SRO designation-disadvantages?

single room occupancy -- as in hotel. don't know answer to your second question.

You cant get a loan on an SRO property. I tried a month or so ago and go absolutely nowhere
Banks require a certificate of non-harassment and in some cases where major remodeling is needed (the shells) some of the banks are even requiring that the plans be approved by NYC before they will give you a loan
It is possible that you can get a "hard money loan"
IN the other harlem thread someone mentioned that peo9ple have bought and renovated SROs w/o changing the designation
I understand that this was possible in the past and is now if you pay cash and do not need a loan

Mimi,

The SRO stuff is a bit out of my realm; I'm better with rent stabilization stuff.

Found this:
http://www.brownstoner.com/renovations/2005/02/the_landmarks_p.html

I believe you need the non Haras Cert in order to obtain a building permit, so, yes, it is valuable. Question is does the seller's non Haras Cert expire?

Suggest you get the block & lot & check out the bld on the DOB BIS web site; you may find more info re: status of the SRO & non Haras Cert:
http://www.nyc.gov/html/dob/html/bis/bis.shtml

I believe it might be hard to get a mtg on an SRO, partic in this economy. If you are really interested, consult a landlord-tenant attorney who knows about SROs.

Interesting info, joedavis.

Not surprised that no one's lending on SROs. Today, it's hard to get a mtg on a multiple dwelling & the terms & rates are harsh & steep.

So it sounds like someone who's willing to pay all cash, for the building and for the renovation, would have super-natural leverage for negotiating in the current market ... right?

Does anyone know if City approvals for renovation plans are any more difficult for an ex-SRO with a Certificate of Nonharrassment than for any similar townhouse renovation? I imagine the DOB's case load is very light these days.

Columbia, not quite like a hotel, more like a hostel lol.

Financing for SRO's is still available,rates are definitely higher than a single family or condo, but I recently obtained a commitment for a client at 6.5% on a 5yr arm.

The certificate of non harassment is key, without it the building is worthless.

I'd buy and convert to a 4 or 5 family and then flip it.

mbrokerNY -- if I understand you correctly you are saying that loans are available for a SRO with a certificate of non-harassment. Yes, I was offered a couple of choices for this configuration, and yes no one will lend on an SRO that does not have one at all. This clarifies my original posting as well.
The current SROs that are advertised through regular brokers w/o the certificate are not discounted relative to the sro's that have the certificate. They are not going to sell

http://www.nyc.gov/html/dob/downloads/pdf/sro1.pdf

See Section C: in most cases, can't get a construction permit unless you 1st get a non haras permit.

Hi mbroker,
Just curious: Re: multiple dwellings, what are rates for fixed? Is there anything longer than 5 yrs? Points? LTV?
Thanks

You guys are helpful beyond belief! For all the hate postings that one can often encounter in SE, the generosity of many of the posters is unprecedented in my internet experience. Thank you all so much!
I gather that if I have cash, SRO with a cert of no harrasment (without an expiration date) may not be such a bad idea.
Alan, a slight change of plans from an earlier mail today, as you can gather form this post. I'll send u another message.

mimi,

if you're serious about this, please consult a landlord-tenant lawyer (who understands SROs) & a DOB expeditor before signing a contract. Buying an SRO can be like buying a loft building: there can be funky little twists which can screw you up down the line. You don't want nasty surprises after you've committed big bucks.

So if you purchase a SRO with certificate of non-harassment, would the SRO designation give you the flexibility to convert to a multiple family building without some type of zoning variance that would be required of a building designated as a one or two family dwelling ? If that's the case, then I could see why an owner would want to keep the SRO designation.

"would the SRO designation give you the flexibility to convert to a multiple family building without some type of zoning variance that would be required of a building designated as a one or two family dwelling ? "

You're kinda mixing apples & oranges. Zoning is not per se the issue, unless it's an SRO in a manufacturing (or non-residential) zone & the SRO pre-dates the zoning designation.

You're right in that the issue is use: converting what is often a Class B dwelling (non-permanent residence) into a Class A dwelling (permanent residence) & then adding/reducing kitchens & baths.

But, no, the SRO designation doesn't give flexibility to convert to a multi family. In order to do almost any renovation to an SRO, you must 1st obtain a Non-Haras certificate. Without the Non-Haras certificate, you can't get a DOB building permit & without a DOB building permit, you can't legally convert to a multi family.

The SRO designation is more of a liability than a benefit.

Thanks dwell. Given you explanation, it appears that the answer to alanhart's question above, "Does anyone know if City approvals for renovation plans are any more difficult for an ex-SRO with a Certificate of Nonharrassment than for any similar townhouse renovation?" is crucial for anyone considering making such a purchase.

You're welcome, HDLC, but I'm no expert. IMO, best to consult lawyer & expeditor before signing a contract.

What does the Non-Haras certificate mean/state? Also, I wonder if there is a tax benefit to remaining SRO?

