NYC’s Rent Freeze Takes Effect, as Lawsuit Sows Confusion

New York City’s rent freeze for stabilized units is set to go into effect Thursday, Oct. 1. 

However, the freeze is currently being challenged in court by a group of affected landlords. What happens to leases in the interim, or if the judge decides against a freeze, is anyone’s guess. 

“It’s really uncharted territory,” said Sherwin Belkin, a landlord-side attorney. “There’s just innumerable ways that this can go.”

After Mayor Zohran Mamdani campaigned on a rent freeze, New York’s Rent Guidelines Board voted to freeze rents in rent-stabilized apartments in June. However the order from the board specifically applies to leases that take effect on or after October 1, 2026. 

The freeze works on a rolling basis. As leases expire, landlords must offer renewals at frozen rent levels. 

So far the judge presiding over the case has declined to halt the freeze or extend last year’s allowable rent increases. 

“I do not currently see authority that this court has to take a rental increase from a previous year adopt it to this year,” Judge Brendan Lantry said at a hearing last week.  

Although attorneys for landlords discussed in court whether the judge might be able to pause requirements that landlords offer lease renewals, attorneys haven’t requested that relief specifically. 

Landlords have already begun delivering renewal offers with frozen rents and tenants have begun signing them. Landlords are required to send out renewal offers at least 90 days before lease expiration. 

Those leases are binding. But if the judge eventually sends the rent freeze decision back to the board, he will likely need to issue guidance about what happens to those leases and whether landlords can break those contracts or even try to claw back rent increases retroactively, Belkin said. 

If the judge decides against the city, the city is likely to appeal, which would add another layer to the complexity. 

“Once the judge rules, if the city files a notice of appeal, that will automatically stay the judge’s order,” Belkin said, who is a founding partner at Belkin Burden Goldman. 

Andrew Wagner, a partner at Herrick’s litigation department who focuses on real estate, said he suspects any allowable rent increase that results from the case will be retroactive. That means tenants would owe additional rent for months they already paid for. 

Depending on how long it takes, that could be a large bill. 

“Is a landlord going to take them to court to collect a few hundred dollars?” Wagner asked. That would be a personal financial decision, he said. 

However the case will likely take several more months to resolve, assuming that the losing party appeals. 

When landlords sued over a previous rent freeze, under Mayor Bill de Blasio, it took about seven months for the judge in that case to come to a decision. That judge sided with the city, sidestepping complex questions about lease renewals. 

This time around, landlords may have a better chance. The judge in this case has already ordered discovery, a rare move in this type of case. In court filings he has laid out several things he has found peculiar about the rent freeze decision. But a decision in favor of landlords will necessarily mean some disorder in the rental market. 

“It is going to be a mess,” Belkin said.

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