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March 30, 2007
PURCHSING A BLDG W/RENT STABALIZED/SUBSIDIZED APTS
I am interested in purchasing an 8 family off Atlantic Ave under the LIRR, but the building is in need of a complete overhaul from top to bottom. At present, the property is in a 10 year unsettled estate and is bringing in less than $1500 in income per month. I know the executor of the estate and would be willing to purchase the house, however those tenancies are in rent subsidized and stabilized apts. How can I get them out and the apts converted? These tenants are very difficult; up to last month someone died and the entire family moved into the apt. The owner is at her wits end and does not know what to do.
Comments
It will always be stabilized as long as it has more than five apartments. You can buy the tenants out (about $200,000 per tenant), get a certificate of non harrasment, hire an architect and convert to a five family. That is the only way to get it off the rolls. Rent stabilization has nothing to do with the tenants. It is attached to the building.
Posted by: Anonymous at March 30, 2007 7:54 AM
The above poster is basically correct, except I don't think you need a Certificate of Non Harassment for rent-stabilized/controlled tenants, only for buildings which were used as SROs.
Would like to clarify, though, that the tenants do not have to accept $200,000 to leave. Amounts are negotiable, and if the tenants are really paying small rents, they may be unwilling to negotiate. If you intend to live in the building--and if you're buying it as an individual, not a corp.--you can try to claim units for personal use, but that's a battle.
You're going to need a very aggressive landlord attorney, and, from your report of relatives moving in after someone died (which does not entitle them to succession rights to the apartment, btw), the estate should have already hired one.
Posted by: Anonymous at March 30, 2007 8:43 AM
Generally requires deep pockets and patience. You can take over apartments for your use, and that of your immediate family, but even this will require heavy lawyer involvement.
Me, I'd find something with less hassles attached. Good luck,
Posted by: John at March 30, 2007 8:43 AM
The above poster is basically correct, except I don't think you need a Certificate of Non Harassment for rent-stabilized/controlled tenants, only for buildings which were used as SROs.
Would like to clarify, though, that the tenants do not have to accept $200,000 to leave. Amounts are negotiable, and if the tenants are really paying small rents, they may be unwilling to negotiate. If you intend to live in the building--and if you're buying it as an individual, not a corp.--you can try to claim units for personal use, but that's a battle.
You're going to need a very aggressive landlord attorney, and, from your report of relatives moving in after someone died (which does not entitle them to succession rights to the apartment, btw), the estate should have already hired one.
Posted by: Anonymous at March 30, 2007 8:44 AM
Um. Why are we encouraging someone to reduce the amount of rent stabilized apartments?
Posted by: putnam-denizen at March 30, 2007 9:12 AM
putnam-denizen why are private citizens required to subsidize housing? Please explain.
Posted by: Anonymous at March 30, 2007 9:19 AM
The owner is really ignorant of the process and has done numerous repairs, but never raised the rent accordingly. I am sure since the death, the rent has not been raised once. I know one tenant is paying $75/month for a huge 3 bdrm apt. What the f#$%? Excuse my french, but this is NYC. She is running a shelter not at apt bldg.
Posted by: nycmoe at March 30, 2007 10:37 AM
putnam denizen rent stabilization is anti american and causes a housing shortage in new york city. it's a terrible policy. maybe you'd be happier in some communist country?
Posted by: Anonymous at March 30, 2007 11:15 AM
you can find tons of info...from a tenant perspective over at tennant.net....but beware, this site is a tennant advocacy group. There are numerous links to various agencies.
Posted by: Anonymous at March 30, 2007 11:19 AM
You can find tons of info...from a tenant perspective over at tenant.net....but beware, this site is a tenant advocacy group. There are numerous links to various agencies. I live in another state, and am fascinated with New York's obtuse rent laws.