An interesting multi-family to one-family rowhouse job has been going on at 252 W 75 St for about two years. (Empire State Building went up in less time.) Just a hint of what's entailed is at www.nyc.gov -> Buildings.

Cert of non-haras is provided by city stipulating that previous tenants were not thrown out or harrased.

* by the landlord

I found an interesting SRO with no certificate of non-harassment. It seems that there were either tenants of squatters living there 2 years ago. Everyone has been evicted. I have no idea if in fact there was harassment. There are a bunch of violations. Calling 30yrs and others who can have an opinion. The price is very good and I don't need a loan. I don't need to start renovations immediately either. The big question is if I'll be able to get the certificate or the permit to renovate sooner or later...

Mimi: according to a '97 NYT article, majority of cases take 3-6 months.

in 2009 they take 6 to 18 months and you can be rejected if there was bad stuff done earlier
In this case you have to wait 3 years since no tenants for 3 years = no harassment for the specified duration

However, I wonder if you dont change the C of O and are using your own funds, then can you remodel?
I was told once that you could if you did not change the number of kitchens etc and did not move walls
is that true?

Hi joedavis! I think it is true, you can fix what is there. You can't change anything in the structure. I am afraid about the squatters/ex tenants suing. I guess I do inherit the lawsuit...

My lawyer had a pretty bad bike accident crossing central park and he can't speak with me...and I don't know any other RE lawyer...

I have heard of more than one case where a buyer got pretty badly hit with penalties from forced out tenants YEARS after the fact. I have to confess that I've actually started a couple of times the process of forming a company to track down these type of tenants and work on a contingency fee the same way as these places who you get letters from telling you that you've got money coming to you from teh State of NY in unclaimed funds.

30yrs, that's actually a very good idea. I don't know how big is that market, though. Do you know what kind of databases are available re tenant lawsuits-claims? What is the info we can get from previous violations? Which are the cases that will go under the radar of a lawyer? Thanks for your help!

mimi,
you don't have to inherit the lawsuit(s) or jump through hoops to keep track of the former tenants. Just wait for your lawyer to get better and when he's available ask him to put an indemnification in your contract with the owner. The indemnification would state that the current owner is responsible for any costs you would incur as a result of claims made by former tenants. If you purchase the property and get sued by known or unknown former tenants, the previous owner would be fully responsible.

An indem is only as good as the person doing the indemnifying: I would be in mimi's case, most of the buildings she is looking at the sellers indem is as good as toilet paper.

Can harrassment penalties/claims be insured against, in the way title insurance does? It seems to me that it would be very cheap.

Or for that matter, would umbrella policies (usually for civil suits against the individual) cover it? Rider?

Who are you to comment on the wherewithal of the sellers of the building(s) mimi is considering ? Other than making the seller obtain Cert of Non-Harassment as a condition of the sale, an indemnification is the best protection mimi could receive under the circumstances described. mimi should consult her attorney, however an indemnification from a seller receiving a seven figure purchase payment while providing all sorts of information that would make him/her easy to trace is a hell of a lot better than any other suggestion offered here.

HDLC, I think 30yrs was merely commenting on how indemnification works -- the suing party hasn't agreed to it, so it doesn't stop the litigant from naming all parties in a suit ... I believe (but not a lawyer).

It's a logical conclusion that many 2009/2010 sellers of this sort of house in Harlem hasn't owned the house very long, and likely it's the bank that gets most or all of the seven-figure payment, not the seller.

Anyway, it's also clear that mimi will consult a qualified attorney before proceeding.

alan, the suing party doesn't have to agree to an indemnification. When someone is named as a defendant in a lawsuit for a claim in which s/he is indemnified, all costs for defending the suit are borne by the party providing the indemnification. Therefore, if old tenant sues new owner and previous owner in one suit, and previous owner has provided indemnification to new owner, then previous owner must pay all costs.

...also, there are many long time owners of SRO properties who were trying to evict tenants during the boom years so that they could deliver vacant property at enhanced values to potential new buyers. Therefore, without additional information, I wouldn't assume that this is a highly leveraged owner situation.

Just spoke with a lawyer on the phone...it seems you inherit all liabilities. The thing is to put a price to these liabilities. If you are buying a house saving over 500k over a similar one with the cert of non harassment, could your loss for waiting for a couple of years +violations+lawsuits, paying the tenants, legal costs, etc. be higher than this amount?

HDLC: have you ever heard the phrase "judgment proof"? If you have followed mimi's posts, and/or have much knowledge of what's ACTUALLY going on, the buildings she's looking at are mostly under water (as are most of the buildings on the market in Harlem these days) and would be short sales/foreclosures. How good is that indem going to be?

"there are many long time owners of SRO properties who were trying to evict tenants during the boom years so that they could deliver vacant property at enhanced values to potential new buyers."

Really? Point them out to me or mimi. Or are you just pulling that out of your ass because to the people following the market right now, such properties are largely invisible.

Most of the buildings on the market in Harlem are underwater

Proof?
If true, would like to know how one capitalizes on the situation, and why they are not moving

"you inherit all liabilities" ....in the absence of an agreement to the contrary!!

