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Can I Still Get a Payout for My Rent-Regulated Apartment?
New regulations in New York City are designed to make life easier for renters — except when they want to cash in.
Q: I live in a rent-stabilized building in Carroll Gardens, Brooklyn, across from Carroll Park and half a block from the subway. It recently changed ownership, and remains stabilized. Presumably, if the units were market rate, the landlord could fetch a much higher rent than the ridiculously low rent I pay. Is it possible that long-term tenants like myself could get buyouts for our apartments?
A: Two months ago, your lease was ripe for a cash buyout. A landlord might have looked at your regulated lease and decided that it would be worthwhile to pay you a sum to vacate so the apartment could be deregulated and rented at market rate for substantially more money.
But last month, the New York State Legislature made sweeping changes to rent laws, all but obliterating most incentives for getting a tenant out of a rent-regulated unit.
“By and large, the era of buyouts being commonplace is over,” said Bradley S. Silverbush, a lawyer who represents landlords and a member of the Manhattan law firm Rosenberg & Estis.
Since the mid-1990s, the last time the rules were overhauled, landlords have been pressuring rent-regulated tenants to move out, leading to the loss of more than 155,000 regulated units. One of their tools was the buyout, a cash payment that became city lore, with stories of renters receiving multimillion dollar payments. However, more often than not, tenants received paltry sums after months of pressure.
But under the new rules, when a tenant vacates a regulated apartment, the landlord can no longer substantially raise the rent or deregulate the unit. The legislature also sharply curbed the amount of money a landlord can recoup for renovations. In other words, your landlord has little incentive to pay you to go.
“Owners don’t do buyouts as charitable gestures. They do buyouts as an investment leading to profit,” said Sherwin Belkin, a lawyer who represents landlords and a partner at the Manhattan law firm, Belkin Burden Wenig & Goldman. “If all that’s going to happen is you get rid of a rent-stabilized tenant for another rent-stabilized tenant to come in at the same rent, there’s no incentive.”
So what does this mean for you? It means if you want to stay, you have more security than you did just a few weeks ago. But if you’re hoping to cash out on your prime Brooklyn apartment, those days are over. Instead, you have a different prize: a reasonably priced home in a desirable neighborhood.
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