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FHEPS effect on the Condo Conversion Buyout.

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

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FHEPS effect on the Condo Conversion Buyout.

Postby chill tenant » Fri Oct 25, 2019 12:03 am

A friend is in the process of applying for FHEPS program, which as I understand will completely cover her rent as it is only $875 and she lives alone with 2 children.

She will also be getting Cash Assistance.

She lives in 128 Unit Building. Last December every one in the building got an offering plan book of conversion which aims to convert the building to a condo.

Cover page of the book states:
THIS IS A NON EVICTION PLAN. NO NON-PURCHASING TENANT WILL BE EVICTED BY REASON OF CONVERSION TO CONDOMINIUM OWNERSHIP.

BECAUSE SPONSOR IS RETAINING THE UNCONDITIONAL RIGHT TO RENT RATHER THAN SELL RESIDENTIAL UNITS, THIS PLAN MAY NOT RESULT IN THE CREATION OF A CONDOMINIUM IN WHICH THE MAJORITY OF THE RESIDENTIAL UNITS ARE OWNED BY OWNER OCCUPANTS OR INVESTORS UNRELATED TO SPONSOR. PURCHASERS FOR THEIR OWN OCCUPANCY MAY NEVER GAIN CONTROL OF THE BOARD UNDER THE TERMSOF THIS PLAN, (SEE SPECIAL RISK SECTION OF THIS PLAN.)

There were 27 empty apartments at the time this offering plan was made. All of these apartments have undergone complete gutting out and extensive renovations. The last 10 are being worked on now.

As I understand, in lieu of the recent law changes it would be extraordinarily difficult for the condo conversion to happen as they need to get 51% of the existing tenants to buy the units, right?

The prices listed in the offering book, are simply astronomical. Every apartment listed has an inside price (only for the tenant, if he were to buy) and outside price (if a person who is not living in the apartment would buy), which is exactly 15% higher.
My friend's large 2 bedroom 1 bath apartment has an inside price of $744,000

She thinks that the price is this high because there is a new building boom going on all around her building and new condos are being sold for this price. Yet her building is really old and doesn't even have a sprinkler system.

She and other tenants were told that the management, who is also the sponsor will most likely be offering to buy people out. Does this scenario still look likely in lieu of the recent law changes?

At least 10 vacant apartments began to be gutted more than a month after the new law changed, and she thinks if the LL thought that it cannot convert it wouldn't have started. Is this line of thinking correct?

Now for the most important question, will the fact that she will be getting FHEPS, affect the LL buyout of her particular apartment? Will the city agency have to be involved as well?
Will she have to pay back for the months that city paid for her?

Thanks
chill tenant
 
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Re: FHEPS effect on the Condo Conversion Buyout.

Postby TenantNet » Fri Oct 25, 2019 1:21 am

For our readers that don't know, for FHEPS, see https://www1.nyc.gov/site/hra/help/fheps.page

FHEPS is a rent supplement for families with children who receive Cash Assistance and have been evicted or are facing eviction, who lost their housing due to a domestic violence situation, or who have lost their housing because of health or safety issues. Formerly known as the Family Eviction Prevention Supplement (FEPS), the program has been expanded to include survivors of domestic violence and their children, as per under Social Services Law Sec. 459-a(1).


Honestly, I know little about how FHEPS works.

As to the condo plan, a non-eviction plan is exactly that. RS tenants can maintain their RS status, but the units would be deregulated when they leave. The LL would be the person or entity that buys the condo.

In situations like this, all tenants should form a tenants association ASAP to scrutinize the plan and seek legal help, if needed. While many condo conversion are legit, some are not. You will need to know what rights tenants (as a group) and individual tenants have here. As for gut rehabs, document what has or is being done. Look at DOB filings, DOF papers, get photos to the extent you can, keep journals of what happens day-by-day.

For a summary of the new law, see http://www.tenant.net/phpBB3/viewtopic.php?f=3&t=13888
and read the PDF (last page).

• The eviction option is eliminated.
• For a non-eviction conversion to be effective, at least 51% of tenants
in residence must agree to purchase.
• Tenants in occupancy have 90-day exclusive right to purchase and
6-month right of first refusal.
• Holders of unsold shares and unsold units may lose ability to seek
MCIs for capital improvements. To qualify for an MCI, building
must be 35% rent regulated.
• Eligible senior citizens or disabled persons who do not purchase may
not be subject to unreasonable rent increases or evicted during their
occupancy except for nonpayment of rent, illegal use or occupancy of
the premises, failure to provide reasonable access, or a similar tenant
breach of obligations to dwelling-unit owner.
• Eligible senior citizens/disabled persons who reside in units subject to
government regulation remain subject thereto.
• Rights granted to eligible senior citizens/disabled persons under the
plan may not be abrogated or reduced.
• Coop plan offeror has 30 days from receipt of the form from occu-
pant claiming to be a senior citizen or disabled to challenge the claim.
Dispute brought before the Attorney General, who has 30 days to
make a determination. The determination is subject to CPLR Art. 78
review if filed within 30 days of Attorney General’s determination.
Absent fraud, this is the sole method to resolve.
• NYC only.
• Effective 6/14/19.


We can't say if the price you mention is high or not, but I presume other tenants are in the same situation. That is where a tenant attorney with condo conversion experience can help.

BTW, sprinklers are not always required, but if not the units should have two means of egress. That is a DOB question.

I don't think FHEPS will impact any of this, but I can't say for certain. But if the tenant is seeking to make the purchase, that might impact her FHEPS eligibility. See what the income and asset requirements are.
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Re: FHEPS effect on the Condo Conversion Buyout.

Postby chill tenant » Wed Nov 06, 2019 5:37 pm

The management sent out a letter recently that they will be changing all the windows in all apartments building wide. They already changed all the windows in the empty apartments.
It is obvious they are doing this in preparation for the condo conversion, but the word is they will try to get the MCI for this in the interim.

Does a tenant have the right not to allow them to come in to her apartment to change the windows?

Primarily her objections to this are:
1) When they are ripping out the frame from the old windows, they are exposing her and her childrent to lead based paint, and possibly other toxic elements that were used when the building was built (1949).
2) The adhesion/calk/silicone they use has volatilie organic compounds that her son is allergic to.
chill tenant
 
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Re: FHEPS effect on the Condo Conversion Buyout.

Postby TenantNet » Wed Nov 06, 2019 6:51 pm

How many units in the building are rent regulated? The new law says that if the building has less than 35% regulated units, they can't get any MCI (see the link above). If there are 128 units, then 45 must be RS/RC in order to get a MCI. And for those that are allowable, there's a cap of a 2% increase per year. So there's less incentive under the new law to do MCI's. Even with the old law, the window replacement must be building-wide.

This is why tenants - as a whole - should organize and speak to a tenant attorney.

As for access, yes, they must give access, but it can be on your terms and can be negotiated. See the access rules in the forum's reference section.

As for lead paint, well that's an entirely different matter. I'm not an expert on that.

You can start here:
https://www.nmic.org/nyccelp.htm

and also here: https://www1.nyc.gov/site/hpd/owners/Le ... Paint.page

As for the caulk they are using, I think it would be reasonable to demand they use a different product, but I can't provide citations on that. Perhaps the NYC Dept. of Health might have information on that?

But also take a look at this:
https://www.americasjobexchange.com/emp ... -workplace

You would be looking for (demanding) a reasonable accommodation that they change the materials they use due to the kid's allergies. I just googled "reasonable accommodation allergies"

Of course it's better if you have a doctor's note to verify this.
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