There is NO WAY I would buy property with potential UNDETERMINED liabilities attached unless I had some type of enforceable contractual protection to mitigate the risk, especially in an area as litigious as New York City real estate.

That's my approach...to each his own.

"Just spoke with a lawyer on the phone...it seems you inherit all liabilities. The thing is to put a price to these liabilities. If you are buying a house saving over 500k over a similar one with the cert of non harassment, could your loss for waiting for a couple of years +violations+lawsuits, paying the tenants, legal costs, etc. be higher than this amount?"

Well, to a large extent it depends on what you are using for your 'cost of capital'. If you buy cash and count your cost of capital as zero, it certainly makes it easier to calculate your way into a good deal. But remember that EACH tenant who was "harassed out" has a potential claim, and not only will that cost you money damages, but you will probably have to wait until the cases get resolved until you can even apply for your permits. In addition, what do you do if you buy the building and the tenants are awarded restitution (i.e. given their units back)? Do you want to own the building then?

Ask your attorney what the outside time frame could be: even according to HDLC, there are all these owners who have been trying to get their certs "during the boom years" but still don't have them. So I guess it means it could take you 5 or 10 years under his logic.

In addition: an indemnification only protects you against monetary awards to former tenants and monetaqry penalties. How are you going to craft an indem against criminal acts? (any harassment which results in injury is a Class E Felony). Guess what? You can't indem against criminal acts. In addition, how are you going to indem against the time it takes to get you cert? A simple indem does nothing for that. Or how are you going to indem against a tenant being awarded restitution (possession) of their unit? Yep, again you can't indem against that.

"Proof?
If true, would like to know how one capitalizes on the situation, and why they are not moving"

I'll let mimi answer this (or you could look at her numerous posts on the subject).

But as to why they aren't moving IT'S BECAUSE THEY ARE UNDER WATER that they aren't moving.

BTW, agents in my office have transacted about 1/2 dozen houses in Harlem this year. Every single one was under water and a short sale.

"Or for that matter, would umbrella policies (usually for civil suits against the individual) cover it? Rider?"

usually such policies have carve outs for lawsuits which the policy holder is already in or has knowledge they might be in. My guess is that an insurance company would say that you knew the potential when you bought the house, so you put yourself into the situation, and unless you got them to sign off on it at some point (which I don't think they would do) I don't think they would cover a lawsuit which they think you put yourself into. Even Director's policies have carve outs for things like "except in relation to matters as to which such director or officer is adjudged to have breached his duty to the corporation, as such duty is defined in Section 717 of the Business Corporation Law".

30yrs, can you paint a picture of what size losses the banks have been willing to swallow to let these deals happen?

6 figures.

30 years, The words that JUMP OUT in this entire thread are mimi's above when she says that two years ago "Everyone has been evicted... There are a bunch of violations." That speaks volumes.

I don't know the full details of mimi's business (and it's presumptuous and arrogant for you think that you do) but I do know that I'm very well aware of the Harlem townhouse market and have been in MANY buildings on the market that are not under water.

Further, most indemnifications are written with no expiration, so let's just say that I would consider strong contractual language in an indemnification a far better strategy than your half-assed tenant track-down start up business idea.

30 yrs, Indemnifications can cover all costs however they are defined by the drafter of the language. Any lawyer worth his fee can draft one that would cover all potential liability to the indemnified party. However, it is clear that you don't understand how an indemnification works and the means by which you can have them enforced.

"I don't know the full details of mimi's business (and it's presumptuous and arrogant for you think that you do) "

How ironic for you to use this phraseology (presumptuous and arrogant) when you don't know that mimi requested to talk to talk to me about her specific needs, especially regarding 2 properties in which she was interested, both of which were under water, and we spoke at some length about her search, what she was looking for, what she had found etc.

As far as the rest of your puerile BS, I'm tired of arguing with idiots on this board about things they know nothing about, so consider our conversation over.

30 yrs-as someone who has been in this business for 30 years (law, development, management, ownership), I gotta say you really know your stuff. Not only the legal stuff, but the practicalities as well. I know a lot of lawyers who think a guaranty from a worthless or shell guarantor is worth something-this is because they're idiots.

HDLC, indemnification in theory covers your costs, but your future buyer doesn't go after the old seller, they go after YOU. You signed the K with them. Indemnification just means you get to go after the party who sold to you but they may be "judgment proof" if they have nothing to pay you with.

mimi, I dont think all SRO conversions to Class A are eligible for J-51 tax benefits. In any case, you should talk to the office in the City that administers J-51 to understand how the program works.
Also, there may be some zonnig districts where conversion is not allowed. You can talk to the Department of City Planning about this.

nyc10023 said: "HDLC, indemnification in theory covers your costs, but your future buyer doesn't go after the old seller, they go after YOU. You signed the K with them. Indemnification just means you get to go after the party who sold to you but they may be "judgment proof" if they have nothing to pay you with."

