Your landlord sends a buyout letter. What do you do?
Question: I live in Bayside, Queens, in a prime location near the Long Island Rail Road and everything else. My landlord sent a buyout letter, but I did not reply. I currently pay $1,100 per month for a 1-bedroom, rent-stabilized unit, a second-floor walk-up, where I’ve lived since 1995. If I vacate, he will remodel and ask for more than $2,000 per month. New tenants are paying this and much more. Logically and legally, what figure can I ask for, and how do I hire a real estate attorney who will take his fee when the buyout is complete?
— Ready and Willing
Dear Ready:
Repeat after me: Never, never, never name a figure for a buyout offer.
You may be tempted, especially when you hear stories of fantastically rich New York tenant buyouts of hundreds of thousands, even millions of dollars. But strap yourself down, fill your ears with wax and resist. Yes, resist.
Why? Basic negotiations. Whatever figure you name becomes the top of the money scale as the landlord tries to wiggle you down. On the other hand, if you let the landlord make the first offer, then it’s you who will be wiggling that number up.
Besides, if you think about it, the landlord is the only one who really knows what your apartment is worth to them. You guess. They know.
This is why you should, indeed, get an attorney who is familiar with the Bayside real estate scene. Although I can’t recommend a specific lawyer, I’m sure that any competent real-estate attorney can handle negotiations for you. I can’t promise that you will find a lawyer who will take your case on a contingency basis, but such negotiations don’t have to drag on and on and shouldn’t be that expensive. In any case, after an initial retainer, you probably wouldn’t have to pay until the deal is done. (Here’s a great story about the ultimate New York tenant buyout. You might want to note the name of the holdout’s lawyer.)
Finally, here are a few tips you should keep in mind:
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- The landlord can contact you about a buyout only every six months. If you say no and they persist, they could be in legal jeopardy for harassment. Your attorney can approach the landlord, however, at any time.
- Look beyond just the new rent. Buyout offers should include relocation expenses, tax payments and other considerations.
- Insist on aid to help you land another rent-stabilized apartment. You don’t want to give up that kind of protection easily. After more than 20 years where you have been, you may be in for some serious sticker shock.
- And be wary. Hard as it may be to believe, some New York landlords are less than entirely honorable. Yes, I’m shocked, too. But for every $17 million tenant buyout, there are dozens that didn’t quite pan out as the tenant had hoped. Get a good contract and get your money. You don’t want to end up spending your first night out of your home sleeping in a U-Haul.
David Crook is a veteran journalist and author of The Complete Wall Street Journal Real-Estate Investing and Homeowner’s Guidebooks. Do you have a question about anything real estate-related in NYC? Write him at askus@streeteasy.com. For verification purposes, please include your name and a phone number; neither will be published. Note: Nothing in this column should be considered professional legal advice. If you have a legal issue, consult an attorney.
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