Topic No. 264: Temporary Rent Reduction Agreements

Rent board decisions have consistently held that where a landlord agrees to temporarily reduce a tenant’s rent due to genuine financial hardship specific to the tenant, the landlord may restore the prior base rent at any time after giving written notice to the tenant. Restoration of the prior rent does not affect the tenant’s anniversary date for the purpose of future rent increases. Examples of tenant financial hardship may include a reduction in income, an increase in expenses, or losing a roommate that was contributing towards the rent.

A rent reduction is permanent and cannot be restored if a new agreement is created between the parties at a lower rent due to market conditions. For example, the landlord agrees to reduce the tenant’s rent because a vacant comparable unit is being offered at a lower rent than what the tenant is paying.

If a landlord intends to temporarily reduce a tenant’s rent due to financial hardship unrelated to market conditions, the Rent Board recommends memorializing the agreement in writing with a clear description of the terms of the agreement, including the nature of the tenant’s financial hardship and the duration of the rent reduction (if agreed upon at the time of the reduction).

 

March 2020