Posted by: Anonymous at March 30, 2007 11:21 AM
9:19 and 11:15 thank you for ever so artful responses to my question. And no, I don't think I need to move to a communist country. I didn't realize that along with restoring old houses people recycle old (and never all that witty) retorts on this website as well.
Posted by: putnam-denizen at March 30, 2007 11:56 AM
well if you wish to stay in america, don't support anti american tax payer ripoff policies like rent stabilization. People wonder why housing prices in new york are so high. It couldnt have anything to do with artifically reducing the availability of market rate housing through ill considered, constituent-pandering policieis like rent stabilization. the op will be doing us all a favor by taking these eight units off the rolls. it's legal and it's good for america.
Posted by: Anonymous at March 30, 2007 12:26 PM
12.26-- we've heard your and others opinions about why rent stabilization is so bad for New York. Can you give us some facts to support your position? Show us some research re: cause and effect of rent stablization vs. high cost of housing? If there really is a causal effect, can you provide us with the data? Over the past few years more and more NYC apartments have become destabilized due to the $2000 rule, etc. and yet rents keep rising. Please explain why. For the record, I have no pro-/con- opinion towards rent stabilization. I'm just tired of people spouting Bush-style propaganda (putnam-denizen, you big bad commie)while parroting dubious claims, without so much as an ounce of critical thought behind it. So, 12.26, educate us.
Posted by: Anonymous at March 30, 2007 2:39 PM
Who knew my inquiry would start such an interesting anf firey debate; I love it! I really think it is the governments job to take of its citizens and not the job of private individuals.
Posted by: nycmoe at March 30, 2007 3:24 PM
If you do a google search for Economy, and then search within those result for Rent Control and Rent Stabilization, you'll find dozens of articles, both pro and con. Some are from think thanks that deal with economics, and some are the raving of lunatics with a web connection. It's dry, but informative reading. It all boils down to which side of the fence you live on....owner or tenant
Curious Out of Stater
Posted by: Anonymous at March 30, 2007 4:22 PM
The biggest problem are the rent controlled/stabilized tenants that really live elsewhere, but hang onto their cheap NYC rental apartments.
The city should make it easier for landlords to evict tenants that are breaking the law. Instead they put the burden of proof on the landlord which requires hiring private investigators and paying for drawnout lawsuits.
I can live with current rent regulations as long as my tenants follow the law, but half of them don't, which really chaps my hide.
Posted by: Jake the Snake at March 30, 2007 4:48 PM
And, by the way, VERY well put Anon 9:19am,
"Putnam-denizen why are private citizens required to subsidize housing? Please explain."
It's funny how Putnum-denizin completly ignored such a clear and direct question. The NYC rent laws are totally unfair to private landlords and I bet he knows it in his heart as well as we do.
Too bad the rent regulated tenants have so much voting clout!
Posted by: Jake the Snake at March 30, 2007 4:59 PM
Since the threat has been "highjacked" I'm curious as to people opinions on this recent article from post...I understand the concepts of rent control/stabilization...but really, when is enough enough?
Curious Out of Stater
Posted by: Anonymous at March 30, 2007 5:16 PM
In an era when you cannot turn a corner without running into luxury condo development site, it is pretty sad to see people so eager to kick poor people to the curb. A previous poster asked a very good question -- more and more apartments are being decontrolled when the stabilized rent exceeds $2K, and yet somehow this has not magically created affordable housing. We are seeing record numbers of families in shelters. Isn't it amazing that at a time of absolutely BOOMING residential construction, we have more families in shelters than ever. Isn't it remarkable that at a time when the MEDIAN INCOME (which of course doesn't include their assets/wealth) of white families in Manhattan is $300K, some people have the time and inclination to complain about poor people living on Atlantic Avenue.
OP says he/she wants to "get them out and the apts converted." Converted? To condos? Get them out? To where?
Poor management of this building in the past -- in terms of making repairs, getting legal rent raises, etc -- does not justify throwing people into the street.
