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April 22, 2009
Buying house w/ low-rent tenan
I'm considering the purchase of a 4-family house in Brooklyn that comes with 3 existing tenants. 2 are market rents, 1 is an elderly tenant with an interesting contract made at the time the house was sold 2 years ago (all info based on seller): The right to rent her apartment for $750/month (market is ~$2500) until 4/2010. Supposedly she is the mother of the former owner, has been living in the house before, but is not rent-regulated.
I'm considering to buy the house and use the owner's apartment until 4/2010, then take over and renovate her space + combine it and the next floor into a duplex.
My question is: Is there a way to find out for sure whether she is rent-regulated or not, and - if she isn't - to make it legally binding for her to move out next year as promised or take one of the other apartments in the house at market rent. I wouldn't want to buy the house if there is a risk that she finds a legal basis to remain.
Comments
She is probably regulated under SCRIE (Senior Citizen Rent Increase Exemption).
SCRIE is a very narrow regulation, along the lines of Rent Control, but regulated differently. Research SCRIE, that'll probably be your best place to start.
I would not bank on her leaving. Get a hold of the document she signed with the current owner, see if it's a legit legal document (notarize, etc) or just a piece of paper she signed.
Regardless, I would not count on her being gone at any point, until you see the moving truck 'round the corner...
Posted by: christopher at April 22, 2009 2:06 PM
Where is the poor old lady planning on moving in 2010?
Florida?
I think you are stuck with her until she passes away at the rent she is paying $750/month
Posted by: gemini10 at April 22, 2009 2:19 PM
Sounds just like another building I saw years ago. That one was a 6 family in Park Slope. The owner was selling the building with one rent controlled tenant, his mother! Seemed to me like he was taking care of his mom on someone else's back.
Anyway, I wouldn't think of trying to remove a senior from their apartment. Very bad juju. Plus, if she's paying her rent, she will be well-protected by housing court
Posted by: bessie2 at April 22, 2009 2:37 PM
Thanks for your comments!
And please don't get me wrong: I wouldn't want to kick an old lady out of her place if she has every right to stay. I wouldn't even want to buy the house in that case.
According to the seller, she agreed with him to rent for $750/month until 4/2010 and then move to Florida. I would gladly move her to another apartment in the house at the market rent once her contract expires - if it does, which is the question.
I should probably steer clear from buying this property if it's doubtful that the law would be on my side.
Posted by: tobikun at April 22, 2009 3:34 PM
The law is not on your side. As a landlord, you are presumed guilty until proven innocent. In housing court, the judge will find in favor of an elderly tenant no matter what the facts of the case may be.
Having an agreement with the tenant is only as good as her willingness to abide by the agreement. If you have to take her to court to get her out, you will loose. There are a million and one technicalities that will allow them to let her stay.
Do not buy this house if you expect to occupy this space. It can cost you $1,000's and years of aggravation to get her out and even then you will probably be stuck with her forever.
Posted by: JoeBushwick at April 22, 2009 4:48 PM
Buy it! and I hope that elder lady lives to be 150 years old you greedy egotistical bum.
Posted by: hannible at April 22, 2009 7:27 PM
I don't know much about SCRIE, but if you're really interested in this house I'd talk to a lawyer--probably someone who specializes in elder law--before giving up on it. The key question, imho, is if signing a contract promising to move on a certain date violates a right she'd have to stay if protected by SCRIE. Generally a contract that dilutes or eliminates the protections people have by law is unenforceable.
Posted by: Iris at April 23, 2009 9:50 AM
Echo the previous posters--the legal status of the contract notwithstanding, if she decides to stay you have little expectation of getting the apartment, at least not without a protracted and ugly court fight. If you must have that space, pass on this deal.
Posted by: basementalist at April 23, 2009 10:14 AM
It should be on record if that apartment is rent-regulated, at the DOB. I am not sure what the laws protecting elderly tenants are but if the apartment is not under rent-regulation there are a couple of questions you can ask.
1. Does her contract with the former landlord restrict you to that rent for the length of the contract? It sounds like the seller is trying to make keeping to that contract part of the sale. Whether or not he can legally make you to abide by the contract- since it seems to be a personal agreement- is the question.
2. If she stays, whether or not she is supposed to, are you allowed to then charge her market rate. If the apartment is not under rent regulation, you should be able to charge market rate- which I doubt she will want to pay.
