Our family lives in a rent stabilized apartment. We been living in this apartment for 25 years. Our rent is 900 dollars per month and the market price is somewhere between 2.5x to 3x the amount. I know my landlord has asked other tenants who lived in my building to move out and 1 of them did because he offered a sum of money for them.
My first question is, is this legal to receive money from the owner of the building to move out? I read it is online and this is called a buyout.
My second question is why would anyone move out if the rent is stabilized? I understand why the landlord wants you to move out because your rent is stablilized and they would be collecting 2300/month in rent as oppose to your 900/month in rent. But if we want to rent the same place, it would cost 2.5x to 3x the amount. Thus the rent in 1 year is 10800 currently but if you rent the same apartment its 31200.
Assuming we move to another location, it still would cost 2000/month for the same location at the very minimum. He really wants us to move out. But if we do, wouldn’t the amount we receive have to be a high amount since rent stabilized apartment is saving us 1400/month?
We have no plans to leave the apartment but the landlord keeps asking us many times. But if we then decide in the future to move, how much is the right amount? I can’t imagine it worth it because if we get a similar apartment for say 2000 per month in another place, we paying an extra 1100 per month which is 13000 per year. I read online that most buyouts are usually 65k max but for our apartment, how much should a buyout be relative to your rent and the market value? I know they have to spend money to renovate the apartment so that will cost them money. But from what i read if an owner makes back their buyin in 2 or 3 years, then its gravy for them and buyouts are very good deals for them and almost never the renter of the stabilized apartment. Is this true?
Landlord first offered us 5k and then 10k and then 12.5k. We told them we weren’t interested in moving at all so he went up and we told them we still was not interested. I thought in my mind, why in the world would we accept 5k when its going to cost us more than that if we go and get another similar apartment and then pay over 5k in total rent difference in just 4 months. We have no interest at the moment to leave but if we do in the future, is there an amount that is right? We know someone that lived a few blocks from us who live in a rent stabilized apartment and told the landlord he was moving and wanted his security deposit and the landlord said okay immediately. He did not know anything about the buyout and that he could have gotten money for it since he was already planning to move so the landlord was definitely happy he was moving. The reason why he was living in the rent stabilized apartment was because it was under his fathers name and they didn’t live there anymore and it was just him.
I read a thread about this and ppl say this is gaming the system but how is it gaming the system if you don’t plan to move? I assume its only gaming the system if you plan to move soon and just want the extra money? Would you say the person that we know who told the landlord he was going to move out after his lease ends and just wants his security deposit back stupid for not getting a buyout? Obviously he had no clue about it and was honest and the landlord was very happy but was it kinda foolish for him to not ask for one?
Also is there a way to have the landlord not keep asking us this? He spoke to us multiple times trying to convince us and we said we weren’t interested many times. I thought even if we were interested, isn’t the buyout he is offering us kind of a joke?
N/M.
It’s legal for him to try to buy you out and for you to take the money.
Personal legal questions belong in IMHO rather than General Questions. Moved.
samclem, moderator
I know nothing about “rent stabilized apartments”, let alone related laws, but from a “moral” point of view :
You should bother only, in almost all cases, about what is legal and what is not. Not about whether it’s gaming the system or not. The reason is that the landlord, in almost all cases, would do the same. If he had a way to evict you and rent the apartment for $ 1400/month more, he most probably would do so.
Also, presumably, when he acquired the apartment, he knew what he was buying, and the price he paid presumably was taking into account the lowest rent the tenants would be paying. So, it would be equally correct to say he “gamed the system” by not offering money (assuming that offering money to move out is legal) and getting an apartment he can rent 2300/month for the price of an apartment he can rent for only 900/month. In fact, he just lucked out by having tenants who wanted to leave anyway.
There might be exceptions, obviously (so, no need for nitpickers to provide 200 contrary examples), but generally speaking, acting in accordance to the law in contractual relationships (like landlord/tenant) is ethical.
Ask him to put all his requests in writing, or you are not going to take him seriously. That should help a bit, I think.
