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Being offered a buyout for stabilized apt. A few qs.

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Being offered a buyout for stabilized apt. A few qs.

Postby regina11 » Tue Mar 30, 2021 12:52 pm

Hi, I've spent a few hours reading old posts here, and articles on other sites about buyouts.

I am aware buyouts are often not attractive to rent stabilized tenants, given how much rent over decades I'll be spending if I move and give up this good rent. I am aware of lawyer fees (i've read 18% up to 1/3, 1/3 is often said on this website) & taxes - online articles over and over say buyouts are taxed as ordinary income, yet here I keep seeing people saying it's capital gains. Can find out more about that and how to shelter it from taxes, if possible.

Landlord attorney let me know they are interested in talking to me about a buyout. I said I had to speak with my lawyer.

I don't live in a hot apartment or hot neighborhood, this is not a 1 million payout situation.

Here are my questions:

1. I think i would have more leverage if I knew exactly why they were asking to buy me out, to determine how strong is their motivation. Are there ways to find this out? A few things happened immediately preceding this offer, so I am not sure which thing is is triggering their offer. I just wrote, then deleted all the details because i didn't want to overwhelm you but I could share more if you like.

2. I've heard of the best lawyers in NYC to handle such a thing. I've also read, separately, it is possible to ask lawyers to charge you on a per hour basis as opposed to 18-33% of final buyout amount. IS it common to ask for a flat per hour or per task fee or is that the kind of question that will piss off a lawyer? Handing over 30k for a few hours work seems bonkers to me, but then again maybe a lawyer would help me to command a much higher fee. I need to be educated in this regard.

edit: re lawyer fees, I saw here http://tenant.net/phpBB3/viewtopic.php?f=3&t=10270&p=50196&hilit=buyout#p50196 that a member said, "It's pretty easy to find a lawyer who will agree to represent you on an hourly basis instead of a contingency basis as long as you have fees up front- and this is almost certainly the way to go, since unlike in tort-based cases, compensation/success is not uncertain. In fact, this seems to be standard practice (no lawyer quoted me a contingent estimate- all proposed hourly or task-based fees). Estimated fees for representing me throughout the entire process are $750, with a cap at $1500."

3. Would it be wise, or stupid, to ask the neighbors on my floor if they have also received a buyout offer? They met get pissed if I got an offer and they did not & start stuff with the LL. I don't know if that matters. If it turns out they got offers too perhaps we'd have a stronger bargaining power but if they didn't get an offer, I don'tknow if they could do something to make negotiating more difficult.

4. Would I be better off suing the landlord and receiving some sort of settlement for all the incorrigible conditions we've had to live through for years, as opposed to a buyout? I know this is a question for a lawyer and I will ask, I just wonder if you have experience with something like this. I read about Cuomo passing a law making it a criminal offense to harrass tenants the way he's been harrassing us-with jail time as a consequence. i dont know if these lawsuits go anywhere but i am happy to fight him the outcome is likely to be favorable, based on mountains of proof.

I know some of these questions you may not be able to answer, I just thought I'd ask and see if you know of anything that would send me off on a trail.

Thanks, truly, for all of your advice.
regina11
 
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Re: Being offered a buyout for stabilized apt. A few qs.

Postby TenantNet » Fri Apr 02, 2021 11:09 pm

There's a lot on this site. We can't really opine on taxes - best to consult a tax professional.

We have often heard 1/3 from tenant attorneys, but it could vary, so shop around. In choosing an attorney, there are many things to consider ... location, current value, what the LL might be willing to do, the experience of the tenant attorney and so on. You might get a good deal, but it could be eaten up by other things.

Also consider that a buyout usually means the unit will leave stabilization and affordable rents in the area. That is something to consider.

And seriously, unless you are moving to Iowa, where else will you find an affordable RS unit in NYC?

Motivations can vary, and I've discussed this at length in other threads. Are they trying to empty the building? That might be a clue.

We don't know of lawyers who will work for hourly retainer for a buyout, but it's possible. You have to get a sense of the LL, what his worth is and his motivations. A very rich landlord/developer who wants to put up a tower might be more inclined to negotiate.

You might find inexpensive attorneys, but you get what you pay for.

We cannot dissect each possible scenario for you. Do your homework and approach things with caution.

Cuomo's law on harassment? As with all other anti-harassment laws, they are jokes.
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Re: Being offered a buyout for stabilized apt. A few qs.

Postby regina11 » Mon Apr 05, 2021 12:57 pm

Thanks for your advice, I have already approached a very good attorney, not sure if he'll want to represent me but happy to give him 1/3 if that's what he charges. Not sure what his fees are yet.

You've reminded me to prepare these questions for tax guy, will do, thanks.

