Multifamily property for sale with month-to-month tenant in place. What to do???

A property I’m interested in had a tenant in place paying month-to-month. She seems nice, and was told that she’s a good tenant. But I guess there must be some reason why the seller isn’t delivering property vacant (e.g. not able to get her to leave). If I get the property, I wouldn’t evict her (unless she failed to pay rent). I have never gone through an eviction process. What are some things I can do to better protect myself as her new landlord? Is there information I should request from the seller? Could signing contract be contingent upon tenant signing a 1 yr lease? Or should I avoid this property at all cost?

Guest User | 6 years and 9 months ago

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resident2 | 6 years and 9 months ago

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A 3 family can have had a J51 tax abatement. Even if the abatement has expired the tenant may still be rent stabilized if they moved in while the abatement was in effect.
Do not give a tenant a one year lease if you have never met them, know nothing about them or know what their current legal status is.
Once you have confirmation that they are not rent stabilized, rent controlled etc. Find out if they ever had a lease & does the seller have a copy of the expired lease? If they do have the copy of the expired lease, you want that. It sets down the basics of the now month to month tenancy, things like they have no right to a trial by jury etc. If you want them out you will need to have a landlord tenant Attorney serve them with a 30 day notice of cancellation of their tenancy. If they still have not moved out, then the attorney serves a holdover petition. The tenant will then ask for an adjournment to get an attorney, then the attorney will ask for an adjournment to get an interpreter (even though they speak perfectly good English) I had a tenant that had a Greek name, cou ld not speak Greek only English but it got them another month of delays…. so after a few adjournments the tenant can get up to six months to move out so long as their use & occupancy (rent) is up to date & keeps paying on time.
When buying a building with a tenant it is crucial to know who they are, what they are ( a family/shares how many etc), how long they have been there and why is the seller not delivering it vacant? The seller can always get more money for the building + it is quicker & easier to show the building etc as a vacant building.
I had a client once who bought a 3 family house with the middle tenant in place. The tenant was never home, the seller represented her as being a single woman with a trust fund, “she traveled a lot and was hardly ever home”. He had no key for her apartment. The Trust paid her rent in advance 3 months at a time on time.
My client bought the building; the tenant turned out to be an extremely emotionally disturbed person who should not be living by herself, but her family did not want to pay for the supervised housing she really needed. It was a nightmare and was the real reason the sellers were selling the building. My client then had to deal with the trauma for months waiting for the balance of the 3 year lease at a very high rent to expire, they could not rent out their other apartment in good conscience. ALWAYS meet the tenants.

daveinbedstuy | 6 years and 9 months ago

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First, it’s never easy or quick to remove a tenant in NYC. Second, make the contract contingent on proof of payment of rent. Lots of reasons for no lease or month to month. Not necessarily something underhanded going on

Guest User | 6 years and 9 months ago

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Can you please expand upon “easier and quicker” ? This would assume that the tenant would just agree to leave, correct? Having a lease would protect the property from damage. Is your suggestion to take on the tenant month to month no lease, rather than having tenant sign 1yr lease?

mozeeatupu | 6 years and 9 months ago

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Easier and quicker to remove a tenant without a lease. Month to month just require a 30 day notice.
You can look up taxes by address also.

Guest User | 6 years and 9 months ago

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The property was built in 2003. 3 units, not stabilized, not disabled, i was told that they will provide proof of rent once offer is accepted, don’t know why there is no lease, i would renovate if delivered vacant, there is a legal CofO, not sure how long tenant has been there, haven’t met tenant. Thanks for the information above! I was not aware of an abatement. Been having trouble finding tax records as nyc BBL not working.

resident2 | 6 years and 9 months ago

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A tenant can be rent controlled, maybe they inherited it. They could also be rent stabilized as said by others if an owner took a J51 tax abatement they could be RS. Does the house have a legal C of O? How long has the tenant been there? Have you met them?
Have the seller & tenant sign a stipulation that the tenant is a free market tenant on a month to month tenancy, with no protections or written agreements.

yudashasom | 6 years and 9 months ago

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It sounds more like a rent controlled situation. At least the part about there being no lease.

Or maybe everyone is reading into it too much. This tenant could be a friend or family member of the owner. Maybe the seller doesn’t want to deal with it,

krobertson

in General Discussion 6 years and 9 months ago

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What @Mozeeatupu said… plus assuming its not rent stabilized, double check it actually isn’t, don’t just listen to what the broker says. Before closing, you or the seller can request HPD provide a rent history on the entire property to see if anything was ever registered. Check tax records to see if a J-51 or 421a tax abatement was ever filed for the property, both are signs of prior or existing rent stabilization and would be a red flag to investigate further. Some smaller buildings (under 5 units) took advantage of these abatements which subjected them to rent stabilization which don’t expire unless very specific rules were followed.

At closing request the seller provide a notarized “Assignment of Rents and Leases” stating the tenant is month to month with no lease. You’ll need it if you go to trial during a eviction and the tenant pulls out a 20 year lease out of nowhere.

mozeeatupu | 6 years and 9 months ago

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How many units?
Is that unit stabilized?
Is it an elderly or disabled tenant?
Do you have proof of a years worth of rent payments?
Why no lease?
Are you planning on renovating the unit or the house?
If you want a tenant, as long as she’s been paying and occupancy doesn’t mess up your plans, there’s no problem.