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My building is about to be sold

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My building is about to be sold

Postby wondering » Sun Sep 14, 2014 12:20 pm

I have a rent-stabilized apartment in a building that is about to be sold. My question: What information will the new owner have about me? For example, will my past rent payment history be known to them?

Thanks for your reply.
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Re: My building is about to be sold

Postby TenantNet » Sun Sep 14, 2014 2:27 pm

When a new person or company buys a building with pre-existing RS tenants, the new owner should be given all information pertaining the building and tenants by the old owner, including rent history. That is called "due diligence" and the new owner has the responsibility to become aware of all obligations.

Some times old owners fail to inform the new owner, but the new owner is still liable for all services required to be provided by the old owner, and usually that includes any overcharges awarded by the courts or DHCR (depending on the language of the order).

Likewise, the tenants would owe the new owner all outstanding rent arrears.

You must make sure the person claiming to be the new owner has the authority and there was indeed a sale. It does happen when a con artist falesely claims to be a new owner, and if the tenants pay him, they would still owe rent to the rightful owner.
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Re: My building is about to be sold

Postby wondering » Sun Sep 14, 2014 3:01 pm

The reason I asked is that I do owe my current landlord back rent, but luckily for me, he is also my friend and has been lenient with me. He tells me that I don't need to worry about paying the back rent before the sale because I can repay him as I am able, and that the new owner will only be concerned about payments from the date of the new ownership.

Your reply suggest that no matter how generous my current landlord is, I need to be sure I do not have any arrears on my record to avoid problems with the new landlord. Would you say that's the case?
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Re: My building is about to be sold

Postby TenantNet » Sun Sep 14, 2014 3:28 pm

This smells of trouble. I understand that you feel he is a friend, but how many months of rent is that worth? When he says you can pay him back, I have a feeling he means he wants you to pay HIM back for the arrears after the sale, not the new owner. You would owe all new rents to the new owner, but unless it's put on paper and made legally binding, you would also owe the OLD unpaid rental arrears to the new owner as well.

Remember, a new owner "steps into the shoes" of the old owner and takes on all obligations and all receivables. The sale price paid by the new owner should take into account the value of all arrears, and the old owner must disclose the status of all rents. If he does not do so, that opens up the old owner to the possibility of a law suit by the new owner.

This can get you into the bind where the new owner can come after you in court for the arrears while the old owner is also seeking the arrears from you. In short, you can get hit from both sides on this.

Sometimes this happens on purpose.

You can solve this by having a letter submitted with the schedule of rents that is part of the sale. This should be notarized and made binding.

Then you can pay the old owner over time knowing the new owner won't come after you for those months.

These things can get a bit complicated. You might wish to consult with a tenant attorney before making such arragements. (do not rely on either owner's attorney - he/she does not represent your interests).
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Re: My building is about to be sold

Postby wondering » Sun Sep 14, 2014 3:36 pm

Thank you, I really appreciate it.
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Re: My building is about to be sold

Postby TenantNet » Sun Sep 14, 2014 4:44 pm

If he's a real friend, he won't mind making it binding on paper. I can think of many scenarios where so-called friends turn out not to be.
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Re: My building is about to be sold

Postby rentstubq » Thu Oct 02, 2014 9:57 pm

When the new landlord takes over there is a transfer of rents and balances. It's not about your relationship with then old landlord, it's about the documentation that is transferred to the new one.

I would get a statement from the current LL with your balances and the last 6 months payments if possible. You'd be surprised what sorts of holes a building purchase can create in terms of individual tenant account documentation...
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