I believe I made it clear above that the indemnitee seeks relief from the indemnitor. As I mentioned above, an indemnification is to MITIGATE the risk, it doesn't eliminate the risk. You have to examine the wherewithal of the party providing the indemnification. Would I do the deal mimi described with an indemnification from an underwater property owner in Harlem who has no assets ? --no. However, I know of one Harlem property owner looking to sell who has an 8 figure net worth and well-established ties in the financial community. Would I get some comfort with an indemnification from this party ?--yes. Point is that an indemnification is one way to address the problem posed that should be considered depending on the circumstances, and I don't purport to know mimi's circumstances. But I do know ENOUGH not to assume that all Harlem sellers are broke with underwater properties. And anyone who claims to be knowledgeable enough to make such an assertion is full of shit.

Guys, I thank you for your interest in this subject and for your responses!! Oddly enough, the property is not under water, it is actually an estate sale, but the beneficiary lives in other state, and I can't know the state of her finances. I think it's the only house I saw in Harlem without a huge debt. The price went from over 1.3 to 690k (it is not in SE), and I was going to offer less, in cash. It really seems like a deal. The neighborhood has seen the biggest amount of conversions in the city. Now, after reading your posts and talking to the lawyer, I don't know if I can stomach the hellish couple of years this property has ahead of it. I really don't need the headache. On the other hand I can wait (I don't live in NY these days) and have the house sitting there for a while, inhabited by a close friend, until the problem resolves and I can convert. The real, horrendous possibility is the restitution. I am all for laws that prevents harassment, and I think that Harlemites have to be aware of where is the neighborhood coming from, but I also know there are "professional" tenants and squatters who work the system to take advantage of unaware people.

Other factor in SROs: houses have a status with the DOB, other with the Housing Dpt, other with the Dept of taxation (pardon my ignorance, I don't know the proper names) . A house could have been used as an SRO while having a 1 family status, or have a hotel taxation and be used as a 2 unit...This house has 8 units, but it says 5-6 families. If you can "update" the house without the C of Non H, does it mean you have to bring it back to the 6 family code or to the 8 unit that it have been operating?

Dept of taxation = Dept of Finance

I don't see how you could "update" the house legally, because you're not supposed to be able to get ANY building permits w/o the Cert?

I've been told that the owner of an SRO can update what is there, without structural changes. If the place has 5 kitchens, you can renovate them, as long as you don't change the # of kitchens, or the location of the pipes. The idea, I think, is that it will result in better premises for the tenants.

It depends what you mean by "renovate": if you plan on having the stove and sink in the same places they already are, painting the cabinets, perhaps changing the counter top, sure. But you can't move anything around. but I'm not sure exactly what that gets you where you want to be?

The house is in livable condition. If I renovate a couple of floors (the simple way you describe) I can have a nephew live in one floor and have the other as a pied a terre while I wait for the SRO situation to clear up. Then, I renovate and get the CofO. I am not generating income until I renovate. Such an deal will work in case that the wait pays. If I am saving 600k, it might make sense. But then, if restitution happens I'll want to kill myself.

mimi, it is legally permissible for an sro owner to alter the configuration of the legally-sanctioned # of units within its sro status, ie. an sro that has been certified for 10 units may have an architect/contractor submit plans for approval to hpd to convert the 10 units to 5 units. this has no impact to its sro status or tax class, which is tax class 2. the key here is to be certain to file your RPIE annually so dof will not assess its value as though its generating income for 10 units. when the cert of non-h is issued, a conversion from 10 units to 3 condo/coop apartments is possible, as an example. at that time, dof must be notified to change the property from an sro, tax class 2 status (higher taxes) to a tax class 1. also....nyc stopped issuing c of o's to sro in the 40s or 50s. what they did issue, in its place, was a letter to the owner stating that the property in question is not required to have a c of o. the cert of non-h process, assuming no problems getting in touch with former tenants, takes 6 - 8 months. hpd will not accept the app unless it is in good order. their rule is to investigate 3 years prior to the date the app is accepted, if no tenants in that period, they can choose another 3 yr period. i am aware that buyers have successfully gotten addenda written into their contracts stating that the seller remain in contact for assistance, if need be, until the cert of non-h is recd. not often, but it has happened and successfully. i hope this helps and best of luck to you.

Shastinyc, interesting info. Do you work in this field? One of my concerns about the change on the status is the taxation. I had an accepted offer on a house for 2 weeks. It was a 4 unit Cof O. I asked the tax lawyer if I should change it to 3 (I was planning to have a duplex unit +2 floor throughs.) , and also, since I know that 4 units go into a higher tax category, I though it would have lower the tax bill. He told me to not change the status. He said that I would lose the 5% max yearly increase for a 5 year max of 30 %. I wonder if you lose it in every change of occupancy. God, how complex can it get....

What kind of jerk goes out of his way to buy an SRO to take advantage of the poor?
I can't believe any one even responded to the original post.

