Me and my partner moved into new apartment in an apartment building (in New Jersey) on Friday, July 11th. The building has multiple units and the landlord is a managing company that manages many apartments in the area.

During our viewing on July 6^th, the Realtor stated the rent as $1550 per month, but said this would be reduced to $1525 if we moved in before July 15^th, which we did. We filled in the required application (credit and background check).

The application was approved and on Monday, July 7^th and we paid the security deposit of 1.5 months rent (1.5*$1525), 1^st months rent and Realtor fee. The Realtor promised to forward the actual lease for our review after the payment, especially because he said these documents would have to be completed asap, since we were meant to pick up the key by Friday that week.

But the lease was emailed very last minute on Wednesday, July 9^th with a verbal request to read and sign asap. To our shock and surprise, the lease stated the rent as $2300 p/m. A separate document quoted a discount of $775 (back to expected $1525), quote “3. Rent. You will rent this property for $2,300 per month, with a $775.00 monthly discount. Your rent of $1,525 is payable in advance on the first day of each month. This discount is only good for the duration of this Lease.”

We interrogated the contact person at the managing agency about this, telling her that this basically means that they could raise the rent to $2300 next year. We asked her to change lease to $1525. She refused & stated that that was standard practice and she would show us other contract like this when we come to her office. We wanted her to put in writing that they will not raise the rent by $775 or more if we want to renew in 1 year. She did not want to do this either and after some discussion agreed to stated that if we renew “the rent will not be raised by more than $100 from what you currently pay”.

Mind you, because of the back and forth this was 1 day (!) before we were meant to move in, so of course there was no way back because we already cancelled our old apartment, bought furniture etc. So we signed.

• Is this legal? Is this usual?
• Is this fraud?
• Can we in any way make sure that our rent won’t be raised by more than the legally allowed %age out of our current rent?

We asked a neighbor whether they had a similar lease (high rent with high discount), but they did not.
The lease does have a loophole: whilst the rent is stated as $2300, the security deposit is stated as being 1.5 months of rent and being $2287.50 (which is 1.5 times $1525). Is the landlord allowed to raise the rent next year by more than 4% out of $1525? Or do we have bad luck and shouldn't have signed?

If this is a year lease, they may change the amount next year, anyway, So if you want to stay longer than one year, ask for a two or three year lease.

I don't see anything illegal about it. Though I have no clue how standard it is. But you got what was promised a lease for $1525. This certainly could be a way to get around any limits on raising the rental.

I would consult a local Real Estate attorney to see how usual it is.

BTW, the managing company is not your landlord, the owner of the building is the landlord, the managing company just manages the property for them.

Thanks for the answers so far.

Does anyone know if this kind of contract is common? As I said no one else in our building complex has a contract like that.

We are chasing a copy of our contract since almost 3 weeks and they still have not managed to sent us one, I suspect that they might try to hide/combine something?

I've heard of contracts that offer a discount from "retail" rates rather than change the retail rate so its not unusual, but is uncommon.

Is this because of tax and/or insurance reasons?

It might be, but I think its more to not devalue the property.