Holdover

this is very common. Set the rent at 125% of market rent. After 4weeks, set the market rent at 200% going forward.

We needed to stay in our apartment for 2 weeks after closing. Our buyer let us stay for 10 days and charged us a little more than 1/3 of the market rate for a rental. However, the buyer had us put 5K in escrow to cover any damages to the apartment and certain penalties if we did not move out by the specified date.

If you go that route, I suggest you have YOUR lawyer hold the escrow monies. I was glad we did because the buyer came up with trumped up "damages" to weasel more money out of us. For example, he wanted us to change the whole doorknob/locking mechanism along with the locks.

He claimed we had malfunctioning locks that did not conform with building regulations. He just found out how much it cost to change the locks and was being cheap. The locking mechanism/doorknob was the one the developer had installed. We used the locks with no problem just moments before he did the final walk through.

If the buyer's lawyer had held the escrow money, he could have just deducted the 1K for the lock work and sent us 4K. We would have a fight on our hands for the remaining 1K. Since our lawyer held the money, he refused to release the 1K to the buyer without some proof from the managing agent substantiating his claim. He couldn't provide one, so we got back the whole 5K.

raddoc, you have a huge advantage because you have a signed contract and this is a new negotiation the seller wants to impose. Don't forget that. It's different than if you were trying to get to contract and were being jerked around at that stage.

after approximately 20 days you are a Landlord and you're going to L&T court if a dispute arises. That used to be a 9 month wait. Not sure what the wait is currently. I'm sure your sellers know this.

I would dig in my heels and try not to go along with this lease back at all--you have a contract. (A holdover tenant is actually something else, so I'm staying away from that term, and think you should too.)

If that is impossible or too expensive for you for other reasons, I agree you need to charge 125% of rent and have your lawyer take all the rent in advance into escrow. Put a time limit on that rental, none of this open-ended stuff. Also security deposit up to legal limit in NYC (2x rent I think?)

I hope the terms are so onerous that they back down and get out, as they are supposed to do.

What I would actually do, and plan personally to do if I end up in the same place as you, is to delay the closing and refuse to close on anything other than a vacant unit. And I would go into temporary housing if necessary, but we have a car and a suburban job situation, so that's easy for us.

We tried unsuccessfully to buy an condo a few months ago because the owner wanted a 6-month leaseback from the new owner and, the market being what it is, they wanted cheap rent to boot.

But I've been a landlord for way too long to be sanguine about this subject so we lost that apartment over the lease-back terms.

Just to explain, a holdover tenancy happens without the landlord's explicit authorization. The tenant just doesn't leave when the lease is up. The landlord may go ahead and cash the rent checks of a holdover, or refuse to, but that's another kettle of fish.

What you're describing here is you willingly becoming a landlord and they willingly become a tenant. That is not a holdover by definition, that's just you becoming a landlord.

Again, they number of days is the issue. It's approximately 20 days, 14 days, something like that, when things get interesting. 3 days isn't enough to turn you into a landlord, you just have a house guest.

Be warned, just because the contract says "this is not a landlord-tenant relationship," if they stay there 3 months, good luck getting a judge to think that the line in the contract is legal.

I know a lawyer who puts that rider in her contracts with lease backs and thinks that protects her buyer. I would not trust it in NYC.

You can put all kinds of junk into contracts/leases that a judge can just throw out in a dispute, or that are illegal lease provisions ("no kids living in the apartment" is the famous one).

If everything goes peachy-keen it doesn't matter, of course. Depends how risk adverse you are, or aren't.

If this is for a co-op, you may not be able to have the previous owner stay on -- they are no longer the shareholder and proprietary leaseholder, and the building may not permit owners to rent out their units (particularly in the first year of ownership).

As has been said, depends on your risk appetite. I was that seller who needed extra time to move into new place. We ended up paying pro-rated mtce and 4k.

Some coops and condos allow the seller to stay in the apartment for up to 30 days past their sale to coordinate a closing/move in for their new purchase. However, the buyer must notify the Board in advance, give the exact date by which the seller must vacate, guarantee the maintenance payment during this period, and take responsibility for any damages to the building.