A building is demolished. If your building is going to be demolished, you may be able to negotiate an apartment lease buyout.


What Is an Apartment Lease Buyout and How Can You Get One?

A buyout is when the landlord agrees to pay a tenant to vacate their unit. This is typically done if the landlord plans on doing major construction on the building, or if there is a new landlord looking to get rid of old tenants. However, since stricter rent laws were implemented in New York in 2019, landlords have had much less incentive to pay tenants to leave their apartments, especially those living in rent stabilized units.

The changes in New York rent laws in 2019 added additional protection for tenants in rent stabilized apartments. These protections have made it much more difficult for a landlord to cycle a unit out of the affordable housing program and turn it into a market rate apartment with higher rent prices.

Due to this, fewer landlords feel the need to buy out these tenants, but it doesn’t mean it is impossible. In fact, some landlords may still be willing to pay large amounts in order for these tenants to surrender their lease.

How Much Can You Expect From an Apartment Lease Buyout?

The amount of money you are able to negotiate in the buyout deal will depend on whether or not your landlord or developer believes they will be able to get that money back after raising the rent on your unit. However, it is crucial that you have an experienced attorney by your side to guide you through the buyout process. An attorney will help you evaluate and negotiate a deal with your landlord, making sure that you are getting the money you deserve.

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When Can You Expect an Apartment Lease Buyout? 

Here are the situations in which you are most likely to receive a buyout in a rent stabilized unit:

1. If You Are Paying Preferential Rent

Preferential rent is known as a rent that is lower than the maximum legal regulated rent for a rent stabilized unit. Prior to the 2019 changes in rent laws, landlords were able to offer tenants a preferential rent to incentivize them to sign the lease. Then, they would gradually increase the rent once the tenant was ready for a lease renewal. However, since 2019, landlords are no longer allowed to do this. Instead, the preferential rent that is set during the first lease signing is the rent amount that landlords are required to keep through the entire tenancy.

Landlords may be interested in buying you out in this situation because they will be able to raise the rent for the next tenant. If there is a substantial difference between your preferential rent and the legal regulated rent, you could be a good candidate for a buyout.

2. Your Landlord Plans On Demolishing The Building

Landlords with buildings in developing areas are often in the position to be a part of an assemblage of properties. In these situations, developers will likely try to convince tenants to voluntarily surrender their apartments. However, if you stand your ground, this can be a perfect opportunity for a buyout.

If the landlord plans on demolishing the building, there will be a large incentive to negotiate with tenants and get them out as quickly as possible. This is because as long as there are tenants in the building, they have the ability to contest any demolition applications submitted. This can cause major delays in the demolition process, as these applications can take years to complete if contested, which will cost your landlord valuable time and money.

Once a developer commits to a property, they will want to move as quickly as possible, giving you the perfect opportunity to negotiate a buyout.

3. Your Apartment Has The Potential Of Being Combined Or Reconfigured

Landlords may be able to make more money from their rental building if they are able to combine or alter the configuration of units. This includes splitting larger units into smaller ones or repurposing common areas into apartments.

When a landlord changes the configuration of a unit, they are able to put it on the market for what is known as “first rent”. This refers to the rent amount that a landlord can charge for a newly configured apartment that is on the market in its new form for the first time. Landlords will typically set this rent to one that is higher than the rent you were previously paying. While this may not mean the apartment is no longer rent stabilized, the landlord is still presented with the opportunity of raising the rent for incoming tenants.

These situations are most likely to happen to tenants that are living in a unit with a number of vacant neighboring units.

Facing a Buyout? Get What You Deserve; Contact Outerbridge Law

Facing a buyout can bring a flurry of emotions along with it. You could be anxious about potentially losing your home, but excited by the potential to profit from the new buyout. You might resent being forced out, or be excited by the opportunity to move somewhere new. Whatever the case, it’s important that you get what you deserve during a buyout.

Outerbridge Law has over a decade of experience with landlord tenant law and can help you evaluate the situation and negotiate a buyout for your unit. To take the next steps, contact Outerbridge Law today to schedule a consultation.