Tenant Just Signed Lease Before Closing
Hello — I am closing soon on a 3-family house in the s. slope where I have lived for some time. Although we have been inching towards closing for several months (it is a short sale), the owner just wrote up a year lease for one of the other tenants, claiming that he ‘had to’…
Hello — I am closing soon on a 3-family house in the s. slope where I have lived for some time. Although we have been inching towards closing for several months (it is a short sale), the owner just wrote up a year lease for one of the other tenants, claiming that he ‘had to’ after the tenant demanded one (after not having had a lease for years). The tenant probably figured that the closing was imminent, and possibly the current owner was doing him a favor since I have made it clear that I don’t want the tenant there. In any case, am I now stuck with this tenant for another year? The apt is not RS/RC. Also, the tenant is not currently paying market rent. Thanks for your help!
Your beef is with the seller. Tenants had no duty to you. If seller undermined the property value with a sweetheart lease, the argument — not saying it is a good one legally, but just how I think it makes the most sense logically — is that the seller cost you money and therefore you need a seller concession. $300/mo for duration of lease from closing would be one way of thinking about it.
You are already looking back at the contract. Look back at the ad and any comments made by the realtor. Does the ad say “expiring leases” or something to that effect? Such representations may not be worth anything, but perhaps you can use “bad faith” as a reason to find a little play in the joints. If your lawyer is a good poker player, you may get somewhere even in the absence of actionable grounds.
How does the fact that it’s a short sale affect your options? Doesn’t it mean you’re negotiating with the bank, not the seller?
Hi UnprotectedWrecks — In this case, I would estimate that the tenant’s current rent is at least $300/mo. below recent market rates, based on a comparison of the other rents within the house. The tenant is not a local, or elderly person who would merit some sympathy in this situation – just a friend (of sorts) of the current owner. I am not trying to maximize the rent on the apt, but do wonder how these kinds of ‘sweetheart’ deals are typically handled after closing. Most likely I will propose a $150/mo. rent increase to split the difference, and to encourage the tenant to leave before the lease is up.
thanks again for everyone’s input — sounds like I will need to look at this closely with my lawyer in order to proceed in a manner that is reasonable and fair for both parties.
I don’t think “below market rate” really matters (unless something fraudulent, like the tenant was paying $2000 and signed a lease for $300 and gave the seller/current owner a $10K kickback). Seems an oversight by you & your attorney not to include provisions in your purchase contract, but that’s between the you and your atty.
You might just count your blessings and suck it up til the tenant’s lease expires in a year. The seller is taking a loss; his lender is taking a loss; you’re probably getting a relatively good deal.
Just a shout in the dark here – when posters put “below market rate” in landlord questions, it sure would help folks trying to answer if we knew what that meant. Is it $300 for a two-bedroom in Park Slope, or is it $50 below what you thought you could have gotten?
Sort of like the owner removing all the appliances, no? She has reduced the value. Does your contract stipulate that property was to be delivered vacant?
…also… Fact Sheet #10 – Eviction from an Apartment Based on Owner Occupancy http://www.housingnyc.com/html/resources/dhcr/dhcr10.html
… applies to RS buildings, not for a non-rent-regulated 3 family like OP’s.
slopegirl – you’re thinking of RS landlords not offering renewals to use apartments for family use. Doesn’t apply to to OP. Lease will be assigned when the closing is done. Should have included delivered vacant, or no new leases in the contract, if that’s what you wanted.
From NYC RGB site faq “Can my landlord evict me and use my stabilized apartment for his family…?”
http://www.housingnyc.com/html/resources/faq/rentstab.html
see
>doesn’t the law in NYC allow a tenant to be removed if apartment is going to family member?
Not if they have a lease. And it will still take time.