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New Owners of Rent Stabilized building

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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New Owners of Rent Stabilized building

Postby brooklynstabilized » Fri Nov 13, 2020 12:59 am

Good Evening,

So our awful Landlords finally sold our apartment building. A management company is representing the owner. They reached out to us about a potential buyout. We informed them our priority is to stay in our current apartment, but we're open to negotiation if it benefits us. They said they couldn't meet the number we were looking for to leave out right which i figured. They mentioned moving to another apartment in the building or moving to a similar apartment in the neighborhood for the same price and same rent stabilized protections. Should I trust them to actually leave the building and go to another building? Obviously I told them everything would have to be in writing and i would have a lawyer review any offer. They also said they wanted to gut every apartment in the building even the newer apartments. This tells me they're looking to possibly make these condos. Don't they have to offer us the opportunity to purchase our apartment at a below market rate if they do this? Please advise. Thanks so much.
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Re: New Owners of Rent Stabilized building

Postby TenantNet » Fri Nov 13, 2020 5:48 am

I assume you mean the management company for the new owner. Find out everything you can about both the new owner and management company.

Buyouts can be treacherous and tenants often don't get the better deal. This is especially if you are RS - where else will you find a RS unit at a decent rent?

If negotiations get serious, consider contacting a tenant attorney a) for advice, and b) to represent you. If you do, make sure it's a real tenant attorney who has plenty of experience with buyouts, not just some person down the block who just got out of law school or his main clients are slip & fall, or immigration.

Also understand that an attorney will take a percentage of any buyout. I've seen up to 1/3. And the IRS will take a chunk of it as well. So that might not leave a lot.

Then with what's left, consider how much it will cost for a new place, and for the cost of moving. It all adds up.

Find out why they want you to leave? Do they want to reconfigure the building, drive out other tenants? Have other tenants also received offers? Compare them. If things are fishy, consider forming a tenant association. As you say, this might be a building-wide issue, so all the tenants should unite on this.

Do they own buildings elsewhere in the area? If so, visit them and see how they are maintained. Talk to tenants in those buildings and see if the LL is harassing and litigious. New places can bring things that are unexpected and unwelcome, so see any new place in the day and later, at night. Find out if a new place is already stabilized, or there are mechanisms where RS coverage can be transferred to new units in a building, but I don't know if they can be transferred to a new building. That is why you probably need an attorney.

In this economic climate converting to condos doesn't make a lot of sense.

Not sure about condos, but for co-ops there are rules. They have to have a prospectus (often called the Black Book) and yes, tenants are supposed to be offered an insider's price. But that is for a non-eviction plan where (I think) 15% of the tenants must agree. An eviction plan would require 50% of tenants to sign on. We're not experts in co-op/condo, but that's another reason to consult an attorney, and not just after the LL draws up an agreement, sooner the better. Also, co-ops (and probably condos) have to be approved by the NYS Attorney General.

Start sniffing around with your electeds, your local community board, check DOB and other agencies to see what might be going on. They might have filed applications already. Also check the real estate papers and web sites. See what's going on in the neighborhood. Are there any large projects coming to your area (i.e., Barclays Arena). Big things create displacement. And there are area-wide tenant groups that might know the landscape or your new landlord. Some of these activist groups are very much on top of things. (OTOH some are part of the problem, so learn to be cautious.)
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