Posted by Mark Smith on March 07, 1999 at 09:02:00:
In Reply to: Re: Mysterious activity posted by Shelley on March 06, 1999 at 13:34:01:
: Thank you, Mark, but just for my own edification, how can a co-op or condo be in name only?
A landlord/sponsor files an offering plan ("red herring") with the Attorney General. There are no reduced prices to encourage insiders (tenants living in the building) to purchase apartments. Instead, the landlord/sponsor sells the minimum 15% of the apartments to outsiders, and the building officially becomes a co-op or condo. But apartments are not sold as they become vacant. They are rented, but not with rent stabilized increases. Because the building is officially a co-op or condo, the landlord/sponsor can rent vacant apartments for what the market will bear, with no possible challenge of the rent to DHCR or anywhere else. A recent court case has held that, when a tenant whose initial market-rent lease expires, the landlord/sponsor must renew it at a reasonable increase. But the tenant will have to go to housing court if the tenant and landlord/sponsor can't agree on what is a reasonable increase. And someone who rents from an investor who purchased a co-op or condo apartment in the building (other than the landlord/sponsor) has no protection at all for reasonable rent increases after the initial market-rent lease expires.
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: : A landlord can't secretly turn a building into a co-op or a condo. There has to be an offering plan filed with the Attorney General, and copies have to be served on the tenants. Before there can be co-op or condo, the Attorney General has to pass on the offering plan. If it is going to be a real co-op or condo, the landlord will generally offer a discounted insider price to the tenants living there.
: : If it is going to a co-op or condo in name only, the landlord will sell the minimum number of apartments to outsiders, with no incentive for insiders to purchase. Then, as apartments become vacant, the landlord can rent them for as much as the market will bear, without making any improvements.
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: : : I am a rent stabilized tenant, and have lived in Manhattan for many years at this address. Lately, I've noticed odd and suspicious activity that leaves me wondering if the landlord is up to something. People, mostly young but seemingly afluent individuals have been witnessed by myself and others, entering the apartments of tenants who are relatively new to this building. Tenants we strongly suspect, but do not know how to prove are planted here by the landlord. These individuals always seem very nervous, especially when they are entering an apartment that is adjacent to an older tenant. These apartments are usually, over the time the newer tenants are installed, problematic for a time in some way or the other.
: : : My mind has been thinking overtime lately, especially after reading these pages. Forgive my rather naive question, but can landlords sell units in a partly rent controlled building without notifying the older tenants? Could our landlord be clandestinely co-oping whatever apartments he controls? If this is a common practice, is it legal? If not, what can be done to stop it, legally or to force his hand and make him come clean? Am I way off base here? Any discussion on this topic would be well appreciated. Thank you, Shelley.
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