Extortion in an eviction case - advise needed.

Hi All, I am new to the forum, having recently aquired a building in Brooklyn.   It is a four-family brick.  I am living in the top floor.   I am now in the throes of clearing the other units of long term tenants so I can repair, renovate and rerent them.   I have been in the process for a while, with an attorney, and all proper notices served.  There are no leases and no stabilization or control.   Back story: I initially had offered new leases at about halfway between market and current rent, but they were not accepted.    I then offered $5k to each tenant, in addition to three months of free rent, to move.   They unified and came back with a counter of $10k and 5-6 months of free rent.    I couldn’t and wouldn’t do this, so I decided we would negotiate in conference with an officer of the court.  At that point, all stopped paying rent (last august). The first court appearance was last week, and I am satisfied with the result.  It was a judge who was moderating our negotiation, and I ended up giving the tenants five months free rent, for now, with one month paid, and their required moving in 60 days.   I also received a money judgement so I can then attempt to recover two months of the arrears.    The next date is set for Tuesday and the boyfriend of the tenant in question approched me on the street in front of the building yesterday.   He told me that he thought I had renegged on a deal.  I said we never had a deal.   He said if I didn’t pay his girlfriend 7k, and the first tenant 7k as well, he would call “every city agency he can” (and as a builder himself, he say he knows the drill) and report what he says are multiple violations in the building, in addition to reporting to the bulding department that I removed a wall in my apartment without a permit.   (i did).   He claims that I removed a bearing wall, and put the tenants in jeapardy.   I removed only the drywall from a bearing wall, but none of the supporting posts or studs.    He also said he knows how to and would pull out all the tricks to stay in the apartment as long as possible (though he doesn’t really live there, and I happen to know that his “girlfriend” is really his mistress)   He said for the $14k they would go away in a couple of months, quietly. My lawyer says this is a no-brainer.   He says “trust me and let me do my job”.   Take the tenant to court, don’t trust anything the boyfriend says, assume that he will make the calls to the building department anyway, and possibly continue the demands once an initial payment was made.     I am leaning toward follwoing his advice, though part of me is tempted to just pay the guy off and hope to be done with it.    If I don’t, I will most likely face a $5,000 fine for work without a permit.  (I did appply for a permit, which is slated to be examined this week, but I didn’t wait for it to begin some light demo)   The rest of the violations that he is talking about are things about the building that I inherited (loose steps, improper wiring, etc…) that I am planning to fix as soon as I take possesion of the apartments and begin the work in them.   I don’t know how the building department will see violations that I inherited but am planning to fix asap. My fear is that he will be vindictive and continue to prompt the building department to harrase me for the entire renovation process and beyond, not to mention being an unpleasent presence in my home.    Does anyone have any sage advice?    I don’t have much time to make a desicion.    Thanks all.

sunsetbliss

in Landlord 12 years and 6 months ago

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sunsetbliss | 12 years and 6 months ago

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to answer bobjbklyn, the reason I didn’t insist that the building be delivered vacant is that it was an unuasual deal, and I was asking alot of patience of the seller, so I didn’t want to make waves.   The building was not listed for sale, I got to him before he had done that, via word of mouth on the street.  There is a big demand for a very low supply of buildings in this neighborhood, and I had lost other deals to all-cash offers that swooped in once I had an accepted offer.   I just didn’t want to rock the boat and cause him to put the building on the market.   As it was, the seller waited patiently for 10 months while I went from lender to lender and finally landed a loan.    I did know that I was heading for a storm, but some decent experience of friends in amicably removing tenants led me to believe that it wasn’t going to be too bad.   I was taking a chance and I don’t regret it, I just want to get through it.

shahnandersen

in Landlord 12 years and 6 months ago

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I have a real problem understanding what is going on here. If the tenants had absolutely no rights (not controlled/stabilized/active lease) why did not the buyer insist on the building delivered vacant? It must have been cheaper with the tenants in place (and with rights, or at least ambiguous situations). I agree that we do not have all the facts here. More facts, perhaps more accurate answers.

cate | 12 years and 6 months ago

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Not sure why you would pay anyone at all to move instead of just giving them all notice when their leases expire. BTW, also, you do not need a permit to remove or add drywall. It’s cosmetic.

sunsetbliss | 12 years and 6 months ago

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thanks all.   Please keeo the thoughts coming.   This is all very helpfull.   I don’t quite understand why cupolacoffee thinks I’m so at a loss, but I certainly am inexperienced at this stuff, and I can be a bit of a softie at times, right up until the time I get really tough.     I am heartened by the notion that I don’t have to let the inspector into my apartment, though the boyfriend would happily let them into his girlfriend’s.

brokelin | 12 years and 6 months ago

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Reasonable meaning, only, fairly cheap, all things considered, given what it has now cost him in time, lawyers fees, additional unpaid rent, costs and time lost to eviction, low chance of collecting on a judgment, and now finding himself thinking about giving in to extortion.

curiositykilledthecat | 12 years and 6 months ago

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Your tenant and her boyfriend have already established that they are money-hungry opportunists.  There is no reason to believe anything either of them say.  Trust your lawyer.

cupolacoffee | 12 years and 6 months ago

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There must be way more to this story than you’re telling, because even inexperienced first-time owners are unlikely to be as stupid about free rent and payoffs as you appear to be. You say you’ve “been in the process for a while, with an attorney, and all proper notices served. There are no leases and no stabilization or control.” You also say you’ve already been to court and gotten a judgment. If all that is true, then do as both your lawyer and putnamdenizen advise: trust your attorney and let him do his job, especially because you’ve already established that you’re unqualified, never mind too foolish, to handle this yourself.

Putnamdenizen | 12 years and 6 months ago

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Dont let inspectors in your house and the complaint will be dismissed.  Don’t pay the boyfriend.  Follow your lawyer’s advice.

ParkSlopePS | 12 years and 6 months ago

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I know i’m naive about these matters, but why is it “reasonable” to pay tenants $10k and free rent for 6 months when there are no leases, and no rent controls. Doesn’t this guy have a right to his own building? Aren’t the tenants month to month renters?  I don’t get why they should be entitled to all these free goodies. On the other hand, the new owner knew there were existing tenants when he bought the place, so he should have expected something like this.

brokelin | 12 years and 6 months ago

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Don’t give in to the extortion – there may be no end to it once you start paying.  And your lawyer is right – he will likely report you anyway, there is no way to stop him.  While I was reading, I got to the part where the tenants told you their counteroffer, what it would take to get them to leave, and thought, you should have met their (reasonable) offer then. I still think so. But now, listen to your lawyer.