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February 12, 2009
Rent Controlled Tenants
I'm thinking of buying a multifamily and converting it to a two family. I'll be purchasing it with a friend whose family will occupy the other unit. Does anyone have experience with the process. It's not an SRO but it does have a couple of rent controlled tenants. Any guidance on the amount of time and cost to get the place vacated? I can't make these guys rich by paying them off since I'm putting pretty much all the assets into the purchase.
Comments
Wow, HFB maybe you can nail the windows shut and pump some poison gas under their door.....no fuss no muss..
Posted by: taffeydollar at February 12, 2009 1:38 PM
Read the current news at all????
Posted by: daveinbedstuy at February 12, 2009 2:15 PM
You're gonna make them rich or yourself poor. Don't forget the fact that you are getting a bargain on the purchase price since the presence of stabilzied tenants is factored into it. If these tenants were easily gotten rid of, you can be sure the prior owner would have done so before selling, as he could get a lot more for the property.
Where's hannible when we need her?
Altho I think you can get rid of one by saying you need the space for yourself. Can't get rid of the other for your friend tho. Anyway you need a real lawyer.
Posted by: denton at February 12, 2009 2:24 PM
Appreciate the helpful comments...
Posted by: Hot For Brooklyn at February 12, 2009 2:25 PM
I think the comments *are* helpful, dude. Consider it a summary of public opinion.
There was a case in the East Village where someone got away with it, they converted a massive tenement into a private mansion. It was an obvious ploy to get rid of the rent regulated tenants, but they won. I don't know how to point you to that story, though.
Posted by: serpentor at February 12, 2009 2:30 PM
I expected that I would have to facilitate the process somewhat but need to get a better idea of options. I have an acquaintance on the UWS whos holding out on her rent controlled apt that she's had since the 50's and she wants a buyout of a cool million. This is while she enjoys the weekend house in East Hampton and the large investment portfolio which is still very substantive.
I have neither the resources or inclination for that kind of problem. One of the tenants is legit and I would probably be willing to do more. The other is similar to the UWS gal and I wouldn't ante up butkas for him. Just looking to see if anyone had experience with what tenants are looking for.
Posted by: Hot For Brooklyn at February 12, 2009 2:36 PM
If both the OP and his friend are on the deed then they can give the renters the old heave ho. Might take up to a year, it's hard to get the wheelchairs, hospital beds and iron lungs out.
Posted by: mod squad at February 12, 2009 2:37 PM
fyi --
This is about 4000 sf. Not a large tenement. My friend and I will each end up with about 2000 sf each. Hardly mansion territory.
Posted by: Hot For Brooklyn at February 12, 2009 2:38 PM
Got RAID?
Posted by: taffeydollar at February 12, 2009 2:54 PM
See also the later post on exterminating mice...you just have to scale up and those pesky, unsightly freeloaders will be gone in a jiff, biff!
Posted by: taffeydollar at February 12, 2009 3:17 PM
Taffy thought I'd use Sarin instead. Understand it's a little more painful. Wanna come over for some fun?
Posted by: Hot For Brooklyn at February 12, 2009 3:27 PM
Heres the East Village story
http://curbed.com/archives/2008/06/16/east_village_mansion_battle_no_neighborly_chitchat.php
Posted by: jasetheace at February 12, 2009 3:36 PM
You need to distinguish between rent stabilized and rent controlled. This is going to cost you big, either in payoffs or in attorney's fees. Your comments about not wanting to make them rich reveals a misunderstanding of who has the upper hand in this struggle. From your tone it is not clear to me that you fathom the scope of this. Are you looking for an attorney's name? Because I think you really need to consult with one, in the same way you would consult with a structural engineer.
Posted by: Putnamdenizen at February 12, 2009 3:45 PM
HFB, See that wasn't such a big jump.
Posted by: taffeydollar at February 12, 2009 4:07 PM
Putnam thx for the comment. I do not know what I am up against. That's precisely why I asked. The realtor was saying "no problem" if it's going to be owner occupied. Take about 6 months for the paperwork to go through.
I was hoping to get a quick temperature read to see if I had the fortitude to engage an atty. Actually both rent stabilized. Trying to get an idea of the number of zeros in what it costs me....