I guess that it doesn't make any sense to answer this posts, but I will anyway. This is a place that is vacant. The owner died. The person who is selling can't run this SRO, she lives in a far away estate. How am I taking advantage of the poor? I might be their only chance of getting some money from the place, though who knows if they really were harassed. The evicted people, as I say, were squatters. What a jerk this lizmilton is. Good thing constructive conversations prevail here and these SE haters tend to go away eventually.

Mimi is a sweetheart & we love her. I don't see how renovating an old building is taking advantage of the poor. The previous owners may have screwed them mercilessly & thus the potential problem with not having a Certificate of Non-Harassment. My concern here is that Mimi, whom I think is a good soul & is just looking for an affordable home & a reno project in an area she loves, could be stepping into shit up to her ears. BE CAREFUL, MAMA ! !

drdr thanks for your support!!!

Thanks for the additional info mimi. So I see the situation is about exactly as I speculated above in that you have a long time owner (in this case Estate of Deceased Owner) who may have wrongfully evicted tenants during the boom years in order to drive up property value, sell and run off with the money leaving the woes to the new buyer. I guess it's not so inconceivable as some may think.

Sounds like the house can be obtained for a great price. However, quantifying the risk of taking on the property is almost impossible because being dragged into litigation is always far more expensive than people expect. Lawyers' fees, additional costs, lost rental income could all add up real quick and the 600K you thought you were saving can get reduced quite a bit.

I would look at it as a 'peace of mind' issue. If you are going to be living in it even as a pied à terre, a home is supposed to be a place of serenity, not stress. If affordable, paying an extra 200-300K for a house with no additional worries that you have to tend to from afar may be well worth the extra price. Also, I don't know what you're seeing, but I'm observing even more downward movement on Harlem townhouse prices as of late.

If this is a pied-a-terre, Mimi, it might be worth it to pursue the deal. As shasti says (I don't know about conversion from SRO), why not keep it classified as an SRO, why using it however you wish.

mimi, you can't just listen to the negatives. What if Al Qada (sp.?) blows Harlem up? Can you find out anything about the guy who owned the house? Was he a schmuck or a mensch? Maybe he didnt harass anybody. Maybe you can go to contract with a due diligence period allowing you to back out.

"What kind of jerk goes out of his way to buy an SRO to take advantage of the poor?
I can't believe any one even responded to the original post"

"I guess that it doesn't make any sense to answer this posts, but I will anyway. This is a place that is vacant. The owner died. The person who is selling can't run this SRO, she lives in a far away estate. How am I taking advantage of the poor? I might be their only chance of getting some money from the place, though who knows if they really were harassed. The evicted people, as I say, were squatters. What a jerk this lizmilton is. Good thing constructive conversations prevail here and these SE haters tend to go away eventually."

I'm going to play Devil's Advocate here: While in general I 100% agree with mimi, it's one of the reasons NOT to buy a place without a Cert already in place. because if a place has a cert, then you know that what mimi is saying is 100% correct and what lizmiltonct is 100% wrong. But what if there actually WAS harassment? Well, in that case, I can't say that what lizmiltonct is saying is 100%, because in THAT case, you actually Do have someone at least trying to take advantage of the poor, and if they find someone to buy at a higher price than if that harassed tenant was still in place, DID take advantage of teh poor by harassing that tenant out. But if you buy a place w/o a Cert already in place, you don't really know whether or not it's the case.

(and if anyone thinks that I'm a bleeding heart, pro-tenant kind of guy, you are absolutely out of your mind. But I do believe in what a friend of mine describes as "making sure that your side of the stgret is clean").

OTOH, mimi would be "taking advantage of" someone who didn't have the resources to make sure they got market value for an asset (i.e. far away state, little knowledge, not enough resources, etc.), but in NYC I don't think that makes anyone a terrible person; it's how lots of RE deals haven gotten done for a long time. Just like I "take advantage of" banks who look to dump REO because they can't handle what it takes to get prime value for the properties.

I'm sorry that you've gotten offended, but this is simple taking advantage. You can justify it all you want to yourself, but you know full well.

The violations indicate abandonment of property in the last years of the life of the owner, or maybe after she died, so we don't need to speculate on harassment. Decay might have been just a fact of life, or, most likely, lack of it. The house was vacant. Squatters took over. One thing I don't understand... If nobody buys this house...who wins? Will tenants come back and live there happily everafter? Today they sent me pictures. It has parts of roof that collapsed, so there is a lot of water damage. Whose gain is it to have a vacant house gathering vermin and mold? Why is buying an SRO with a certificate that was gotten like all others, which is basically paying the tenants, better than buying this house (which new owner, if the place actually had a story of harassment, will end up paying them anyway?) Is letting the house rot a better moral stand? Gimme a break. I believe in the rights of previous tenants and the necessity of laws like the SRO laws. But I don't believe that buying an SRO without the certificate is taking advantage of anyone.
30yrs, the seller is not a disadvantaged out of towner. She tried to sell the house as is for 1.3. Looks like she knew how to ask top $. She came down gradually to a price that factors the downturn and the risk of it's legal status. lizmiltonct, I can't care less about your opinion, what can I tell u.

mimi - I disagree: the seller asking that kind of money for that kind of house indicates exactly the type of ignorance I would attribute to a disadvantaged out of towner. A greedy disadvantaged out of towner, one that doesn't even know that they should be seeking an expert's help but is probably too greedy to do so, but.... nevertheless.....

