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July 31, 2009
Breaking Lease to Buy?
I rent a one bedroom in Brooklyn and have 5 months left on my lease. I found a good deal and decided to buy a condo that will close within 2 months - that means I'll have several months left on my lease. I'm considering giving my landlord notice when I have a firm date of closing and paying that month's rent and forfeiting my one month's security if they release me from the remainder of the lease. Is this a fair situation? My landlord added a clause to the lease rider that doesn't allow sublets. What are my options?
Comments
You always have the right to sublet, per NYC law -- regardless of any rider the landlord may have added to your lease. A legal sublet has to go through your landlord, however, and there is usually a surcharge added to the rent of 10%.
You didn't mention if you live in a big building or tiny one, and that could make a huge difference. I'm guessing small-time landlord, since he added an illegal rider to your lease.
Closings sometimes take longer than people say. If I were you, I'd wait until you have a firm closing date, and then talk to your landlord. If he's reasonable, he may allow you to walk away without penalty since you'll be giving him plenty of notice to find another tenant. And it's only a couple of months anyway. If he's a jerk about it, tell him you know the law and will find a subleter. You should also google up a copy of the law, it's probably somewhere on nyc.gov.
Good luck!
Posted by: Kris at July 31, 2009 10:32 AM
Although that's not exactly what you're supposed to do, it's pretty commonplace to do what you're describing. Is it a big building or a smaller landlord?
Bigger landlords will typically just go for this because it's less of a headache for them. In an up market they make money on this scenario, in a down market they don't usually lose much if anything (especially since many buildings are still rent stabilized and they can raise the rent a small percentage for the next tenant when the unit becomes vacant).
If your landlord is a homeowner in a 2-3 family house it's going to be a bigger deal for them to find someone to take over the lease. Theoretically you are on the hook for rent for the remainder of the lease if they are unable to find a new tenant in that time.
Posted by: setancre at July 31, 2009 10:39 AM
Closing dates are really iffy so I wouldn't commit yet no matter what you've been told. I would start a dialogue w/ the LL - esp. if it's a small bldg. You've had a relationship w/ him so maybe you can build on it. If you have a subletter in mind, maybe you can begin negotiating w/ that person about taking the place permanently? If you help the LL fill the vacancy he'd be more likely to be flexible.
Posted by: Arkady at July 31, 2009 10:40 AM
If you have a good relationship with him I would talk to him as soon as you get a firm date.
My old landlord was awesome. My lease ended in February one year and he let me stay on a month by month basis until I closed on my new home. By the time I left (3 months later), I found a tenant he liked that took over the unit immediately after I, with little effort from him (just basic cleaning and paint touch ups, no reno). I know this is unusual but it not impossible.
Posted by: crimsonson at July 31, 2009 11:01 AM
"I found a good deal and decided to buy a condo..."
You're no goat. You're a sheep. Just kidding. Don't know the specifics.
"Is this a fair situation?"
No. A lease is a lease. In the midst of this rental crash, it makes sense for your landlord to fight you for the balance. In past times he would have been delighted to get you out and raise the rent.
"What are my options?"
If your offer fails and the purchase "deal" is THAT good (I doubt it) then it may be worth (to you) ponying up the balance.
But shut up (to landlord) about the purchase! Make something else up (economic woes).
***Bid half off peak comps***
Posted by: Brownstones Half Off at July 31, 2009 11:11 AM
...yeah, you may never make it to close in this environment (would probably be a blessing). 20% down?
***Bid half off peak comps***
Posted by: Brownstones Half Off at July 31, 2009 11:12 AM
Ask first and if the LL says no, offer to advertise and show the apartment yourself and find him a replacement that's at least as financially qualified as you are. If you make it easy for him he may go for it. That's what mine did when I was in this situation and it worked out nicely for everyone.
Posted by: zgori at July 31, 2009 11:26 AM
I guess a "deal" is relative. I'm a first-time homebuyer and it's a place for me to live and I find it reasonable.