Posted by: Hot For Brooklyn at February 12, 2009 4:10 PM
Falls under 'if you have to ask the price' then you can't afford it. Realtor is FOS. Putz is right.
Legally you can probably get them out if you take the space for yourself. But not only will it cost you, do you have the stomach for what will be a truly nasty fight? Especially if you are living there while trying to evict?
Posted by: denton at February 12, 2009 4:16 PM
You have an even bigger problem than you think. There is pending legislation in Albany that looks like it will pass. (check the recent NY times article about it) It will make near to impossible to get rid of rent controlled tenants in order to take a space fore the landlords personal use. The current law, which allows this and is what happened in the East Village, was one bit of leverage owners had to make tenants more reasonable about leaving with a buy-out.
Also, do you know the ages of your tenants. Approaching 62 is a big, big problem, as after that they can stay indefinitely whether you want them to or not.
Good luck. You will need it.
Posted by: homey at February 12, 2009 4:18 PM
The realtor is out and out lying to your face.
Posted by: daveinbedstuy at February 12, 2009 6:19 PM
On my block the word on the street was that it cost 75K payoff to get a stabilized tenant to move out. How she raised 5 kids in less than 900 square feet I'll never understand.
She took the money bought a house in Florida. This was in '04 or '05 I believe.
Posted by: phripley at February 12, 2009 8:07 PM
your realtor is a bald faced liar..you will be lucky to get them out within 2 years and will be branded as the rich scum who threw mrs nicely out in the street...find another house
Posted by: eman1234 at February 12, 2009 8:21 PM
We bought a 3 family in Carroll Gardens with one unit rent controlled. The tenant agreed with the prior seller to 100K and offered (and continues to offer) the same deal for us. We haven't pursued it yet because I don't have the cash right now and frankly, like the lady. That is a hard data point for you though.
Posted by: Colonel at February 12, 2009 8:44 PM
thanks all
Posted by: Hot For Brooklyn at February 12, 2009 8:49 PM
I have done exactly what you propose, though it was years ago.
You cannot combine units. If the house is a legal 4, for instance, then your co-owner can pick one apartment (one of the RC's). You would do the same, but the form of ownership is critical. I forget if it tenants in common or joint tenants.
Though you are supposed to prevail eventually, it will take multiple years. Expect initial rulings against you from HPD, but you have to appeal multiple times.
Obviously discovering that a tenant owns a dwelling elsewhere is an easier route to dislodge etc.
Even when you win, they will be given some time more to (all the sudden) find another place. This is when some thousands can expedite (because you won the appeal).
You have to charade in court - look poor but neat. Justice is blind, but every little bit helps.
Richard Bush on Court St. used to do these.
Posted by: brucef at February 12, 2009 11:17 PM
Shame on the realtor!
Posted by: vanburenproud at February 13, 2009 7:19 AM
Like everyone has said, rent control is a hassle. The broker is an ass.
If you're lucky it'll take 3 years, a lot of money and legal wrangling, and possibly half your sanity. If you're not lucky 3 years and your sanity will look like a day at the beach.
Avoid dealing with RC buildings, not worth the nightmares.
And Colonel, you have a RC tenant in a 3 family? I thought RC/RS was only in 5 unit and above property?
Posted by: christopher at February 13, 2009 9:18 AM
Christopher, the general and short answer is that an apartment occupied by
a tenant continuously prior to July 1, 1971 in a building built before February 1, 1947 would come under rent control, including rentals in 2- and 3-family buildings. Specifics can vary, and maybe do in Colonel's case.
Posted by: vinca at February 13, 2009 10:07 AM
I agree with Christopher. Also be aware that if the City gains control of these regulations, which may happen, you will be completely screwed. As for the broker ask him to escrow his commission until the property is vacant, see if that's "no problem"
Posted by: edifice rex at February 13, 2009 10:44 AM
Vinca, thanks for the clarification. I've only ever been involved with "commercial" (5+ units) properties.
