Legal questions about closing on a property that has renters
We have an accepted offer on a place that has tenants currently in it, and all of their leases are up in May 08. We are planning on taking over the space for 2 of the units (2 sets of tenants currently reside.) However, I just spoke to a lawyer and he was pretty discouraging…
We have an accepted offer on a place that has tenants currently in it, and all of their leases are up in May 08. We are planning on taking over the space for 2 of the units (2 sets of tenants currently reside.)
However, I just spoke to a lawyer and he was pretty discouraging about this idea. He said that tenants don’t have to vacate and then we’d have to go to court to evict them and that would of course cost money and time. But does this mean that most people will NOT buy a property if there are current tenants in it, unless they plan on using it solely as an investment property (and not living there themselves when people vacate)? Seems strange to me given that most brownstones are occupied at time of sale, but I’d like to get some laypeoples opinions on this. (Maybe the lawyer is overzealous).
Secondly – and this is a bigger problem – one of the units that is currently occupied has residents that are illegally residing in it, b/c they are living in bedrooms in the cellar. The tenants I’m sure are unaware that this is illegal space but the owner I’m sure is fully aware of this.
Is there a way to protect ourselves against the liability associated with renting out illegally for the time between close and when their leases expire? Any thoughts would be appreciated. We are not planning on using the space illegally once the current tenants are out of it. But we cannot evict them of course b/c renters have the right to stay through the term of the lease.
Any advice would be much appreciated – thanks!
I’m 9:04, and I wasn’t tenant-hating. I was providing a rational opinion to a potentially complex set of issues.
As a landlord, it is my moral and legal obligation to understand that this is about where my tenants live. I provide an excellent apartment, take care of issues quickly, and am courteous and professional. I’ve never had a problem with a tenant.
I think that this is true because it’s easier to take care of others when I take care of myself. I charge enough rent to cover my expenses. I screen prospective tenants thoroughly. And I don’t enter complex legal relationships with people who I haven’t chosen, who might feel entitled to more rights than is reasonable, and who were there before me.
My point is that tenant law in NYC is, rightfully, pro-tenant. And so to not protect yourself, particularly in a house that is also your home, is to invite problems that can be avoided.
There are surely other ways to prevent these problems. CMU, since you have not had a problem with inherited tenants, perhaps instead of calling me a “hater” you could share what exactly you did to avoid problems when inheriting tenants.
The tenant-haters have chimed in. The milk of human kindness continues to flow freely through this site.
Yeah, as 9:04 says, not a good idea to fight with tenant your neighbors love. Get someone else to throw them out. Not your problem, is it?
Why assume that your tenants will cause trouble? The vast majority do not. How different is it to deal with inherited tenants as opposed to those you’ve just met for 15 mins? Not much. Unless of course, you’re buying a crack house.
Fwiw, I’ve bought 2 buildings with tenants and neither was a problem, in fact they were both good experiences. But I’m in the minority here.
It is extremely naive to keep tenants, and it should be avoided at all costs.
You are planning on living in this new neighborhood, in your new house, for a long time. Pre-existing tenants are a major unknown.
Best case scenario: tenants are nice people and so are you, and everything works out okay.
Worst case scenario: tenants are good people who behave badly with you. This can happen for a lot of reasons–because you are a firsttime landlord and look exploitable. Or perhaps because being in the house “first” gives an existing tenant a sense of entitlement that isn’t rational. Or just bad chemistry, or bad circumstances. A lot of weird things happen when you buy a house–you discover it. Something could happen that your existing tenant has expectations about, and that you don’t handle the same way the last landlord did, and this could cause a conflict just because expectations cause conflict. And you could be exhausted from buying the damn house, and deal with the conflict badly.
And then you’d maybe have to fight with the tenant. In your house. In front of a whole block of people who don’t really know you yet, but have known your tenant for years. And love her.
Landlord-tenant is a power relationship, and like all power relationships, it is not as straightforward as you’d think. You are depending on these people to be sane and pay rent, and that makes you more vulnerable than you’d think. I’d keep that in mind!
This is not the kind of market where you can’t choose your own tenants after you’ve moved in.
A second recommendation for Marc Aronson. He helped me with a tenant issue, he is efficient and fast.
OP here- thanks Donatella! You have provided a lot of useful advice- I really appreciate it.
Call Marc Aronson on Smith Street. I haven’t met any “nice” tenant landlord lawyers but this guy has been around and is very knowledgeable and will consult with you.
He was recommended by my closing attorney.
OP here again- does anyone have any recommendations about a reputable tenant landlord attorney?
OP here- all very helpful information! We are new to this and are now clearly experiencing the “you get what you pay for” adage!
Anyway, we are still very interested in this property so we’ll try to work it out with the seller so he can sell at with vacancy at least in the duplex unit (with the illegal renters). If it doesn’t work out, so be it and we’ll move on (though admittedly a little sadly since we were really excited about the place). In any event, we don’t want to assume the risks and liabilities of illegal renters- even if they do move out 4 months after close per their lease terms.
Thanks again for the wealth of advice!
I wouldnt buy a property with tenants in it, too many complications. The landlord can buy them out like alot of them do.