But again- like everyone says- a lawyer who specializes is the person to ask. We're just conjecturing.
Posted by: bxgrl at April 23, 2009 1:06 PM
1. Most houses under 6 are not rent regulated.
2. If a tenant has a lease you are buying subject to the lease. Unless the tenant is rent regulated(which would be unusal for a 4 family and requires the building be registered with DHCR which it probably is not) when the lease is up you can get back possession of the apartment(even if the person is above 65 its only if the apartment is rent regulated that the special rule attaches) but expect it to take about a year to get the apartment back- no self help is allowed.
3. get an the seller to get an estoppel letter from the tenant that states.
she only has a lease through 2010.
she has no other right to the apartment.
the apartment is not rent regulated etc and what ever else your lawyer and you want in the letter....make sure it it notarized with her signature...
Posted by: smeyer418 at April 23, 2009 3:16 PM
Its the state the controls rent control and rent stabilization not the DOB
Posted by: smeyer418 at April 23, 2009 3:17 PM
Its the state the controls rent control and rent stabilization not the DOB
Posted by: smeyer418 at April 23, 2009 3:18 PM
thanks, smeyre418. I couldn't remember which agency would have the information. My brain cells die all the time! :-)
Posted by: bxgrl at April 23, 2009 3:29 PM
Discount the risk or go for a walk.
***Bid half off peak comps***
Posted by: Brownstones Half Off at April 23, 2009 3:59 PM
http://www.nyc.gov/html/dof/html/property/property_tax_reduc_scrie.shtml
scrie has nothing to do with a tenants right to maintain the apartment. Its a tax offset program but it is available for rent controlled and rent stabilized tenants only.
Posted by: smeyer418 at April 23, 2009 4:39 PM
http://www.dhcr.state.ny.us/Rent/
State rules on housing.
I looked to see if there was anything about seniors and couldn't find any. I know there are special rules about an owner in rent controlled stabilized apartments trying to get back for their own use from an over 65 tenant and special rules for an eviction condo/coop plan(existing housing) for over 65 but uncontrolled apartments none(there are also special rules for Mitchell Lama housing)
Posted by: smeyer418 at April 23, 2009 4:45 PM
http://www.dhcr.state.ny.us/Rent/FactSheets/orafac21.pdf
found it. and again it has no application unless the apartment is rent restricted under the law. ....
Posted by: smeyer418 at April 23, 2009 5:28 PM
Why would a contract between a tenant and the former landlord have any bearing unless you agreed to it in the transfer? Her only real protection is if it's rent-regulated.
Are buyers obligated to accept the terms of a rental agreement between tenant and former owner? I wouldn't have thought so, even in NYC.
Posted by: dreamking at April 23, 2009 5:50 PM
smeyer418, thanks for the detailed info!
dreamking, to my knowledge, as a buyer you have to respect the existing rental agreements and their terms until they expire.
Posted by: tobikun at April 23, 2009 6:32 PM
dreamking a contract to rent is normally called a lease. (a lease is a contract to rent real estate) It technically transfers a right to occupy a property or a part of it(an apartment) for a term (months or years or can be a life estate). It is binding on all the owners or subsequent owners here and everywhere unless it has a clause terminating it upon a sale(normally a very hard thing to get even in Pahoe Wyoming). You take the property subject to all such encumbrances on the property. Rent control and stabilization(where applicable) are also encumbrances on the property they have the added function of encumbering the remainder even after the lease expires. You of course can refuse to buy it unless its terminated but that normally means the current owner has to buy it out....not an easy thing.
Posted by: smeyer418 at April 23, 2009 6:57 PM
smeyer418- I'm curious that the OP used the word "contract" rather than lease. If this agreement is something other than a lease, would it still be binding on subsequent buyers?
Posted by: bxgrl at April 23, 2009 7:50 PM
a lease is a contract is an agreement: a contract/agreement for real estate for a period of time is a lease. It doesn't matter what it is called its the same thing. As long as it is in writing( on as much as a piece of toilet paper) and signed by the previous owner at the time the owner owned the property its is binding on all subsequent owners(assuming no fraud)
Posted by: smeyer418 at April 23, 2009 7:57 PM
I would speak to a lawyer and speak to the tenant directly.
Find out what she thinks, intends, believes her rights to be.
Posted by: Petebklyn at April 23, 2009 9:46 PM
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