Preferential Rent - Current HCR Rule and Recordkeeping
Current Rule
A preferential rent is lower than the legal regulated rent the owner could otherwise lawfully collect. HCR states that a tenant paying a preferential rent on or after June 14, 2019 retains that preferential rent for the life of the tenancy. The owner may apply lawful increases to the preferential rent during the tenancy but may not reset collection to the higher legal regulated rent at renewal. HCR states that the owner may charge the higher preserved legal regulated rent only after the tenant permanently vacates, subject to all other applicable rules.
The legal regulated rent must be stated in the vacancy lease and later renewal leases to preserve it. Keep both rents and each lawful increase clear in the lease, HCR rider/addendum, and registration record.
Operating Procedure
- Confirm the lawful legal regulated rent from the supported rent history.
- State both the legal regulated rent and preferential rent on the current forms.
- Apply the current lawful increase to the collectible preferential rent during the same tenancy.
- Do not use a late-payment or payment-method clause to terminate the discount; HCR says those clauses cannot be enforced to end a preferential rent.
- Preserve the full rent history before setting a post-vacancy rent.
Verified Source
Fetched and read August 7, 2026:
Work With Botway
Botway may display both rent fields and the source documents. It does not independently establish the legal regulated rent.
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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