Heads Up When You Rent an Apartment at a “Discounted” Rate

Photo by PoPville flickr user Lorie Shaull

“Dear PoPville,

I live in an Adams Morgan apartment recently bought and managed by UIP. When I toured the place last summer, I was quoted a rent of ~$2800. When I came to sign the lease, I was told the rent was actually ~$3200 but I’d be given concessions to the tune of ~$400. Being somewhat renter naive and in a hurry, I went ahead and signed the lease.

I was then more than a little embarrassed when someone pointed out at a tenants association meeting that if my base rent had actually been $2800, UIP would only be able to raise it by $98 as the legally allowed yearly increase (1.5% CPI + 2%). So, not only could UIP decide to simply stop giving me the concessions, effectively raising my rent by $400 a month, they *could* raise it another $112 ($3200 x 3.5%). My monthly payment could go from $2800 to $3312. Even if they don’t raise it that much, they can still raise it beyond the 3.5% simply by offering me less in concessions. Of course, I’ll move out before I’ll pay that much.

I felt a little less embarrassed when I discovered that several of my fellow tenants were in the same boat. I see people coming in all the time to look at vacant apartments and I want to warn them. To all those looking to rent in DC, please be aware of the ramifications of rent concessions!”

37 Comment

  • west_egg

    Yup — that’s how they get you in the door, though I can’t say I’m familiar with the “concessions” angle. Usually it’s one or two months’ free rent spread out over the year, which gets you in at a lower rate but preserves the higher base rate from which they can calculate increases. I suppose they’ve calculated that enough people will, when faced with the prospect of packing up and moving after only a year, suck it up and pay the higher rent.
    Perhaps there’s hope, OP — if they’re offering similar incentives when your renewal comes up you might be able to negotiate with them. Doesn’t always work but it might be worth a try!

  • I used to live in the Argonne, which is probably the building you’re talking about (or if not, they do the exact same thing there, and it’s also a UIP building as of 2013), and I was nervous about that too when I moved in. If it makes you feel any better, I don’t know anyone who still lives there either pre or post UIP that has had their rent raised more than the typical 1-2%. Even though they CAN technically raise it more, they would have a massive flood of people moving out if they suddenly started trying to raise rent by 20% every year.

    • I would make a plug for Keener Management. They are awesome. Have lived in one of their buildings for 10 years and they’ve always taken great care of everything.

  • Emmaleigh504

    Find a Bernstein building. They are an awesome apartment management company. My building is getting a roof deck this summer!

    • Definitely agree. I’ve been in a Bernstein building for five years. They are excellent.

      • Emmaleigh504

        I know people in Bernstein buildings all over town! I’ve been in mine for 7 ish years. I adore it.

        • I’m definitely going to look into this when I move this summer. (Although I have to admit I was a little disappointed, they’re managing a new complex very close to my current apartment in Glover Park and the rents are really through the roof for the neighborhood. I get that it’s new, but who wants to pay $2000 a month for a studio-ish apartment with no metro access?)

          • Are you staying in Glover Park? The Park Crest apartments are nice and managed by Bernstein, and some of them are renovated with new kitchens. A bit of a walk to the Wisconsin Ave and the buses, but the apartments are big and most have leafy views of the park.

          • Emmaleigh504

            Their online search thingy seems to be off today. I did a search for any place under $2000 in all of DC and my building didn’t show up and it should and we have vacancies! I’d encourage you to call or visit any builiding in the area you want.

          • Pixie, I am and I have been thinking about walking by Park Crest to see how I would like living back by the park. I’ve been spoiled because I’ve been living right on Wisconsin. And Emilie, I noticed that too! I was thinking “they have to have more apartments than this!” Maybe I will call them one of these days and ask.

    • This would be a GREAT topic for a future post – apartment buildings / management companies people have liked. It’s hard to tell when apartment ratings on various websites are legit, so I would find this really super helpful.

      • Seconded. In the meanwhile, anyone thinking about renting from UIP should take a gander at their Yelp page. So many reviews start out with, “If I could leave zero stars, I would…”

      • I lived in the Onyx on First for a year and absolutely loved it, but it was expensive. I was really sad to leave and it’s the best apartment and management I have ever had.