And I think this is a perfect example of someone who needs a broker that knows what they are doing, but doesn't feel like paying the commission, and as a result will end up paying a multiple of the commission in lost sales price.

PS I didn't say buying without the cert is taking advantage of someone. What I said was that without the cert, you couldn't KNOW FOR SURE that no one had been taken advantage of.

I'm sure you could care less about any opinion that differs from the delicate balance on which your careful ignorance sits. Any challenge to what you are wrongfully trying to do must be ignored when you are single mindedly looking out for yourself and none else.

30yrs:
I have been aware of this house since the last 2 years when it came on the market. They priced it at 1.1 million with squatters and 1.3 without. At that time, this was the lowest priced house available in that area that was marketed by any of the standard brokers. It was in and out of contract a few times. The roof was intact and the people (white people) who were living (squatting) in it seemed to be using it as a fully functioning abode. According to the realtor, the owner was surprised to learn someone was in there.

I was contacted by the realtor once the squatters were evicted, but given the 200k increase in price and claims that several people were ready to sign the contract, I did not pursue it. The repricing to 700k by a commercial broker reflects market reality better than any other listing I have seen. In fact, I have seen the commercial brokers be much more realistic, efficient and comprehensive with information as to harlem brownstones they list than the residential brokers.

So, in short, much of the discussion on this thread is amusing. I don;t think the type of morality arguments people are offering actually relate to this property. If there is something I can pick up from your last comment and develop a morality argument for, is that the ignorance and greed of some of the brokers who market such properties is likely to become legend as we look back.
The sellers, in many cases, are relative simpletons, who may have been in the property a long time and were cajoled by the brokers to put their property up for sale at the exaggerated prices that a) fueled some of the speculation in Harlem, b) contributed to the exploitation of tenants, and c) is likely to be responsible for a major crash in the end.

Despite all this craziness, the fact that the housing stock and infrastructure have by and large improved in the area is a positive by itself -- other social factors notwithstanding. The people who live there deserve a better quality of life, in the same way that the poor in developing countries w/o access to basic necessities deserve a better quality of life. There continues to be no panacea or magic wand as to how to get there without turning over a lot of rocks in the process. What has been happening in Harlem has bright spots and dark spots, but overall it seems to be positive.
I have talked to many many local people as we looked for housing in the area. The most consistent story is from women and kids -- they talk about how they have stayed in their homes for decades through very tough circumstances, and today they welcome the changes, as life is "more normal". Yes, they talk about the lack of opportunity, and the concern that they may lose their houses as part of gentrification, but the overwhelming note is one that welcomes the change.
There are many discordant notes, and these reflect the poverty, the inability to transition, and the frustrations one expects given the circumstances. But, above all Hope lives in Harlem today.
Perhaps, those that debate the merits of $x million apts in the city and debate all sorts of issues on this site, can periodically take a look at their neighborhoods and dwell a bit in the lives of those they impact. Morality may yet be redefined.
The discussions on SE are interesting from a sociological perspective. This is a relatively narrow segment of society discussing a variety of issues that focus on real estate, and in the process naturally impinge on the larger economics and social factors. Yet, I wonder if the driving thread in the conversations is simply positioning in the local rat race emerging at different levels of sophistication.
Of course, there are many here who simply seek information to make yet another decision in the pathos of life.

Who is she taking advantage of, liz? There's nobody living in that house. You're continuing to throw stones without say why. You're right, mimi; hit the ignore button.

"If there is something I can pick up from your last comment and develop a morality argument for, is that the ignorance and greed of some of the brokers who market such properties is likely to become legend as we look back.
The sellers, in many cases, are relative simpletons, who may have been in the property a long time and were cajoled by the brokers to put their property up for sale at the exaggerated prices that a) fueled some of the speculation in Harlem, b) contributed to the exploitation of tenants, and c) is likely to be responsible for a major crash in the end."

I don't disagree with this except that it takes two to tango: there has to be at least a little greed on the seller's part to dance.

"It was in and out of contract a few times."

Makes you wonder what happened, doesn't it?

"At that time, this was the lowest priced house available in that area that was marketed by any of the standard brokers."

