Buyouts between tenants and landlords in NYC seem to always be in the news. Buyouts are a common tactic of landlords to obtain possession of units in their buildings with the hope of renting them for a higher price or selling them. This is mostly due to the New York City’s rent regulations, which limits rents to make housing more affordable. A buyout is where a landlord pays a tenant – sometimes substantial amounts of money – to vacate their rent-regulated apartment.
Two critical factors that drive buyouts
A rent controlled or rent stabilized apartment provides tenants with certain protections. Two of the most critical protections are:
- Protection against rising rent rates.
- The right of the tenant to renew their lease in perpetuity (meaning the landlord can’t force you out).
The protection against increasing rent rates is the most well-known benefit of NYC’s rent regulation laws. As long as the same tenant remains in the apartment, the landlord cannot raise the rent over a certain percentage every year. How much the rent is and how much it can be raised varies from unit-to-unit based on past rental rates, allowances for improvements, and other factors. Leases are subject to limits and guidelines set by the NYC Rent Guidelines Board and statutes.
The other critical protection provided by NYC rent regulation laws is the right of tenants to renew their leases “in perpetuity.” That means the tenant has the right to stay in the rent controlled or rent stabilized unit for as long as he or she likes as long as they pay their rent and don’t violate other terms of the lease. Tenants with this protection cannot be evicted simply because their lease expired.
Together, these two protections tie the hands of many landlords who would like the opportunity to increase their profits, by raising their rental rates. This is where buyouts come in to play.
BraschLegal has helped dozens of tenants get more money from Landlords in buyouts.
What is a buyout?
A buyout is a one-time cash offering made by the landlord to the tenant to encourage the tenant to give up their lease and move out of the rent controlled or rent stabilized unit. Once the tenant moves out, the landlord can raise rental rates and find a new tenant who is not subject to the same protections regarding rent stabilization and favorable renewal policies.
Are you a candidate for a buyout?
If you live in a rent controlled or rent stabilized unit, you may be a candidate for a buyout, even if your landlord hasn’t said anything about it yet. A lot depends on the area in which you’re renting. If it is being redeveloped or has become a fashionable area to work or live, the landlord may see buying you out as a chance to charge higher rates and might approach you with a buyout offer.
Do you have to take a buyout offer?
If you are presented with a buyout offer, you do not have to take it.
On the flip side, a buyout may be just what you’ve been hoping for. It can provide you with enough cash to start your life elsewhere or meet the deposit requirements of a fabulous new apartment. If you’re interested in a buyout but the offer isn’t high enough to meet your needs, you can always try to negotiate a higher offer.
Legal help is available if you need it
Whether you accept the offer or not, legal advice can be extremely helpful in buyout situations. If you choose not to accept the offer a landlord-tenant attorney can help you protect your rights and report the landlord’s actions to the proper authorities.
If you do accept the offer, you’ll still need an attorney’s advice to help review the buyout terms, supervise the transaction, and ensure the process proceeds smoothly with payment being provided and the premises being vacated.
Contact Brasch Legal for help evaluating a buyout offer
If you have been approached with a buyout offer, contact Brasch Legal. We have worked in the field of landlord-tenant law for over 20 years and bring years of experience negotiating buyout terms. We have helped many tenants get substantially higher amounts in buyouts.
To discuss your buyout situation, please call the team at Brasch Legal today at 212-267-2500.
We represent both tenants and landlords in buyout situations, helping to ensure rights are protected and options are understood.