        • I toured this building last year when looking at apartments and loved it. That roof top!! I was sad they didn’t have anything available for the dates I needed. Probably for the best though, because those rents were at the top of our budget.

          • The roof top was amazing!! We had our engagement party up there. They also had monthly parties in the lobby/club room during the colder months and up on the roof during warmer ones. They provided GOOD beer, plenty of food–sometimes enough for dinner. It was really great!

  • That is exactly the point of concessions. It’s just like giving you a discount for the first year of your cable TV subscription. They’re trying to get you in the door.

  • Yeah this is exactly why I will never rent somewhere that offers “3 months free rent!” or “discounted rent for your first year!” – it always goes WAY up the next year and you have to move.

  • This is only the case if you are in a rent controlled building (i.e. > 4 units, older than ~1975). Otherwise they can raise the rent on you whatever amount they would like. However, the real kicker is that at the end of your first year they will put you in a bind where you can either go monthly at the higher “real” rate or sign another year lease with the concession. This sucks for anyone who needs an additional couple months. Personally I think that the city would be better off there was a law that prevented this concession scheme and that what you pay is your “real” rent.

  • This is a common practice around here. My building does this now, and there is a huge turnover rate. Very few people stick around for more than a year.

  • Aglets

    Your rent is 2800 a month? that’s what I take home a month
    God, I need to get out of this city.

  • anonymouse_dianne

    You should be able to negotiate down with management. This is a ruse on their part because there is no legal limit. Park Place advertised one month free rent, then at the end of the year they wanted to raise it a ridiculous amount. They even tacked on an “amenity fee”!! My understanding is that “amenities” are the nice things that come along with living in the building, not something you pay for above and beyond rent. That said, I quickly got in touch with my realtor and found a condo at 14th and U that I like even better and costs me less. Plus I get a chunk of change back on my income taxes with deducting interest.

  • UIP stinks. They stink in every aspect.

  • The building I used to live in uses this as a tactic to get you to sign onto a second/third year rather than going month-to-month. When my lease was up for renewal, it was either raising the rent $200 (3br) for a year extension or over $1000 more for month-to-month.

    Rent control loophole.

    • Rent control does not apply to most rentals in DC because the exemtions are pretty broad. This is more of a prevention of month-to-month renting as you noted.

      • You’re probably correct, but I know that the building I was in was definitely not exempt from rent control. We were paying just over 3,000 and they wanted ~4,300 for month-to-month or ~3,200 to continue with another full year lease. The original ~$900 monthly “concession” is what allowed them to do this. No one in their right mind would have paid over 4k for the apartment we were in.

  • I’m not even saying I agree with having these laws, but if you have decided that you need these laws to protect renters, then it is dumb to let landlords circumvent them with an obvious workaround. Rewrite the laws so they do what they intended to do. One may argue that the renters enter a contact knowing what they’re getting into, but for a lot of people renting, that may be the only contract they enter into all year and don’t really know what they’re doing. Everyone needs a place to live, so I think it’s somewhat of a duty to protect the people who may easily be taken advantage of.

  • I don’t think anyone has mentioned this yet, but from the perspective of the rental company, the purpose is not so much to extract higher future rent from existing tenants, but to be able to easily drive tenants out by higher costs at a moments’ notice to be able to take advantage of surges in market rents, since new tenants are not subject to rent control increase restrictions at all.

    • THANK YOU. I live in a UIP building in Adams Morgan, probably the same as the OP. While I think the concessions thing is shady and makes me uncomfortable, they renewed my lease after the first year with the same concessions and a rent increase of just CPI + 1%. The concession has been around for a while because I took over the lease from a previous tenant, and if they threatened to take the concession away from me now the unit would be HORRIBLY overpriced and would never rent (it’s a UIP building so goes without saying it’s rundown and undesirable). However, if there was a major tightening of the rental market, they have retained the option to jack up the rent. It’s not a great system, but rent control seems really restrictive too.