"The repricing to 700k by a commercial broker reflects market reality better than any other listing I have seen. In fact, I have seen the commercial brokers be much more realistic, efficient and comprehensive with information as to harlem brownstones they list than the residential brokers."

a) I think this goes to show the level of total ignorance which was present in the large residential brokerage houses who jumped head first into the Harlem market a few years ago, and unfortunately in the buyer's frenzy, too many buyers listened to very bad advice from brokers who knew nothing of what they were talking about rather than hiring qualified experts up front, and found themselves in deep doodoo.
b)It being the lowest priced building by the 'standard brokers, in this case, probably is just more of an indication that it was NEVER a property which should have been handled by a residential broker with little knowledge of what is really a commercial deal.
c) I think one of the reasons for this is shockingly just a "listing format" issue: residential brokers can list a price and annual taxes and them whatever bullshit description they want: i think this points out the almost total lack of oversight of agents by a lot of the big firms. Commercial brokers have to have set-ups for buildings which contain MUCH more complete information, and as a result are FORCED to look at a lot of stuff that ignorant residential brokers don't even think about. After coming up with a detailed "book" on such properties, it becomes obvious to the commercial brokers what the issues are, and since they are used to selling buildings based on what the financials and book look like, they are less likely than residential brokers to pull a number out of their ass based on wishes and dreams. You see the same thing with these same brokers looking to sell RS/RC occupied unsold shares; they don't have the slightest clue about how to value them, what can and can not be done with them, etc.
d) Multi-unit (even if only 6 units) were ALWAYS sold by commercial brokers. Only in the last 15 years or so where residential brokers at a lot of the big firms think they can sell ANYTHING has this changed. Look, I get listings for properties in France, etc. from NY brokers. Whenever I see them, the first thing that enters my mind is "ok, so these people are totally unrealistic and know no local broker would take their listing, but maybe some NY broker can find me some idiot rich person to grossly overpay". From my experience the percentage of actual sales of such properties is a number approaching zero. I think it is somewhat similar with a lot of these building sales in Harlem, the only difference being that in the frenzy of the last boom, there actually WERE a whole bunch of idiots playing musical chairs who didn't really care if the broker was full of it because the y "knew" they were just going to flip the property and walk away with their windfall gain, so who cared?

PS The fact that "According to the realtor, the owner was surprised to learn someone was in there" is only more proof of my prior assertion that the owner is a "the seller is a disadvantaged out of towner".

30 years can you clear something up for me (because yours is the opinion I accept absolutely in these matters...kind of like the Charlton Heston character of re matters)? Is there not a distinction between possible "harrasement" of rc/rs tenants and squatters? Are not the former paying tentants who have legal right of residency regardless of the whether or not their rent may be artifically and unfairly low? And are not squatters people who come in, pay no rent and essentially "steal" residence in the premises from the owner? While I often am a defender of tenants, and have compassion for the less fortunate, I don't get where squatters should be protected from harassment..seems to me they should consider themselves lucky not to face criminal charges.

"According to the realtor, the owner was surprised to learn someone was in there" is just further proof that realtors LIE !! I've got a bridge to sell anyone who believes that white people just moved on into an old time Harlem family's house and got all comfortable "using it as a fully functioning abode" for any period of time without the owners' (or a family member's) knowledge. Whopper !

lizyank: I'm not sure this will answer your question, but the non-harassment is very strange: it covers a 3 years period where ALL tenants have to sign off that they were not harassed. But if HDFC can't find the tenants from the LAST 3 years, as far as I've been told, they get to go back and pick ANY 3 year period in the past. So you can have a situation where there have been squatters for the past 3 years, so HDFC goes back and finds a "legal" tenant from 2001 who claims harassment and it blows your cert.

Also, "squatters" have had an interesting history (although not lately) in NYC, (as some older folk might relate to you about some goings on on east 13th Street* and other places) which seems to give them much more in terms of imputed rights (i.e. not "legal" rights, but granted de facto by various L&T court rulings).

* www.nhi.org/online/issues/81/squat.html
www.tenant.net/Tengroup/Metcounc/Mar97/squatrs.html
www.citylimits.org/content/articles/viewarticle.cfm?article_id=2800

PS to HDLC: see anybody but white people here? mediafilter.org/MFF/S36/s36.13evix.html
yeah, it's not Harlem, but at that time East 13th St was just about as much "non-white" as Harlem is today.

30 yrs, you can't seem to stay on point.
I'm talking about whether the owner KNEW the white people were "squatters" in the old Harlem family homestead, not whether white folks are CAPABLE of squatting. Everyone knows white people can be squatters. On this Columbus Day Weekend, one can make a very strong that this country was founded by white squatters.

What about an SRO where there is NO interest on the buyers part, to remove the few remaining tenants...
Buyer intends to upgrade 1 unit in the building for the buyer to occupy, as well as upgrade vacant units in building.

[Plaster/Paint Walls...Sand/Replace Floors, install New Appliances, landscape yard...]

How does one go about finding a Lawyer well-versed enough to Contract with/for this type purchase?

Which database can you also plug in the address to get any City Info?

Why would anyone but a slumlord or potential slumlord be buying an SRO?

This is a great thread. I now see why 30years is a legend. I cringe for HLDC when I read the back and forth about the indemnification provision; I can't believe 30years even took the time to try to explain it to him because I've been on the other hand of the table from even other lawyers who don't get it:
Other side: "But we are giving you indemnification clause to cover that risk!"
Me: "Your client does not have any money."
Other side: "So, what does that have to do with anything?"
Me: "We're done here."

