buying an apartment with a rent stabilized tenant??

There is an entitlement to recover a rent stabilized unit for owner-use. You can boot them if you intend to live in the unit for a period of time and timely serve the proper notice before the lease expires.

you'll be able to get a 1br for that price without a tentant soon -wait till you see how low that one goes for with a tenant

I didn't know you can recover a stablized unit even if you wanted to live in it. Also rent stablized units can be handed down to relatives so it can go on forever.

Julia--that's my impression too.

The "personal use" loophole is extremely narrow. In practice, it's relevant only to townhouses and other small buildings. If you think you're going to decontrol a single co-op for personal use, good luck.

Here's the DHCR factsheet on the subject: http://www.dhcr.state.ny.us/Rent/FactSheets/orafac10.htm

#10 Eviction from an Apartment Based on Owner Occupancy

http://www.dhcr.state.ny.us/Rent/FactSheets/orafac10.pdf

I doubt you can do owner occupancy by buying an occupied unit, but am not 100% certain.

An owner of a BUILDING can with notice evict a rent stabilized tennant to occupy as a primary residence (subject to certain exeptions that you should have a highly skilled lawyer reveiw). Thus, in some cases it is possible to buy a brownstone with rent stabilized tennants and evict them all to create a single family home for your primary residence. See http://www.housingnyc.com/html/resources/dhcr/dhcr10.html for a brief summary.

Rent stabilized apartments, on the other hand, trade at a discount to market based on the age, health, and probability of the tennent being able to transfer it to an eligible relative. My neighbors old but healthy father lives in a beautiful penthouse in Tudor City for a comparative pittance that is owned by an investor who calls every six months to check if he is still alive.

Sorry West81st, didn't see your post.

nevermind...

"investor who calls every six months to check if he is still alive." Only in NY, kids!

Let's not forget the private investigators who make a living doing this work.

How is the loophole extremely narrow? An owner can recover for his own use or his immediate family's use so long as he gives the 90-150 day notice and resides there for a period of three years. I don't think that's "extremely" narrow. The bigger issue may be that the tenant most likely won't readily leave upon the expiration of the lease. Thus, you'll be embroiled in a holdover proceeding in court, expending huge legal fees, to demonstrate that you meet the criteria for "owner-use" and that the eviction is proper. This is why these tenants get huge buy-outs.

Also - in practice - I've seen this apply to more than just townhouses and small buildings.

Joepa:
"An owner must establish an immediate and compelling
need for the apartment."

Read the case law on "immediate and compelling
need".

Besides, I don't believe an owner can do OO for a single unit; it's usually done in a town house or multi family bld situation.

OK, joepa - you're the expert. Buy that coop on 58th Street.

joepa,

Have you seen OO for a single unit? If so, please share.

dwell - show me the case on that - I'd like to read it. I believe the "immediate and compelling" need only applies to units OUTSIDE NYC. The only thing the owner need demonstrate in NYC is a "good-faith" intention to occupy the apartment and it can be done for a single unit. I've done it.

West - I didn't say I would buy-it, I was just pointing out that it is not a narrow loophole. It's still may prove difficult getting the tenant out and that is caution enough.

Joepa,
" I've done it." Ok, so tell us about it.

"The case"? There's like 300+ (?) cases on OO.

OO is not my expertise. I'd have to read recent case law, which I ain't doing, but, I know for a FACT that it's no cake walk.

I'll do the research for you: Language directly from the recent case Mozaffari v. Fisher (NY Civil Court 2008)

Pursuant to RSC § 2524.4(a), an owner may refuse to offer a renewal lease to a rent stabilized tenant when the owner seeks to recover possession for the owner's use and occupancy as a primary residence or for the use and occupancy of a member of the owner's immediate family (RSC § 2524.4[a][1] ).FN7 This refusal must be made in good faith, requiring a showing that there is an actual intent to use the unit as a primary residence for the owner or an immediate family member ( see Nestor v. Britt, 213 A.D.2d 255 [1st Dept 1995] ). The good faith requirement of RSC § 2524.4(a) is met when an owner “seeks to gain possession with the honest or genuine intention to recover the tenant's premises for personal and/or family use” ( Delavan v. Spirounias, NYLJ, March 14, 2001, at 19, col 5 [Civ Ct, N.Y. County], citing Delorenzo v. Famiglietti, NYLJ, May 1, 1996, at 30, col 3 [App Term, 1st Dept] ). The court must scrutinize the totality of the facts and circumstances when determining whether an owner is acting in good faith ( see Tauber v.. Ruscica, NYLJ, Oct. 14, 1987, at 14, col 3 [Civ Ct, N.Y. County] ). The owner carries a prima facie burden to establish by a preponderance of the evidence a good faith desire to recover the apartment for the owner's use ( see Minick v. Park, NYLJ, Feb. 25, 1999, at 29, col 2 [App Term, 1st Dept] ).

FN7. Section 2524.4 of the Rent Stabilization Code provides:

“The owner shall not be required to offer a renewal lease to a tenant ... and may commence an action or proceeding to recover possession in a court of competent jurisdiction, upon the expiration of the existing lease term, if any, after serving the tenant with a notice as required pursuant to section 2524.2 of this Part, only on one or more of the following grounds:

(a) Occupancy by owner or member of owner's immediate family.

(1) An owner who seeks to recover possession of a housing accommodation for such owner's personal use and occupancy as his or her primary residence in the City of New York and/or for the use and occupancy of a member of his or her immediate family as his or her primary residence in the City of New York ...” (RSC § 2524.4[a][1] ).