  • niceflipflop

    My girlfriend fell for this at the Biltmore, another UIP building. I’m convinced it’s a way to maximize turnover. Look at this way…. If you have a unit that is underpriced (rent control is keeping the rent lower than the market value) and you list it at the max rate you’re allowed to charge for it, you’re going to attract, well, people who can afford to pay that amount, as well as the yearly allowable increase. If, however, you list the unit at the lower rate by offering a rent concession (yes, UIP advertised her unit at the “concession” price, not the actual price…which may or may not be legal), then you attract people who can afford just that amount. So now you’ve got a tenant who is probably paying at the upper end of their range. And they’re thinking, “Oh sure, my rent might get jacked up to the real rate down the road…but I’ll be a millionaire by then.” And then you remove the concession (because of course you do), the tenant realizes they can’t afford it after all, and they move out. Bam, turnover. UIP can now charge that much more. UIP is the worst. They are dirty as hell.

  • Standard practice in cities with crazy rental markets. Happens all the time in places like DC, NYC, SF etc…

    And unfortunately, threatening to leave the next year is usually a pretty toothless threat because these places always have a line out the door waiting to rent from them, AND they get to charge more “move in fees” etc. Many midsize rental buildings in DC make thousands a month, just on the new tenant move in fee.

  • Talk to a LL-T lawyer. I don’t know how it works under DC law, but I came across this arrangement in SF, where it is common. My LL tried to take away the discount (rebate) on my rent-controlled apartment one year, which would had the effect of being a much greater increase than the law allowed, if my discounted rent were treated as the base line. In SF, the courts are clear that the actual rent for the purposes of your rent control protection is what you actually pay–i.e., post discount rent–not what the LL says you pay (pre-discount rent). Otherwise, a simple rebate trick would allow every landlord to evade the rent control laws. But every jurisdiction is subject to different laws, so check your local listings.

  • I ran into problems with the rent “concessions” when I wanted to go month-to-month after a year lease in a rent controlled Equity apartment. I was told that the “legal rent” for a 1-bedroom apartment was well over $3,000, but that they were giving me a “concession” to bring it down to the rent down the market-supported level around $2,100. As they were giving me the concession off the legal rent, they could/would charge the “legal rent” if I went month-to-month. So I’ve had to sign additional year leases, but they only raised my rent about $60 each year.

    For a while, I really wanted to go month-to-month as I was unsure whether I would be here for much longer. I did a lot of research on this loophole. I found the following, which could be helpful, but I didn’t pursue it any further.

    Residential landlord was not precluded from conditioning rent discount on month-to-month tenant’s execution of new 12-month lease agreement, absent finding of large disparity between discounted rent and rent charged as month-to-month so that tenant was effectively coerced into abandoning month-to-month tenancy that he was otherwise entitled to maintain. Double H Hous. Corp. v. David, 947 A.2d 38, 2008 D.C. App. LEXIS 96 (2008).

    Not sure how much would be coercive, but maybe there has been further development on it in the last few years.

  • I, too, came across this when looking at an Equity apartment (base rent around $3,000 for studio in Dupont Circle, around $2,000 after concession). Only the concession price was mentioned in the ad, and the rental agent didn’t mention base rent when I asked about rent control – I only found out when I went through the actual lease agreement (at which point I backed out of the lease).
    I believe the way Equity has been running it is to increase the base rent each year by the maximum allowable amount, even where that would exceed market rent, and then use a concession to get back down to market rent – so as to preserve for themselves the ability to jack the rent up more (by reducing the concession) in years where the rental market is hot and market rents increase more than the rent control amount.
    I have found Keener Management to be much more honest in dealing with rent control. This past year, when market rents increased less than the maximum permissible amount under rent control, they in fact increased the base rent only by the lesser amount, thereby protecting me in future years.

  • UIP did this to us too, except they never let us know that the rent was discounted or we were receiving concessions until we were literally sitting in their offices at 1841 Columbia Road physically signing the lease. They’re terrible for these shady tactics and countless others. We left the building when the City and UIP informed us our rent could go up ~$700 a month (we received a $650/month concession) at the end of our lease. We decided to leave then, which was perfect considering the building was then without working water for days at a time this past winter.

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