Posted by: SPer at April 1, 2007 11:53 AM
Er, I am sorry not to have answered a direct question, but I am very busy packing my bag for my move to a communist country - question does North Korea count or is it really an absolute monarchy in communist clothing? Nah - forget it too cold.
A serious answer to the query demands more time than I have. A couoe quick responses - government is taking care of people by imposing renta stabilization. Owners of rent stabilized buildings (unless they bought them in say 1922) were well aware of the economic impact of rent stabilization and thus doubtlessly negotiated a discounted price. Why should private citizens have to subsidize housing - for the same reason we subsidize health care, schools and police. Because we are civilized and want our children to grow up in a just society. Now obviously many would argue that renta stabilization is a grossly imperfect and inefficient way of providing lower cost housing to those who need it. Not sure to me, however, that there is the political will to pay for huge new housing projects (perhaps paid for by taxing property owners for ten years on their unexpected windfall after the removal of price controls?).
One truth is that rent stabilization hasn't always really controlled prices, as in many neighborhoods the market place rent was lower than the legal rent. Of course that is not so true now. But there is another aspect of "stabilization" which is much prized by tneants - the right to an automatic renewal. it used to be that every April 1st (I am talking nineteenth century here) the entire lower east side would seemingly be changing apartments. Renta stabilizations has spread one of the greatest benefits of homeownership to the tenat class - the right to consider an apartment a long term home.
Honestly the reason I posed the question (why are we helping someone distabilize a building) is a see this site not as a tool of realtors and large landowners, but rather a place for those who are seeking to build a home and community. That, to me, carries a moral imperative to care about more than myself (I own my house btw) and my bottom line. Just color me red...(in the old sense of the word, of course!)
Posted by: putnam-denizen at April 1, 2007 5:39 PM
Put-Den,
I respect that you care for poor people, but it's still not right that individual landlords have to support individual tenants. It's not comparable at all to health care or education or police, as you claim. These services are paid for through taxes everybody pays, not just a select minority of the population, and everybody benefits from them, not just the lucky ones who happened to move to NYC twenty years ago.
If your townhouse came with a rent controled tenant paying only $100 dollars a month rent (close to what several of my tenants pay), I would not say, "Well, that's fair. You knew the deal going in," because the LAWS that allow her to live basically free off your back are NOT FAIR. Just because you got a better deal on the house than if it had been delivered vacant does not change the fact that the current rent regulation system is completely unfair and unjust. Why should one person arbitrarily get a free ride while the rest of us have to work and pay our own rent?
If the city forced you to rent rooms in your house for $50 dollars a month to alleviate the homeless population of NYC would you happily comply? Of course not and neither would I. You seem like a smart person. Why do you insist on arguing in favor of the current rent regulation system?
I can understand if you were a rent stabilized tenant, but you own your own house! I'm all for taxes going towards rent vouchers for people who need them. I'm not for a system that allows lucky long term renters without any low income criteria, who in many cases can afford to pay market rent, to be in essence supported by private landlords who had the misfortune of buying a building in which they resided.
Posted by: Jake the Snake at April 1, 2007 6:18 PM
I am sorry, someone forced you to buy a rent controlled building? Or you woke up one morning a said "shoot" those rents seem awful low, oh gee I forgot to check that before I bought the building? While I agree the ssytem isn't perfect or maybe even "fair," my point is that you can't cry poverty when the system wasn't a surprise to you. There was not a "misfortune of buying a building" where there were rent stabilized aparatments, there was a decision - I assume a calculated one. Now that you are plotting to change the rent laws and think up strategies to throw people out of their homes in order to better your bottom line. Just as I am willing to admit that the current system (which actually is far more favorable to landlords than it was even a few years ago) does contain many of the inefficiencies you have pointed out, would you consider pondering about whether or not there are some ethical problems with your position. You want to buy buildings at a discount and then throw people on the street to reap an unexpected profit. Nothing illegal about that (unless you resort to illegal activities), but hardly admirable. And no, I am not so fast to separate out housing from the other services provided in civilized countries. Fact is wealthy people pay "more than their fair share" of all those services. And I haven't seen landlords lining up to accept Section 8 tenants who have the very vouchers you suggest as a substitute. Rent control is a political system which shifts power from landlords to tenants. Vouchers wouldn't be equivalent.
