Hi, my approximately 300-apartment building has been undergoing condo conversion. Half the apartments were deregulated. There are now more than enough bonafide buyers for the plan to be approved by AG. Extensive renovations throughout, not just to apartments but common areas, make me think sponsor will be here another year although they planned to be out by December but that's just impossible.
Tenants Association hired a condo-conversion lawyer who negotiated terms he felt were good (insider discounts and protection against further "MCI's for a # of years for rent regulated tenants).
Buyout offers were pathetic probably for various reasons--that was not a strong interest of most rent regulated tenants, and also, there were some tenants who would soon be deregulated because of luxury deregulation laws, and so, it behooved the sponsor to offer low #'s in a building-wide initial offer. A few are taking the buyouts.
"If I want to negotiate a buyout on my own at some point, when is that legal and not considered a discriminatory inducement by the AG? Do I have to negotiate down the line with whoever ends up 'buying' my apartment (ie the sponsor, or a block of investors to whom my and other apartments may be sold). I am in a good position as relatively 'young' and with a nice sized apartment, and could live out my whole life here as I am unlikely to earn the vaunted $175K two years in a row. My rent is under 2K now but obviously eventually would go over 2K. Even so I am a total loss of income to the landlord in perpetuity.
Also, I saw elsewhere on this forum that buyouts are capital gains, but in googling I found a NY Times article that indicated that relinquishing a lease is indeed considered equivalent to capital gains. I'll cite the URL here in a moment, but wanted to ask, if I use the buyout as a down payment on a house/apartment somewhere else, then up to 250K will I be tax free? That would make a big difference to me even considering this. And I know the sponsor/landlord well enough to know they will play tough for a while.
Here is the relevant line (to me) from the NY Times article:
From a tax standpoint, a buyout is considered by the Internal Revenue Service to be a capital gain. Marvin Brockman, a tax lawyer and accountant in Manhattan, said a lease is considered a capital asset and thus its surrender is the sale of that asset."
Right now there are still gut renovations going on. Down the line, in terms of a buyout, they have to, I think, renovate including wiring and piping and so on so its not simply cosmetic (cosmetically my apartment is in good condition anyway).
THANX IN ADVANCE!!!!
Here is the NY Times article: