Landlord Can Increase Amount of Deposit When Preferential Rent Ends

Tenant paid landlord a preferential rent and had given landlord a security deposit in the amount of the preferential rent. Landlord asked the DHCR if it could increase the required security deposit to the amount of the legal regulated rent if tenant's rent was increased from a preferential rent to the legal regulated rent after the current lease term. In an opinion letter, the DHCR said yes. Landlord is entitled to one month's rent as a security deposit. So if landlord was entitled to collect the legal regulated rent, it was entitled to an increase in the security deposit.

DHCR Opin. Ltr. by Michael B. Rosenblatt (1/6/05) [2-pg. doc.]