Question: I’m considering making an offer on an occupied, rent-controlled apartment. It’s a very low price. Can I make a buyout offer to the tenant?
— Eyeing a bargain in the East Village.
Dear Eyeing:
Of course you can make a buyout offer. But that doesn’t mean the tenant has to accept it.
Buyout stories are New York fairy tales: Like the three tenants who received $25 million (along with their lawyer) because they were blocking a $3.2 billion development in Hudson Yards on the far West Side. Or the recluse who extracted $17 million and a new apartment overlooking Central Park from developers — who then razed the old Mayflower Hotel to build the ultra-exclusive 15 Central Park West, where apartments regularly sell for much more than that.
So yes, by all means, get out your checkbook.
But here are a few things you need to know: It is illegal “to force tenants to leave their apartments or surrender their rights.” Anything you do, including making repeated buyout offers, can be considered harassment, which is a serious offense that can land you a hefty fine.
The New York City Department of Housing Preservation and Developments says that harassment includes a landlord:
○ Offering you a buyout:
- While threatening you, intimidating you or using obscene language.
- By contacting you at your place of employment without obtaining your written permission.
- While providing false information in connection with the buyout offer.
○ Contacting you about a buyout unless they provide you with the following information in writing:
- The purpose of the contact and that the contact is on behalf of the owner.
- That you can reject the offer and continue to live in your home.
- That you have a right to seek advice from a lawyer and may seek information on the HPD website about legal services.
- That, if you advise the owner in writing that you do not want to be contacted about any buyout offer, the owner cannot contact you about it for 180 days unless you advise the owner in writing at some earlier time that you are interested in discussing a buyout, or unless the court permits the owner to discuss a buyout offer with you.
○ Contacting you about a buyout offer for 180 days after you have notified the owner in writing that you do not want to be contacted about it.
As you might surmise, it’s very difficult to force a rent-controlled or rent-stabilized tenant out. Assuming the tenant isn’t doing anything like dealing drugs or threatening other tenants, and that the tenant uses the apartment as a primary residence, there’s little you can do to get them out short of a buyout.
There is one exception: If you want the apartment for your personal or family use, you can take over the apartment by jumping through a few legal hoops. Big warning: If the tenant is over 62 or disabled, you will have to provide a comparable apartment at the same rent. Good luck with that.
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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