HB - I could never be as good a hall monitor as you are. I wish a sociologist would take the time to analyze this site and all of its "trolls." A fascinating phenomenon that I had read about, but never witnessed before. I like Streateasy's response to the phenomenon. Obviously I don't have all the history, but the only threads where I have found you totally off-base in your comments are with respect to Inonada and Apt23. There was one thread I read where your trolling of Apt23 was outright vulgar, and, needless to say, being the moralistic ninny that I am, I was disappointed. Who knows what all the history is and who cares, but in the bulk of the threads I have read, I see a clever little troll in you.

Please indicate where you believe I was vulgar toward apt23 and off-base with respect to inododo.

With respect to Ino, you are off-base when you question the deal he has on his rental. I can vouch for Ino's rental, plus his steering me towards a similar rental prospect. As 300_mercer pointed out in some other thread, deals like Ino's probably don't exist very much at the low end, and I will add that to the extent that they might, many people don't have the time/inclination/skill to analyze all the listings or the flexibility to time move, not to mention the skill to negotiate the deal that Ino has (I think you also doubt Ino's negotiating skills, but I have met him and don't doubt his negotiating skills).

Re apt23 - if you really care, I will go back and find the discussion and send you the link off-line, but I'm not going to without that from you because (1) I don't want to take the time to look for the link unless you really care, and (2) If I find the link, I don't want to draw attention to it, because as I recall, it was vulgar. So, if you really care, you can e-mail me at foolishrenter@hotmail.com. If you do this and I can't find discussion and send you the link, I will retract my comment about your being vulgar to apt23.

Yes, it is a great thread. Too bad 30yrs couldn't bear SE anymore. For someone so persistent in other things, it said a lot.

>With respect to Ino, you are off-base when you question the deal he has on his rental.

I am off base when I question something?

>deals like Ino's probably don't exist very much at the low end,

But he says they do.
And sometimes the stories are too convenient. He just helped a friend a month ago with xyz.. Except if you would search several months earlier, he also just helped a friend a month ago with xyz. It's a recurring story about how he just did something.

I have no doubt one can go and find a good place and a good price. But they aren't just sitting there abundantly for the taking. His process begins with narrowing down a list to 100 rentals that meet someone's criteria and starting there. 100?

>If you do this and I can't find discussion and send you the link, I will retract my comment about your being vulgar to apt23.

Doesn't matter, your statement about me right now has no supporting evidence. You don't get to make up some silly rules that I have to follow in order that I'll believe and others will believe a statement that you made. Doesn't work that way counselor. So step back or follow through with detail.

Does anyone of you have specific experience in taking an SRO through the conversion process to a legal 4 family dwelling?
I'd like to have an idea of time and costs involved...
Contractors, Architects, Brokers, or any others with experience to share, please do....
If preferred, please state an email address or telephone number and I'll contact you directly apart from SE.

THANKS in advance.

LENOXav - No experience here (from me that is).

HB - You win; I could not find the thread. But changing subject back to this thread, I see that I read it too hastily and that HDLC did understand the indemnification issue, and that real disagreement was over whether seller of Mimi's contemplated SRO was likely to have assets sufficient to make indemnification clause of any value. Are there any subsequent threads that tell us how this story ended? Did Mimi finally buy? If so, what did she buy?

>HB - You win; I could not find the thread.

Excuse me, but you could not find what thread?

NYC

History doesn't matter?

HB - Could not find thread where I felt that your comments towards apt23 were vulgar;

CC - History matters, but only history that I know with certainty. I do sometimes read quickly and may have been wrong about HB's being vulgar. I liked that article that you posted about Reddit's troll btw, and it does seem HB is classic troll; he can be vicious at times, but my general impression is that he is not vulgar, and I have found him to be reasonable, even when he has taken aim at me. I don't know what else to say; I understand there are a lot of you on here who don't like each other, and I cannot pretend to understand without all the history you guys have. I mean, it looks like many of you have been at this for YEARS, which is fascinating unto itself. As I have noted before, I like you all regardless of whether you like me and wish you would all get along because I find all of you to have great substance when you are not sniping at each other.

So the thing that matters is that which you know with certainty? Tell me that I have misunderstood because otherwise that seems even more obnoxious that your condescending statement that you have deemed us worthy. This is why I cannot believe you are real.

uh oh NYCNovice, you haven't been Officially Verified by ColumbiaCounty.

CC - I am real; ask AR - she has met me. I don't know why I rub you the wrong way, but I can't do anything about that. AR has told me that you are a sweet man, but I've got to say, you come across as a complete ass, and I have not seen a single real estate comment from you since I have been on the site. At lease HB and W67th are entertaining and clever.

Thanks so much for the kind and thoughtful words.

columbiacounty the diplomat

Did you think
that comment was entertaining?

Did you press
the 'Enter' key by accident?