I always thought the 4 and under got a pass on the RS/RC bit. Guess I'm not alone then ;)
Posted by: christopher at February 13, 2009 11:35 AM
RS/RC is vastly different. Having spent yearsin a rent-stabilized apartment I know that RS has far less protection than those in rent-controlled apartments.
Not all rent-controlled tenants are rich enough to afford houses in the country. Many of them are elderly and barely hanging on. And while the rent controlled tenant with the weekend house is an ass, the comments about extermination and sarin gas are truly disgusting.
Posted by: bxgrl at February 13, 2009 12:02 PM
Bxgrl, you're looking at it all wrong. You're assuming that these posters are so wealthy and above you that they can consider thinking about this issue in ghoulish, holocausty terms.
It's probably more like the opposite. When I read this post, it scared the crap out of me and made me think immediately of the "mice thread" ***because*** I am probably not that different economically than you--I don't have very much money, I am just really weird about saving it, and really wanted a house.
I am also terribly gullible, and can easily imagine myself believing this douchey realtor. And if I lost a year fighting to evict RC or RS people out of my house that I intended to live in, and had to pay this kind of lawyer's bill, I would be literally bankrupted. I would have to walk away. Many people would.
It's more appropriate than you think to reach for the gallows humor. I am not a bad or too-rich or otherwise empathically impaired person, and I went there immediately because the story is legitimately threatening.
Posted by: vanburenproud at February 13, 2009 1:24 PM
vanburenproud- sorry- that's no excuse. I have no problem empathicizing with the problem but except for a few words about the lousy Realtor most of the commentary was directed at the tenants. Obviously landlords think tenants are the dregs of the earth, even tho' they need them. Of even more obvious is the immediate demonizaton of anyone who lives in a rent-control or rent-stabilized apartment.
OP has not bought the house yet, has not yet speoken to a RE lawyer, has not determined all the facts and it seems nearly everyone doesn't understand the difference between rent-controlled and rent stabilized. And don't think that getting kicked out of your apartment doesn't financially ruin renters either. It cost thousands.
Sure the story is legitmately threatening- and take it from me, tenants don't feel so reassured either. If I ever said something like exterminate my landlord or I want to use sarin gas on them, you all would be screaming.
Posted by: bxgrl at February 13, 2009 2:36 PM
And i meant to add, anyone who wants to buy a house and posts on a blog asking for this kind of advice before speaking to a RE attorney is serious shark fodder for sleazy RE agents. As you can see- everyone posts with varying degrees of knowledge- except for the moron whose idea of useful advice is to pump poison gas under the door. Only another jerk would take his advice (still want to use rin gas, OP)?
Posted by: bxgrl at February 13, 2009 2:55 PM
The first comment was obviously satirical. Hello?
Posted by: mopar at February 13, 2009 3:17 PM
That's not what i call satire. More like wishful thinking on his part.
Posted by: bxgrl at February 13, 2009 3:23 PM
Bxgrl, I am not going to argue with you.
I tried to point out that the joking you found offensive was likelier a product of fear than class. You don't care to empathize--you'd rather grind an axe. Whatevs.
You can come to this forum and prove your Landlords Are Evil thesis all day and all night because this forum is not real, because the people on it appear as disembodied white blocks of text, because people say dumb shit when they are scared and anonymous, because even when you're coming from a good place it's hard to write something thoughtful in such a tiny white box.
But for goodness' sake... the existence of some lame-but-contextualized joking about exterminating tenants on a semi-anonymous internet forum is such lame evidence that tenant/landlord relationships are inevitably a classist Us v. Them standoff.
And that is what you are here to prove, isn't it?
Why are you aiming so low?
Finding fault and crying foul in this format
(which seems to me to sometimes mingle the worst parts of being with people with the worst parts of being alone)
is too fucking easy--it's shooting fish in a barrel.
Quit screaming j'accuse and go use that energy fighting actual injustices.
The world is full of them, and we need all hands on deck.
Posted by: vanburenproud at February 13, 2009 3:27 PM
I think this is a reasonable place to start to get your bearings, even if what you get from the forum is a lot of hot air about nerve gas and the distinct impression that you are going to need a lawyer either way.
