lockdown, similar units in my building are being rented for $300 to $500 less per month. How do I negotiate a lower rent?
Your landlord may be willing to negotiate with you depending on the state of the rental market when it comes time to renew your lease, our experts say, but not during the term of the lease.
"A lease is a contract, and people enter into contracts all the time and then subsequently, market conditions change," says Sam Himmelstein, a lawyer who represents residential and commercial tenants and tenant associations (and FYI, a Brick sponsor). "If every time the market changed, people could change the terms of contracts, there would never be any certainty."
For now, you're locked into your current rent for the remainder of your lease, and the landlord has no incentive to negotiate with you. And if you decide to move out early, Himmelstein notes, your landlord could sue you for breach of the lease.
If you need a break on the rent because you've lost work due to the coronavirus, you could try approaching your landlord now.
"If you're experiencing financial hardship and see rents offered that are meaningfully less than what you committed to, you could go and try to make a case to your landlord," says Andrew Sacks, a broker with Corcoran. "It would be purely a gesture of goodwill on the landlord's side—you don't have much claim given that you signed a contract."
When it's time to renew your lease, you'll have the opportunity to negotiate. There are no laws that govern how much a landlord can charge when renewing the lease on market-rate apartments (with rent-stabilized units, it's a very different story), so your chances at success will depend on market conditions.
"Once your lease is up, it's certainly within your rights to bring comps to your landlord, and ask them what they can do," Sacks says. "But it varies case by case. If you have a unique apartment in a building with very little vacancy, the landlord can afford to say that they'll find someone willing to pay market rent if you're not."
On the other hand, the vacancy rate in Manhattan reached a 14-year high last month, with new leases down by 23 percent compared to July 2019. If this trend continues into 2021, your landlord may be more amenable to negotiating with you.
"Some landlords will feel that if they have a tenant in place with a good track record, who pays the rent on time and doesn't cause any disturbances, they'd rather negotiate a reduced rent than put the apartment on the market and have a vacancy for 12 weeks," Sacks says.
Your best bet, then, may be to wait it out, keep a close eye on the market, and be prepared to negotiate in March—and do what you can to remain in good standing as a tenant until then.
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