I agree it's not a cake walk but there is no "immediate and compelling need" criteria within NYC. I'm an attorney and I've done it for clients. What do you want to know about it?

I am an L and an atty. I used to do DHCR, but don't anymore, that's why I said I'd have to read the cases.

So, if this is your practice, then pleez state clearly: Can an owner do OO for a SINGLE UNIT occupied by a RST?

If this is your expertise, then you should be able to answer this real quick.

I am not a lawyer, and I don't do DHCR, but when I was considering purchasing a townhouse with rent stabilized units in which I would have occupied the garden apartment, I was led to believe by those with JDs that I would be able to expand the area I occupied into a SINGLE rent stabilized unit with notice and subsequent eviction, and that this would require that I purchase the building in my own name rather than through a legal entity I controlled. So my take, which could be wrong, is that it is less about a SINGLE UNIT than about BUILDING OWNER. To be honest, I didn't really care about condo/co-op stabilized units, so my assumption that owner occupancy would not work in these cases could easily be flawed. And as I am small potatoes for NYC, my legal advice on such a complicated matter could easily be flawed as well.

Since I decided that I really don't have ice running in my veins, I decided not to move forward on that deal.

Seems to me there was an article in the NYT real estate section a while ago about a guy who bought a townhouse and started evicting the rent stabilized tenants because he wants the whole townhouse for his family.

But this is a different situation--it's an apartment in a co-op.

Don't think those are the same legal issues.

You might be thinking of 47 East 3rd St, where the owners are attempting to occupy the entire tenement. Here is the renters side of the story: http://47e3.org/

jrd,
As I recall, yes, you're right, Owner can't own bld as a corp or llc, must own in your own name. But here, we're talking about a single coop/condo unit, not a townhouse or a multifamily bld.
Here's the thing: if it was so easy to do w/ a single unit, then everyone would have done it & there's be no occupied units left, so that's why I think it may not be doable.
I don't have time to research it, so like everything, if anyone contemplates this, consult an atty who knows.
Still waiting for an answer from joepa.

jrd,
I checked out http://47e3.org/ & it says they settled the case. Guess the O won.

good riddance to rent stabilization.

A plea to all who may have any information to can contribute in making a case against my landlord.
Currently my wife and I have been living in a NYC (Bklyn) apt for the past 37 years that is rent stabilized. We have two kids, with minimal options to move anywhere else. Finance is tight, the expense of the move is high and location is scarce. The landlord has one unit for his mother and brother and wishes to owner occupy (OO) our apartment for himself. Notice was given within the time frame. Another apt just above us was recently available and rented to tenants who pay a higher rent price.
What to do?
How to win?
How can I speak with a housing judge before my lease expires? Waiting for my lease to expire makes us look irresponsible.
Who pays for the legal expense to evict in a holdover case?
How long can a judge give us to move if the lease expires?
Help....

streeteasyrn:

Not sure where you are in this process as you posted 7 months ago, but as per the DHCR housing rules:
http://www.nyshcr.org/Rent/FactSheets/orafac10.htm
According to the Rent Stabilization Law, only one of the individual owners of a building can take possession of one or more dwelling units for personal or immediate family use and occupancy, even if the building has joint or multiple ownership.

So he may not have a right to evict you if he has already done so for family members previously.

Here's another example of a condop on UWS (82nd and Broadway) with a rent-stabilized tenant. It's selling for 250k!

The tenant is getting a sweet deal: $1400 per month for a 750 square-foot apartment with eat-in kitchen and 1.5 baths in prime UWS.

http://streeteasy.com/nyc/sale/877344-condop-221-west-82nd-street-upper-west-side-new-york

37 years in the apt, right? How old are you and your spouse?
Same owner?
How many units in the building?
What is your income level?

The 'personal use' rule usually do not apply to units cooperatives that have a 'non-harassment' plan filed as part of the conversion. Basically the sponsor waives their right to evict on these grounds for themselves and their successors and assigns and in return stabilized tenants are incentivized to vote for the plan to convert. Of course one would have to review the corporate documents to confirm.

Purchasers of rent-stabilized coops and condos are barred by statute and by the terms
of every Offering Plan from evicting stabilized tenants for the owners' use

Buying a car without a steering wheel.

Buying a calculator without the plus sign.

Buying a book without chapter 1.

Another one:
http://streeteasy.com/nyc/sale/693419-condo-23-east-81st-street-upper-east-side-new-york

> Another one: http://streeteasy.com/nyc/sale/693419-condo-23-east-81st-street-upper-east-side-new-york

Any idea what that stabilized tenant is paying for an entire floor of a townhouse?

I had a friend who was a senior citizen in a rent stabilized apartment, half of the ground floor of a brownstone with the whole backyard. The owner wanted to take over the whole building for his personal use. He "bought out" 7 of the 8 residents over a 2 year period for $20K each, but she refused the offer. He started renovating around her apartment and she still refused his offer. She hired a lawyer when they started dumping construction debris in her garden from the upper apartments. The owner wound up having to buy a condo with a terrace to provide a comparable apartment, rent the apartment to her at the same rate she had in the brownstone, pay for her move, and give her a cash settlement of 200K. She lived there for 5 years before she died.

To answer the original question.

There are many reasons someone would buy an apartment with a rent stabilized tenant.

1. Perhaps to off-set rental revenue or those that can afford to take a loss.

2. They have information that the current owner doesn't have.

3. Perhaps the carrying cost is not that much and they are willing to take the risk.

Add reason 4: The expected increase in value of the apartment when later sold, even if the tenant never vacates, is calcuated to be greater than the total investment expense over the period. (In a rising market, with low interest rates, it's do-able.)

The Greater Fool