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AI James Altucher


How to Negotiate with a Landlord who wants to increase the price of my apartment lease

My landlord is asking for a 50% increase in my rent. However, my contract caps the increase to 10%. He's not budging. After the first negotiation, he went down to 40%. What are the next steps I should take?

    1. The 10% rule

    This is a hard and fast rule in NYC. No landlord can increase your rent more than 10%.Even if you are on a month-to-month lease, they can't increase it more than 10%.

    2. What is the legal basis for this?

    really. But it's a well known fact. It's part of the culture. And landlords who violate this are ostracized by other landlords and often sued by tenants.

    3. So, he wants 50% but you only want 10%.

    How do you get from A to B?You have to take baby steps. You have to start out asking for 30% or 25%. Something reasonable but also something slightly above the 10% cap. You might even offer to pay some of the higher costs yourself (for instance, if he wants to increase your rent $500 and it will cost him $200 extra per month for expenses (e.g. utilities), offer to pay that $200 for a few months until his expenses go up). This way you show good faith and demonstrate that you are willing to compromise but not as much as he is asking for.

    4. Why does he want to increase your rent so much?

    Is it because he has big plans on how to improve the building? Is it because he needs money fast? Is there something wrong with the building that needs immediate repairs? Does he want cash so he can buy another building? Whatever his reasons, these are things you should be aware of before making any decisions about increasing your rent or moving out entirely. If there's nothing wrong with the building then perhaps you have leverage here since moving is not always an option for most people (especially if there's no real reason why). Is this guy someone who might sell his building in a couple years and make a huge profit off of it? Then perhaps now is not the time to move unless there's some real reason why you need/want to move right now. Ask him what his plans are with regard to selling in 2 years and so on (if this seems relevant). Perhaps subtly try to find out what his situation is financially without being too obvious about it (i.e., "I'm sure glad I'm not in your shoes having all these tenants wanting raises").

    5. His side of things

    He may say, "I'm losing money every month". Well, why does he think that? If there's no maintenance issues then perhaps let him know that or ask him if there are any issues with maintenance that needs attention RIGHT NOW before deciding anything about raising rents or moving out altogether (if possible).

    6. Your side of things

    Perhaps give examples of others in similar buildings who have negotiated increases on their leases recently and what their situations were like compared with yours (e.g., "I know Jane down the hall just got an increase last week").

    7. Counter-offer! Always counter-offer! Even after agreeing on something small!

    If you agree on 25% instead of 30%, then immediately counter-offer 20% or 15%. Don't ever let them think they've won by getting an agreement from you even if it was only one step closer towards their ultimate goal ("OK, we'll go up 25% since we've gone down 10%). Make them feel they have worked hard for every inch they get towards their goal ("We went down 10%, we agreed on 25%, now we're going up 20%, etc."). Never let them think they've won until they hand over the check at which point they've definitely won since then it's too late for further negotiation ("OK," says Jane, "we're at 30%" [she thinks she has won]

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