Removing Rent Stabilization?
Hello, I purchased a Brownstone a few years ago that has ten units including my own. I rent the nine (Class B) on the upper floors while living in the only Class A, but it is an absolute nightmare. They are all SROs and the building is Rent Stabilized. I finally acquired a Certificate of…
Hello, I purchased a Brownstone a few years ago that has ten units including my own. I rent the nine (Class B) on the upper floors while living in the only Class A, but it is an absolute nightmare. They are all SROs and the building is Rent Stabilized. I finally acquired a Certificate of Non Harassment a while ago after an epic battle with HPD. However, ever since the beginning it has been a constant war with my tenants who are impossible to evict with the regulations, and I am tired of the struggle. What I am looking for desperately is someone who can tell me how to remove Rent Stabilization. I see from the definition that it applies to buildings built between 1947 and 1974 and that have “six units or more”, and I was wondering if I were to convert the nine units that I rent down to five or less, would that remove the Rent Stabilization? If not, is there another way? Someone please help! Thank you.
Minard & kens, we had no problem get the marshal to come in and change the locks and put an eviction notice on the door of a shareholder in 90 day arrears…it would have happened except a renegade board member went and told the person the night before, so she went to housing court first thing in the morning and got a stay. Of course this was just someone who was perpetually late, not someone who stopped paying altogether.
Minard, we just finished a successful eviction of a real estate lawyer after six years of battle….chest pains wait period of 3 months included and so is the fight with social workers at the department of aging. Marshall finally came and was totally on our side, along with the courts. Was an ugly battle but we came out victorious so it CAN be done.
Would love to share war stories with you at some point if you ever come out to a meet-up one of these days.
Most accurate comment above — “Where the hell was your lawyer?” These are questions you should have known the answer to before you bought and, as everyone wrote, hopefully you paid a price that reflected the stabilized rent roll. In any event, I wouldn’t take any action toward eviction, combining units, etc. without advice from a lawyer. Your rights are limited and you need to act, to the extent permissible, with procedural precision, or your actions won’t necessarily be enforceable. Much as I love the advice here, get real counsel and don’t rely on us.
DUH! Get Bloomberg to declare your building blighted, take it over through emminent domain, and then sell it back to you cheap.
piece o’ cake!
As the law currently stands, an occupied, rent stabilized apartment can only be removed from rent stabilization if the legal rent rises above $2,000 per month and the household income of the tenants was $175,000 in each of the previous two years, as reported on their NYS tax returns. A vacant apartment can be removed if the legal rent is above $2,000 (this can be achieved by adding 1/40th of the cost of renovations to the legal rent – you do enough renovations to get it to $2,000 then you can destabilize). Governor Paterson has proposed increasing the vacany destabilization cutoff to $3,000, but this has not been considered by the legislature yet. It is unlikely to staunch the flow of vacant units out of rent stabilization.
You can add a proportion of the cost of a major capital improvement to the legal rent of the apartments in a building, but to get them all above the $2,000 mark would be very expensive, and there’s still the tenants’ income issue.
You can decline to renew any of the leases because you want to take the entire building over for owner occupation, but you will need to establish to the housing court that you have a bonafide plan in place, i.e. architectural plans and a filing/permit from the buildings department. If this succeeds, you cannot rent any part of the building out for three years.
Don’t attempt any of this without consulting an attorney that specializes in NYC landlord and tenant law. You also need to consider whether you have the financial capacity to undertake these actions. Your tenants sound like they are well organized and familiar with the law, so they are likely to make this process very expensive.
As others have said, the price you paid for the property reflected (or should have reflected) the fact that there were nine rent stabilized tenants in residence.
Your best option is probably to be a good landlord, make gradual improvements (with appropriate rent adjustments) to the common areas, and face the reality that you are an SRO landlord.
If you don’t like the situation your only other option is to cut your losses and sell. Don’t expect to get a premium price. I know that I would never buy such a property.
MCI increase on building improvements is extremely limited and must be applied for: http://www.dhcr.state.ny.us/Rent/FactSheets/orafac24.htm
MCI increases on individual apartments are easier, and limited to 1/40th per month of the amount spent. This is rarely verified, however (I cannot tell you how many studio apartments I’ve seen with $20000 reno jobs that included several gallons of white paint and a new stove).
http://dhcrexpert.com/mci.htm
How is it possible that any lawyer allowed any client to buy something like this without knowing these things?
Cannibalism. Problem solved, one tasty tenant at a time.
raising the rent due to capital improvements is one thing, getting the tenants to pay is another. Only landlord’s legal fees must be paid on time. This game is not for the feint of heart.
The $2000 cap is only on a vacancy. A rent-stabilized tenant remains rent stabilized even if the rent on his/her apartment goes to $2000 – only after they move out does it go off stabilization. The only way around that is if the LL can prove that the tenants had income of over (I think) $175K in each of the previous two years.
But seriously, either this post is not real, or the buyer is the most naive individual on earth and had a crap lawyer. For a full explanation of Rent Stabilized guidelines from the LL’s perspective check out The Rent Stabilization Association (http://www.rsanyc.com/). And if this is for real, you should certainly get over there and join up right now, because if you keep going the way you’re going now you are courting disaster (as in getting sued by tenants).