As for my rental - it's a 5 unit building and the landlord lives in the neighborhood.
I agree a lease is a lease - but as a buyer, you can't time your rental lease with closing perfectly.
Posted by: goat at July 31, 2009 1:07 PM
Kris, you don't have the right to sublet. You have the right to have roommates. In that case, you have to live in the apt at the same time.
Posted by: mopar at July 31, 2009 2:13 PM
Even though you would technically be breaching the lease the landlord has to mitigate his or her damages -- meaning that they would have to make reasonable efforts to find a replacement tenant rather than just sitting on the apartment and going after you for the full rent. When you are sure of your move-out date you should speak to the landlord and see what you can work out. If they find someone quickly without large expense you may be able to get most if not all of your security deposit back.
I strongly caution you against premature notification to your landlord, based on personal experience. When we went into contract on our house, the seller said that he had a very quick time frame because he needed the money to close on the house he was going to move into. Based on this, we told our landlords (owner-occupants in a six-unit building) right away. We banked on giving ourselves an extra few weeks on the lease to allow for us to do some work in the house before we moved in. The landlords found replacement tenants immediately, and everyone was happy.
Then the scary part happened. The seller's attorney canceled the closing date through a call from his secretary without explanation, and became incommunicado. It turned out that the sellers of our seller's new house had been delayed in their move, which was creating a domino effect. This became extremely stressful as we had no idea when we would be able to move into the house, didn't know if we'd need a sublet or for how long (and would have had difficulty finding one because we have a dog), and were somewhat concerned that we were going to end up losing both the house and our apartment, which we loved. At the end of the day, our landlords were great and the new tenants were able to put off their move for a month. We did have to put all of our things into storage and stay with friends for about a week, which our landlords needed to prep the apartment for the new tenants. We and the sellers moved the same day; I didn't get over my anxiety until I saw their moving truck outside the house. All in all I think paying a couple of months extra rent would have been worth it to avoid this stress, but of course we did not have a lot of extra cash at that time.
Posted by: supersleuth at July 31, 2009 2:25 PM
You do not have the right to sublet and landlords are no longer required to mitigate damages. I would let the landlord know what is happening and offer to work with him in finding a new tenant, either yourself, or with brokers and maybe negotiate a monetary amount. I had this situation with a tenant in one of my buildings that just signed a lease in February for one year and than in June, her job said she had to relocate to California immediately. We negotiated 3 months rent and I let her out of the rest of the lease. I find that most landlords are willing to work with tenants in this situation. It gets sticky if it is an apartment that is difficult to rent or if the market rent has gone down, a negotiated monetary amount usually finalizes a deal. It is a real hassle to take the tenant to court, it is time consuming and costly, so you should be able to work something out.
Posted by: broker at July 31, 2009 3:03 PM
broker - It is my understanding that landlords are not required in Manhattan and the Bronx to mitigate, but they are required in Brooklyn. are you referencing something new? when did this change?
Posted by: goat at July 31, 2009 3:27 PM
Closing dates can be a bit illusive. Also it's MUCH easier to paint and do other work before moving in. You might need every one of those five months left on your lease.
Posted by: Bob Marvin at July 31, 2009 3:30 PM
I still say that you DO have the right to sublet, per NYC. Here's a link:
http://www.housingnyc.com/html/guide/basics.html#Sublet
Posted by: Kris at July 31, 2009 4:15 PM
PS - the only way you do NOT have the right to sublease your apartment is if you live in a building with fewer than four rental units.
Posted by: Kris at July 31, 2009 4:19 PM
Your mortgage company may require a letter from your landlord as to whether you've been timely in your rent payments.
Posted by: daveinbedstuy at July 31, 2009 4:30 PM
thats a rent stablization company...
Posted by: slick at August 1, 2009 12:55 AM
kris-
try gov not com for city law/guideline reference.
Posted by: Brooklynchimp at August 1, 2009 2:38 PM
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