Here's the Times story on the East Village place:
http://www.nytimes.com/2008/06/15/nyregion/15evict.html
I think it does give you a picture of what you could be up against.
Also take a look at the DHCR fact sheets on owner occupancy:
http://www.dhcr.state.ny.us/Rent/FactSheets/orafac10.htm
Elderly and disabled tenants get special protection and usually, you can only take one apartment, and then only if you're the owner in name (not the person who controls the LLC that owns the building). I navigated this seven or eight years ago -- my LL was bs-ing me. He clearly had no intention of moving from his house in Jersey to my studio apartment in Greenpoint so I fought it until I got a buyout that made it worth my while to leave. I'm over simplifying my story, but I'm also saying: read up.
Posted by: serpentor at February 13, 2009 3:29 PM
also, regardless of age of RC tenant and/or number of units and/or reason that you want the apartment, you CANNOT evict a RC tenant who's been the primary leasee of the apartment for 20 years. unless, i imagine, they don't pay rent.
ask them for a number first. guarantee they're looking for six digits. and as a previous poster already mentioned, do you want to be the guy on the block that threw out the old-timers?
lastly, that E 3rd St. thing in the village took about three years to play out. the family who did it not only had gobs and gobs of money, they're also real estate magnates with NO scruples.
can't you make 4000 square feet work without chucking the old folks? 2000 square feet isn't mansion territory, but jesus man, that's like twice the size of most 3-bedrooms in the Slope.
Posted by: chuck at February 13, 2009 3:31 PM
vanburenproud- this whole thread, before I posted was about people grinding their axes. About tenants. So how is this my fault for pointing it out? And for someone who doesn't want to argue, you certainly are getting personal. Far from me making this an evil landlord/I have an axe to grind, seems to me you are offended that your lame attitude wasn't appreciated by me. In fact, if you ever bother to read other thread on brownstoner you would have seen several posts where I said many tenants do take advantage of landlords and that I was against the new rent control bill they are trying to pass because I don't think its fair to landlords.
But go ahead, Make an ass of yourself by putting words in my mouth and defending jokes about poison gassing tenants.
I find it offensive. And I'll continue to speak out on it- because I think that's a more ethical stance than making excuses. People who make excuses for stuff like that are usually the ones who stand on the sidelines when others get hurt.
Posted by: bxgrl at February 13, 2009 3:46 PM
I actually never made any jokes about gassing anyone. I merely empathized with those who did. I understood the joke.
You are taking something complicated and trying to make it simple. And yes, that behavior does offend me a little, just because the world is a complex place and suffers when it's simplified. Humor is complex. Fear complicates behavior. Right and wrong are often entertwined. Sometimes the Have-Nots have more power than the Haves. It's good to see things in their entirety.
That's why outrage is often not the "ethical stance" you think it is. In this instance, I think that understanding everyone's point of view is an "ethical stance," and that outrage is a distancing tool--that it merely reinforces a pre-determined conflict.
Go ahead and do that if you want, I can't stop you.
But I think it's really too bad that you're not accomplishing what I do sincerely believe you want to accomplish. I think it's too bad to see such wasted effort.
I mean, you and I are actually on the same team, and yet you are really vigorously picking a fight with me.
And *I* am the one making an ass out of myself for putting words in *your* mouth? You're the one accusing me of making jokes that I didn't even make.
Get some fresh air.
Posted by: vanburenproud at February 13, 2009 4:51 PM
The vitriolic response of most seems to come from the sentiment that it's their property, dammit and they have the right to do with it as they please.
If OP would look at his prospective house as having been a business, with people depending on its continued existence, maybe he would see it differently. It's better for him to find another property without such an encumbrance, just as it would be better to factor in the RC/RS tenants when one is buying such a place. I'm sure there are *some* landlords willing to accept a lower return for a cheaper property. Or maybe I'm being naive in this capitalist mecca.
Posted by: cmu at February 13, 2009 4:59 PM
We can argue all day about the merits of rent control, but the issue is really purchasing a property at its market value. You can buy a vacated property at market value. Or you can buy a property of similar size and condition with one regulated tenant and get it cheaper. And if it has 2 regulated tenants, it's cheaper yet.
