Rent-stab tenants sell rights to apt to 3rd party?

No

Strictly speaking? No, since the rights of a rent-regulated tenant are not transferable. Effectively? Yes, because the conversion plan likely gives a tenant in residence the right to execute a purchase agreement, then assign her rights under that agreement to a third party.

Wouldn't the developer be able to find that out easily and stop the sale? They know which apartments are rent regulated.

i believe it is as 81 states--the rs tenant executes purchase agrmt then effectively sells rights under that agreement to buyer

happened all the time in the coop frenzy of the mid eighties--rights could trade a few time before plan took effect

There's a broker hounding (harassing) my co-worker about doing this. Broker maintains tenant should secure the insider purchase price and then sell this right to purchase to one of broker's clients. Broker would get standard broker fee. (Just trying to get some info for my friend, since he is too trusting of people in general and this broker is being extremely aggressive in pursuing him.)

Separately, as far as I know, developers are under no legal obligation to offer an insider price to rent-regulated tenants during a conversion--is this correct?

westie: That's reprehensible. If you really think the hounding rises to the level of harassment, I would suggest reporting it to the Department of State.

If your friend could use some free advice from somebody who has been through the conversion process as a rent-stabilized tenant, I'll be happy to speak with both of you - strictly pro bono.

To answer your last question, offering some sort of insider discount is generally in the Sponsor's interest, but the official discount in the Black Book these days tends to be quite small. Bigger discounts may be available at some stage to some or all tenants, either by formal amendment to the Plan or via separate negotiation.

Thanks West 81st, will pass along the offer. Much appreciated.