Could you share what city or state you’re in? And whether you are the original ‘stabilized’ rent qualifier or a son, as you described your neighbour to be? I should think both those details would be pertinent. When you say you’ve lived there 25yrs, do you mean since you were a kid?
At least if his offers are all in writing, should he ever try to force you out, using other tactics, you’ll have evidence he’s been trying to get you out for ages!
Assuming the laws protect you, as they would here, I don’t think he can make y’all move, and I would stay rather than take any buy out for the reasons you’ve mentioned. However your OP seems like you just want to know the magic number that will make moving profitable for you. I think only you can decide what it’s worth to your family.
Wishing you good luck!
Oh, and as for the “correct price” (again assuming that those “buy out” are legal) : in theory the correct price for you would be whatever it would cost to you to move out. For instance, if you expect to stay in this apartment for the next ten years before moving to retire somewhere else, it would cost you 10121400 = 168 000 to move out now. Given that you would get all the money right now insted of saving on your rent for the next ten years, asking for lower amount would make sense. So, let's make that 140 000, for instance. Of course, many other factors would affect it (moving out is a pain in itself, so you will want more money. You’ll be pleased to move into a nicer neighborhood, so you’ll be happy with less money, etc…)
In practice, the correct price is whatever you and your landlord will agree on and will satisfy you both, be it 5 000 or 500 000. It isn’t more complicated than that.
That said, given the huge difference in rent you’re mentioning, and given that you don’t intend to move out for any other reason, accepting to do so for 65 k (the maximum you mentioned) doesn’t seem like a good deal to me, given that it covers the difference in rent for only about 4 years.
clairobscur has it right- figure out how long you expect to stay in that apartment, and figure out your difference between what you would pay if you stayed, AND what you would pay if you moved somewhere else. (important).
Then, if you’re feeling generous, you could do time-value-of-money calculations to figure out how much NOW equals that difference over that time period, accounting for the fact that you could invest that money in the interim, as well as have it devalue due to inflation, etc…
But yeah, unless you didn’t plan to stay for more than 4 years, 65k is chump-change. It should be a LOT more- nearer the $168k that was mentioned.
Otherwise you’re basically leaving money on the table and helping the landlord make money at your expense.
There may not be any reason for you to move out if your rent is stabilized, but that’s not true for everybody. I’ve known people who lived in rent controlled or stabilized apartments who also owned weekend/summer houses. If they were offered enough of a buyout , they might move to that house full-time. Some people have very large stabilized apartments, larger than they really need - they might be able to move to a smaller apartment for the same rent. Other people may be approaching retirement and decide to take the buyout and move to a less expensive area. Others might use the buyout money to buy real estate in a less expensive part of the same area- I live in NYC, so the one or two people I’ve known of who did this took a buyout from a Manhattan apartment and bought a house in a not-trendy part of Queens or Brooklyn.
To be clear, it is not “gaming the system” to legally occupy a stabilized unit. If you live in New Tork City and have questions about your rights and obligations, call the Rent Stabilization Board and/or Housing Preservation & Development. It would be gaming the system if you were for example, hiding income in order to qualify (this is defrauding the system) or otherwise acquiring you apartment through less than legal means.
Offering to pay you off to leave is perfectly legal (and makes sense for some people); your refusal to accept what is a bad deal for you is also perfectly legal. Harassing you – or reducing the service you receive, such as by not maintaining the elevator or laundry room, or turning off your heat – is NOT LEGAL.
These answers assume you live in NYC.
Get a lawyer to negotiate the buyout if you are in NYC.
Here are some examples of the factors that go into determining the number:
The more he wants you to leave, the more money you can get. You can always formally refuse and then go back to negotiating when he gets really frantic.
P.S. I got a 10K buyout over 30 years ago. That was a lot of money back then.
What exactly is a “default landlord”?
Assuming your family is meeting all the legal conditions of tenancy there (only the people on the lease are living in the apartment, etc.), I also think it is a good idea to get in touch with your local Rent Stabilization Board to see what your rights are in dealing with an aggressive landlord. I also can’t see any reason why someone would leave a rent stabilized apartment just because their landlord wants to make more money - the buyout to get me to leave would be very, very large indeed.