I wouldn't have bought a house with a rent controlled tenant - because I couldn't afford it. A friend of mine bought a property with a non-protected tenant, but because she was elderly and housebound, he basically built his family space around her. Someday she will move on, either to supported care or to the great rent controlled apartment in the sky. My friend did more than he was legally required to do because it was the morally right thing to do.
And there are many who would claim that it is the landlords who are the parasites, getting a free ride off the hard work of their tenants. But that is too red even for me.
P.S. Thanks for engaging politely as opposed to suggesting that I leave the country!
Posted by: putnam-denizen at April 1, 2007 9:59 PM
Put-den,
This quote is from a wealthy lawyer in an article a couple days in the NY Times:
“Ever hear the words ‘rent stabilized’?” says Mr. Podell, who’s paying $702 for a one bedroom in SoHo. “What do I need a fancy place for? A lot of people want to show off their wealth. It ain’t me, baby.”
These are the types of people I mostly have as tenants in rent stabilized apartments. Many of them have second homes that they seem to spend most of their time at. It's a farce.
Do you realize that any day a "neice" could move in with the old lady in your friend's apartment and in effect take it over after getting her mail there for two years? Maybe it won't happen, but stuff like that happens all the time in NYC.
The rent laws you espouse are flawed and do not protect the poor. They allow people like the man I quoted above to take advantage of a system that forces people like myself to foot their bills. Believe me, most of my rent stabilized tenants are just like that guy. Why do you insist on defending his great deal? What did he too to deserve to live his life in a privately subsidized apartment?
here's the article if you want to read it . . .
http://www.nytimes.com/2007/03/29/garden/29breakers.html
You're right that the current laws allow it and most landlords knew the laws when they bought their buildings. But that's not the issue. Do you agree with everything the city does just because they do it? Come on, the rent laws are complete BS, and if you had to put up with the BS I do, you wouldn't be arguing otherwise.
Posted by: Jake the Snake at April 2, 2007 8:58 AM
I am the potential landlord and I am the last person you can accuse of not caring about poor people; half my life has been spent volunteering for some program or another. My problem is tenants that take advanatage of the system and have landlords that are supporting them. Is it justified that a landlord pay the electrical, water and gas bill for tenants that keep the apartment and building filthy; move all their families in; and still pay $50 a month? Anyone who purchased a rent controlled building did not sign up for this. There is no way that one could tell the real estate market was going to move in this direction 40 years ago. In addition, let me clarify, I have no intentions on converting to condo or luxury apts - I actually despise that idea. I just want to convert from slum to livable space for middle income people, like myself. What is wrong with that? Why can't I try to make a better life for my family? Why shouldn't my child be able to attend private school? I live in and love this neighborhood.
Posted by: nycmoe at April 2, 2007 4:36 PM
NYCMoe,
I understand exactly where you're coming from. It's a really tough situation to deal with. Luck plays a big part in it. Some folks are willing to move out for a reasonable amount of money, while others won't even discuss price or moving out at all.
If this is your first forway into NYC rent regulated real estate, I wish you lots of luck.
You'll definitely need it if you hope to turn that building around and make it profitable.
It's taken me 10 years to turn around my properties and they're still about 50% rent regulated. In the meantime, the city has jacked my property taxes up 1000% (that's right one-thousand percent) so it's sort of a catch twenty-two situation.
It's not easy, it takes deep pockets, lots of patience, and considerable luck to make it in NYC real estate these days.
Posted by: Jake the Snake at April 2, 2007 5:06 PM
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