"Cuomo's law on harassment? As with all other anti-harassment laws, they are jokes." As far as laws go, this passed: https://www.apartmentlawinsider.com/art ... sier-prove so I wonder if there have been cases where tenants took LL to court and he got a felony. Even if it's a joke, it's a law, so that makes me wonder if this has been prosecuted successfully in court. Or if it's yet another thing (like certain city agencies) that looks good but doesn't do much. I've heard the court system can be corrupt, I don't have experience. You have seen much more than I have.

Buyout - if they don't give me enough to buy a house in another state where property taxes are low and the weather is good, I'd stay and fight. But I fear my health has suffered from living here, and nothing is worth the price of health. SO it would be-a. no buyout, fight in court to fix things & go after LL for harrasment and give him a criminal record, which he deserves, or b. if high buyout #, buy a house. No moving to Iowa. You can buy condos or houses in several other states which have no state tax, very low property taxes, and get multiple more rooms and better weather than you would in NY state. There's a reason why people are leaving NYC - but there's also a reason some people move back ;). I know a lot of people who have left NYC - many say they wish they did it sooner. Others came back because no place felt like home like NYC or they keep visiting, saying they miss it :-) For some people, it's hard to know in advance which kind of person you'd be. But yes I'm aware - if I leave this place, will probably be done with NY for good. That's why the decision is very difficult. You must have seen lots of people who don't think long term in this way and screw themselves by taking a low buyout thinking it's a deal because they're not figuring how quickly the money will go.

I didn't know apartment units could now be destabilized when someone moves out since the new 2019 laws passed - it can be destabilized now only if owner receives J-51 or 421-a tax benefits and applies, or if he turns place into condo or coop, right? I don't know how to find out if owner is receiving these tax benefits. AFAIk he's not turning this place into a condo or coop. Not sure how to check that though.

"Motivations can vary, and I've discussed this at length in other threads. Are they trying to empty the building? That might be a clue." Yep, motivations can vary, that's why I asked question 1 in my OP: IS there a way to do research to uncover what his motivations are - e.g. check applications with DOB or other city agencies, and question 3 - should I ask my neighbors if they are getting buyout offers, or could that stir the pot in a bad way? On other floors, no one seems to be leaving. Just mine, and LL didn't pay them to leave, they fled for their health and safety.

Hopefully will be speaking with lawyer soon to get more clarification. Thanks for looking out for us tenants. It is obvious you have our best interests at heart, and that you keep it real. if you don't know the answers to these questions, then don't worry about it.
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Re: Being offered a buyout for stabilized apt. A few qs.

Postby TenantNet » Sat Apr 10, 2021 8:21 pm

FYI, apartment law insider caters to landlords. There are city and state harassment regulations and few have teeth in them. The courts and DHCR are reluctant to enforce anything. One in a while you see cases, but those are the worst of the worst LLs. Google "Dracula Landlord" or "Croman." Do not expect criminal charges.

Buyouts, didn't we already say this? You probably will not get much unless the LL wants to demolish the building and put up a luxury tower.

When tenants move out post 2019, the LL can combine units, and that can destabilize apartments. When the outside perimeter walls of a unit changes, then it's no longer the same unit in the eyes of DHCR.
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Re: Being offered a buyout for stabilized apt. A few qs.

Postby regina11 » Fri Apr 23, 2021 2:32 pm

Your first paragraph - sadly seems to be true. Even Croman has not yet completely paid his tenants what was due to them. AG seems to not care.

"Buyouts, didn't we already say this? You probably will not get much unless the LL wants to demolish the building and put up a luxury tower."


Not sure where your "didn't we already say this" comes from-- especially since I don't see an answer to my question which I, to use the same extremely charming language as you, have already asked. I wrote, "IS there a way to do research to uncover what his motivations are - e.g. check applications with DOB or other city agencies?" Perhaps he does want to tear it down, how would I know? It's in the LLs interest to not share their motivation with me.

"When tenants move out post 2019, the LL can combine units, and that can destabilize apartments. When the outside perimeter walls of a unit changes, then it's no longer the same unit in the eyes of DHCR." - thanks, did not know that.
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Re: Being offered a buyout for stabilized apt. A few qs.

Postby TenantNet » Fri Apr 23, 2021 2:58 pm

We have discussed this at length in previous threads.

Yes, you can check with DOB, DHCR, City Planning, ACRIS (Dept. of Finance) your community board and often the press.

A lot has to do with common sense. Put your ear to the ground and talk to many people. Have other tenants been pressured. Ask the community board. Is the area ripe for development? That's an ongoing question, so you need to scour the press every day. What other developments have occurred within a mile radius of your location?

A lot of it is speculation, but the more you check, it becomes informed speculation.
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