Something else to keep in mind is that it is no longer in your landlord’s best interests to keep you as a tenant. Therefore the possibility of things like repairs being delayed, citing you for even the slightest violation of your lease, etc.
I don’t mean blatantly illegal things like shutting off your heat. But he is losing out on several thousand dollars a year renting to you, and it is human nature to resent that on some level.
Regards,
Shodan
ok, I’ve been looking at all your other identical posts around the internet where it gave your location as NYC.
The first thing you need to figure out is why your landlord wants you out. How many units are in the building? Is he trying to sell it? Go condo? Co-op? A few vacancy decontrols aren’t a big deal in a 40 unit building, but they are in a 10 unit building. Unfortunately, the owner of a 10 unit building who wants a few vacancy decontrols usually doesn’t have as much cash as the owner of a 40 unit building.
You need to find out exactly why he wants you out before you decide if negotiating will be worth the time or effort. If he can’t afford what would make it worthwhile for you, you don’t need to take it any further.
After paying such low rent for all these years, your family must have a shit-ton of money saved up. Why not invest in a nice co-op? You could pay cash for the shares with your savings and easily swing the monthly fees.
A reason to accept his offer is if you were planning to move anyway. Out of the area, the state or the country. His buyout amount could be enough to buy a house outright in other places.
StG
I hate this. You hear this all the time from owners of rent-stablized buildings. It’s bullshit.
The purchase price of an apartment building is, of course, based on the rent roll and the projected revenues over a long period of years.
The landlord is not “losing out” on several thousand dollars a year. The landlord did not (unless he or she or it is a spectacularly bad businessperson) pay more for the building than would allow him/her/it to make a profit. What the landlord is “losing out” on is a windfall. Some landlords will claim that rent regulation is unfair to them even when they inherited a paid-off building or two.
Owners of rent-stablized buildings in NYC can and do make a profit. They do make enough money to maintain the buildings and provide heat and hot water, as they are required by law to do.
Some (not all) landlords will go to great (and illegal) lengths to get rid of rent-stablized tenants. I’ve seen crackheads moved in next door, denial of heat and hot water, refusal to make needed repairs, outright threats, incessessant legal harassment (false claims of non-payment of rent, forcing the tenant repeatedly into housing court to defend the claims), and the like. I’ve experienced it, too. In my case, I gave up. I surrendered. I just couldn’t take it. The landlord actually introduced rats into the building, among other things.
Same here.
It was really a no-brainer for me because:
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My rent at the time (1982) wasn’t really any lower than “market rent”.
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The apartment was an absolute dump, a true tenement on the Upper East Side.
I had been planning on moving anyway, but I had a “gut feeling” when I didn’t receive my renewal lease at the usual time. So I called the landlord and requested my renewal lease and instead I received a call from a lawyer.
At one point I went to one of the non-profit housing advocacy groups for advice. They were ready to help me fight tooth and nail for my right to stay in the apartment but when I told them I was really looking for advice on maximizing the buyout they pretty much threw me out the door.
Clearly, actions like that are and should be illegal.
However, there’s a big difference between introducing rats and, say, replacing broken appliances with cheap models, or installing ugly carpet. When you live in a place where the owner has a major financial incentive for you to leave, expect the bare legally required minimum effort (or, unfortunately, illegal efforts) in the hopes that you’ll leave.
Ultimately, you can’t beat the market with price controls (on average). If you hold the price for an apartment down, the apartment trends toward being as shitty as the price you’re paying.
Actually, what you sometimes get is the landlord replacing an appliance, usually the refrigerator, with a really expensive model, because the landlord is allowed to incorporate that cost into the rent, and once the rent goes over a certain amount (I think it’s $2,000), the apartment is de-stablized.
Or, worse, you get the landlord replacing a non-functioning refrigerator with the cheapest possible model, but submitting phony documentation of the cost so as to boost the rent over and above the actual cost of the refrigerator.