Making a Lease Renewal Offer When a Rent Reduction Order Is in Effect

How do you calculate the rent increase for a renewal lease on an apartment where a DHCR order cutting the rent for reduced services is in effect on Sept. 30, 2025? 

For lease renewals after Sept. 30, base the renewal increase under RGBO #57 on what the tenant’s rent was before the DHCR-ordered rent cut. That’s because a rent cut for a reduced service is temporary. When you fix the problem, you can apply to the DHCR to restore the rent. But don’t collect the guidelines increase until after the DHCR restores the rent.

For example, suppose a tenant was paying $1,300 per month when a $200 service-related reduction took effect. Should that tenant sign a two-year renewal starting Jan. 1, 2026, the allowable increase is 4.5 percent of $1,300, even though the tenant will continue to pay the reduced figure until the DHCR issues a restoration order. If you use our Rent Computation Form for Renewal Leases, you would enter $1,300—not $1,100—on line 1 (rent charged for apartment on Sept. 30, 2025). But remember: You may collect the guidelines increase only after you get a rent restoration order.

For the Rent Computation Form, and an explanation of how to fill it out in this situation, see our August feature, “RGB Approves Rent Increases for 2025–26 Lease Renewals,” available to premium subscribers here.