Lease break terms

Rentals buildings may offer that for a fee but condo owner has to be pretty fing dumb to offer you low current rent and lease break.

Yeah if I were a small time Manhattan investor I wouldn't take this risk either.

You should ask someone who understands the changes from Housing Stability and Tenant Protection Act of 2019.

I got such a clause once in NYC - 90 days notice, 2 months rent to break after a year. Obviously LLs don't like such clauses, but it's all part of the negotiation. You're more likely to get such a clause if you pay the broker's fee.

For a big city with big price tags, many NYC landlords are surprisingly unable to maximize the value of their units. They churn good tenants by trying to raise the rent, don't do simple maintenance on "luxury" units, and let units sit empty for months at a time rather than lower the rent a bit to get a tenant.

A pre-negotiated breakup clause that takes effect after a year makes fine sense. I'm on a month-to-month myself, after all. But that came on the heels of 3.5 years of established goodwill with my landlord. For now you're just some guy. If you won't break on this front, you gotta at least bend somewhere else. Nada (our best known rent negotiator) also mentioned tossing in a broker fee as a way to soften them up for long term concessions.

Not sure how the 2019 law factors in. Maybe the fact renters can no longer offer a bigger deposit or advance prepayment as one of their sweeteners?

Why is a landlord dumb to accept a lease break on such low market rent? Wouldn't that be smart...

Why give a discount if all you get is someone who may not be there two months for now and deal with the headache of finding new renter? It is different, if you are breaking a lease at peak rental time as in June/July.

Personally, I wouldn't want to deal with a renter with quirky terms as there may be other quirks in their thinking beyond trying to get flexibility. I would keep it empty for another month or two as come March things may get much better. But landlords are in a pickle right now. It is just a negotiation.

Also, rental buildings may do it as it does not take them as much effort to rent out as individual owner.

@300_mercer
A lease break term is not a quirky term. I have had it for four units and never an incident. Those leases also had 30 day notice/1 month break up fees. Here I offered a two month fee and 60 day penalty, not nothing - especially if the rents are considered so low at this opportune time for a renter. Here, the renter is taking a unit in peak of pandemic when units are vacant, not in the summer peak season. But I agree, if a unit has been vacant for a while and is OK to let it remain vacant, they will likely get better terms in the future than today.

@RichardBerg
I had offered to prepay a few months upfront, but was told that was illegal. My read of the law is an owner cannot require it, but a tenant can still offer it/do it. But regardless, I am told it is illegal and would not be accepted.

Rental building or individual owner?

Things are going to get better by March?

This may surprise you all, but yesterday I closed on a free market apartment. I could rent it today for $5000. But I really hate tenants, especially those who pay even a dime too little, and today they're all bottom feeders. It's unbelievable what they expect. They think I should clean the apartment, fix the broken heater, provide hot water, remove the mold, give them a ridiculous break clause, and give them a month of free rent! Don't these tenants understand how hard it is to be a millionaire landlord with a dozen properties to collect rent from? Instead of renting it out today, I'll wait till July when I'm sure I could get $5500 and the market will be so strong that tenants will desperately take whatever they can get. I'll get $500 a month more! I'm the smartest landlord ever.

@300mercer
Both units were individual owners

George, What? You bought in NYC? Can’t be true.

IRS, Vaccines. Plenty of supply with more in the pipeline and we will pick up speed with actual administration to perhaps 3mm per week. So we have another month of Covid situation getting worse. Holiday gatherings I am sure will play a part in the next few weeks.

Do you think rental supply increases further or is at stasis? I am thinking about 3BR on the UES

I didn't buy. I'm parodying the typical NYC landlord who thinks it's a good idea to leave an apartment vacant rather than rent it at a price he thinks is "too low". Because any logical analysis says it's better to have a tenant in an apartment than let it sit empty for more than a month or two.

No. As an individual owner, there are actual costs to rent out, vacancy, and cost to get the apartment ready for next tenant. Headache on top to vet the new tenant, condo approval, and get calls from them when they move in. And then there is cancellation risk at off-season and potential for further off-market quirky asks.

You make a fine argument for why turnover should be avoided. I see nothing in your statement that suggests why one shouldn't rent out a unit today instead of waiting till March.

It is all in context of giving a lease break provision.

Rental buildings may give lease break provisions as their turnover costs are much lower and they average across many apartments and they can deal with quirky people.

There is already an embedded lease break provision in every lease, which requires the LL to make efforts to rerent the unit. Tenants who know their rights pay the first month of rent after quitting the lease but not the second. Let the landlord take you to court to prove that he has marketed the unit. Even better, why not have a liquidated damages provision that avoids all the back and forth?

George,

Will you please quote exact excerpt which I believe is there due to new 2019 law if the landlord typically crosses it out? Are liquidation damages allowed by law if the renter decided no to hold up their end of bargain in the written contract?