Hot for Brooklyn, if you don't want to pay your tenants enough money to make them want to leave, you should buy a vacated property. Whether or not the payment makes them rich is irrelevant (if they are legal tenants).
In my opinion, the only reason to buy a cheaper house with a tenant is because you are willing to live there along with the tenant for a long time. I don't think the cost/time/hassle to get rid of the tenant is ever worth the reduced price. Unless you are willing to act in an unethical manner and essentially drive the tenant from his home, you need to pay the going rate for vacating the place. And frankly, if that rate was low, the seller would have bought the tenant out before selling so he could get alot more money for the property.
This doesn't mean the rent-controlled tenant does not have the obligation to be a courteous tenant and pay rent on time, but if you are willingly buying a discounted home with a tenant, you have to accept that the tenant has the right to stay, or pay enough to have him willingly move somewhere else.
Posted by: CGfan at February 13, 2009 5:56 PM
To clarify, the OP's question was a little naive, and TaffeyDollar was pointing out, through the use of satire, that trying to evict rent controlled tenants is not a nice thing to do. He was not in fact advocating the use of poison gas on tenants. He was arguing for fair treatment of tenants.
Perhaps you've heard of Jonathan Swift's "A Modest Proposal"?
Posted by: mopar at February 13, 2009 6:12 PM
vanburenproud= you really need to read stuff, not extrapolate. I never said you made those jokes. i said you were making excuses for those who did. Actually, I said there was no excuse, since I am entitled to disagree with you- which seems to be interpreted by you as me picking a fight. i assure you i am not. And i did not.
You accused me of having an ax to grind, or having a landlords are evil theory to prove. I really suggest you read some of what I've posted re landlords in the past and you will see just how wrong you are on that score. trust me- I do see both sides of the landlord/tenant issue and that wasn't the point of my complaint (which you seem to mot understand). My point was the over the top comments on how to get rid of tenants- maybe you would be less tolerant of sarin gas comments if you'd been in a terrorist attack. Nor should you assume because I am outraged by those comments I don't put any energy into something productive- in fact I've spent the last 7+ years doing just that.
Posted by: bxgrl at February 13, 2009 6:23 PM
I was in a similar situation many years ago when I was purchasing my first house. I wanted to purchase a 3 family in the S Slope with a R/C tenant on the 3rd floor. The building was beautiful. The price was cheap (it was 1996, and things could be had cheap), but the top floor R/C paid 150 a month, and wasn't about to leave. I consulted a lawyer who worked for the city and handled housing cases. His advice to me was this: walk away. Housing court judges in Brooklyn are notoriously pro-tenant and they have more jurisdiction than you care to acknowledge, They can deny your wish to take over the apartment and worse. This is the legal fact not the ethical problem....one doesn't have to do w/ the other. R/C has many more rights than you realize. You can't just kick them out if you want to live there. Owner occupied is not a free pass to evict a R/C tenant. Look at the court rulings in Brooklyn which is a different court than Manhattan. I think you will decide to walk away. There is no free lunch ethically or otherwise. Good luck
Posted by: brooklynschool at February 13, 2009 9:21 PM
As mentioned, they are both rent STABILIZED. This page may be helpful to you.
http://www.coopersquare.org/res_personaluse.html
Also, don't try and bullshit on this stuff. I know someone whose landlord claimed he needed an apartment for his father (wanted to avoid paying his tenant to move). A private detective found out that this parent was in a wheelchair. Oh yes, it was totally logical that he was going to want to live a few flight up in a walkup with no elevator! So of course, the landlord looked like a total sleaze and had to pay quite a bit.
And never take the agent's word on this. Seems obvious, right?
Posted by: Carol Gardens at February 13, 2009 9:58 PM
Bx gurl get over it.
The tenure of the question made others react as if the tenants were rodents. Call it sarcastic humor. I digg it, You don't, point taken, now move on.
CGfan nailed the question in my opinion.
Its obvious this property is too hot for Brooklyn.
You dont want to start any real estate purchase with mayor legal and personal drama. Buy vacant. Pay more. Safe more.
Posted by: dutchman at February 17, 2009 2:34 PM
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