A landlord buyout may sound like a dream come true to many renters, but in NYC it’s not unusual for landlords to be met with a resounding “No” when they make a buyout offer. The reasons why tenants decline buyouts are as varied as the tenants themselves, but in almost all cases their reasoning comes down to money.
Why Tenants reject buyout offers
Tenants who are presented with a buyout offer must make a decision: To move or not to move? Most often the tenant is protected from eviction and rent increases by NYC’s rent-stabilization and rent control laws. That means they cannot be evicted without cause or have their rent raised beyond a certain amount each year. This is a very attractive position for a renter to be in and gives the tenant the luxury of having time to make a decision on the buyout offer.
Tenants usually reject offers for one of two reasons:
- The offer is not high enough to cover their relocation costs, or
- The tenant does not want to move for various reasons.
Another reason tenants may refuse an initial buyout offer is that they hope that by holding out down this offer, the landlord will come back to them with a better offer for more money.
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. Just call (212) 267-2500 for assistance with your buyout.
Tenants have a lot to lose by giving up their rent-regulated unit. Not only are they losing their home, they are losing a protected rental rate that is likely well below market rates. They may also be losing a home that is convenient to work, friends, or family and might find themselves priced out of their neighborhood once they accept a buyout offer.
Tenants should take their time evaluating any offer and exploring their options before simply accepting a buyout offer.
What Tenants have to gain or lose by saying “no”
Tenants who holdout many times do so with the hope of getting a higher offer. Holding-out may just be a ploy to get more money, but it can also be a practical decision. For a tenant to move he or she may need a certain amount of money. From a purely financial standpoint, a buyout offer must be high enough to, at the very least, cover moving costs. But ideally, a good offer will be high enough to cover these costs, the deposit on a new unit and possibly to cover the increased rental costs of the new unit for the foreseeable future. The offer might even have to be high enough for the tenant to relocate out of the city, to buy, or to put the down payment on a home.
For tenants whose landlords are serious about getting tenants out, tenants can benefit significantly by refusing the initial offer. Eventually, the landlord may become impatient and increase the offer, making it worthwhile for the tenant. This is especially true if the location is in high demand or undergoing significant redevelopment. Other factors are how many tenants are in the building, or if the landlord is in talks with a developer to redevelop the property. When a landlord has significant incentives to remove tenants the potential windfall for the tenant can be significant.
However, tenants need to be aware that once they refuse a buyout offer, they may not hear from their landlord for another 6 months. New rent regulations prohibit landlords from making repeated buyout offers within 6 months of one another. So if you want to take a buyout, but want a higher price, you might want to open the doors to negotiation, rather than refusing the offer or you might find yourself waiting half a year to get another offer.
On the other side of the coin are landlords who are not serious about their buyout offers. They may be just testing the waters to see how many tenants would be amenable to a buyout but have no real plans for redevelopment. They may not be able to charge a significantly higher rental rate than they are currently charging, or they may not be able to afford to buy out their tenants.
For these tenants, the initial offer may be the best and only offer they receive, so if the tenants would like to move and could use the buyout money to help them, saying “No” might backfire on them. This is why seeking the advice of experienced tenant attorneys can benefit you when assessing any offer you receive for a unit.
Contact Brasch Legal for buyout assistance
Ultimately, whether or not an offer is accepted comes down to tenant and landlord motivations and capabilities. If you have been presented with a buyout offer and aren’t sure what to do, or want to know if the offer is fair contact the tenant attorneys at Brasch Legal for advice.
We have worked in the field of landlord-tenant law for over 20 years and bring years of experience negotiating a buyout. We have helped many tenants get substantially higher amounts.
To discuss your buyout situation, please call the team at Brasch Legal today at 212-267-2500.