Proving marketing the unit is easy. You just have to list it on Streeteasy at the same or better rent as before. As an individual owner renting out, I would make sure that the renter has professional reputation at stake in going to the court and has professional references who you can actually call. I had a renter misbehave and I called his professional reference right away and the renter's behavior changed completely. But that is me. I will never rent to quirky people who ask for off-market stuff.

It was not I who referenced the 2019 rent law.

Of course liquidated damages are an acceptable legal remedy in a contract. The whole point of liquidated damages is that the parties agree the remedy in advance of a breach.

As for not paying the rent while the landlord remarkets the unit, see here: https://www.nytimes.com/2020/11/21/realestate/break-a-lease-paying-rent.html

It's your choice not to give unusual terms. It limits your pool of tenants, and I guess that's ok for you.

Mouse, could you post what you wrote in your offer here? Anonymize whatever you want, but if I see what you wrote I may have some suggestions.

Separately, regarding liquidated damages clauses, the key is to make sure the bargain is fair to both parties and that the exact harm cannot easily be ascertained. A provision of 2 months rent seems to adequately cover the LL's inconvenience, lost rent, and cost of remarketing. The inconvenience in particular is hard to quantify in terms of cost. The 2019 rent law just says that the LL can't retain the security deposit past 14 days.

I also looked back at the last lease I had with a big landlord. That lease has a provision for 2 months rent and 60 days notice. I suspect it's standard in their leases. So Mouse's request is not so odd.

300 -- calling your tenant's professional reference is almost undoubtedly a violation of the law. Wouldn't advise publicizing it, even if in fact you did it.

It is not. The purpose of providing professional reference is clear. It just depends on what you say to the reference and if it is 100% true.

Those reference letters people provide are not meaningless.

@inonada
Pretty simple offers:
Scratch out the apartment sale clause and pass through of condo tax. 60 day notice/2 month lease termination fee. And I look for an extended lease, e.g. 2YR lease with 3rd year renewal option. I offer to prepay a few months rent as well. The smartest push back I got was "hey, you can't ask for an extended lease and a termination out". The reasonable compromise seems to be accepting no termination out on year 1, but getting termination outs after year 1.

Mouse, I already understood what you offered. My question is about how you made the offer. I.e., the text of the offer as you actually wrote it. Or did you make the offers verbally?

I think that one could make an argument in housing court that a landlord calling references to inform them of a rent dispute is harassment. References are to be used once, which is during the application process. Going beyond that one limited use may not go over well with a judge.

Calling references to attempt to collect a debt is also illegal under the FDCPA. A creditor can only call to attempt to locate someone. As the LL knows precisely where the tenant is, he has no need to make such calls.

https://www.consumerfinance.gov/ask-cfpb/can-debt-collectors-tell-other-people-like-family-friends-or-my-employer-about-my-debt-en-332/

Ding ding, George got it.

300 please be careful, an FDCPA fine can easily set you back several years of profits from NYC house flipping (in good times)

@Inonada
It was text and verbal. Similar straight shooting as above plus laid out reasons why I would be a good tenant etc. Generally, the brokers seemed not the obstacle but the owners. In one case we were about submit the coop application, but owner even surprised broker by unwillingness to accept any break language at all.

George, I checked the legality with my lawyer. It all depends on what you say.

And what the referee wants to know when you call.

300, remember though that you're calling my friends, the people I've known for decades who also know all the sh!t that's happened in my life. Someone attempting such a technique would be wise to record the conversations (and declare the same) in case my friends' recollection of the conversation differs from yours. It's very easy to cross a line when attempting to collect a debt.

George,
Professional reference. Personal references are meaningless - not sure why people even get them. At least, you seem to acknowledge that there is nothing legally wrong in calling the reference provided by the tenant.

In any case, you do not seem to be misbehaving kind as a renter. So you do not have anything to worry about your landlord calling the referees. If you rent out your vacation home, do get a good local lawyer to learn about yours and tenant's rights and how to screen the potential tenants. And if you ever need the script when you call a referee for a renter, reach out to me via this board.

“It all depends on what you say.”
I would argue that it depends on the totality of the circumstances, the lawyers (or individuals if in small claims), the credibility/likability of
the witnesses, and the judge hearing the case.

One could style the aggrieved tenant’s case as a state law tort (invasion of privacy or intentional interference with prospective business relationship) and it would be a free for all.

The foregoing is not intended as legal advice and anyone faced with a fact pattern such as the one described by the earlier posts should seek legal guidance from a lawyer with appropriate expertise licensed in NY. As with so many areas of law (and all other highly specialized licensed professions), finding the professional with “the appropriate expertise” is the hardest part. Were I a NY landlord, I would tread very lightly in resorting to creative tactics.