Tenant buyout

[tosiek]

Thought it would be fun to propose this scenario to you guys to give your opinions.

We own a building and one of my apartments had a fire destroying the apartment. Most importantly and thankfully no one was hurt, it happened during the day so it was seen and called in quick and the FD reacted quickly, and gladfully there was less fallout damage due to water, ect than could have been to the apartments below her. Now i'm not trying to belittle the scenario but it could have been worse, 3 apts were greatly affected but livable and a commercial space that was flooded with damages that need to be repaired which they will lose a few days profit to close and repair. The cause of the fire was because of a cheap power strip (99c store power strips btw) that had too much plugged in, she had a small refrigerator, radio, and a couple other things with a slow draw running through the strip. She went away on vacation and the apt was closed off and hot, strip overheated and failed causing a fire. It was an accident but it could have been avoided.

The fun stuff: We are legally bound to give her the same lease terms after we clean up and renovate the apartment. She's paying 659$/mo rent which is extremely low for our area. Honestly, her rent barely covers our building expenses yearly when we calculate cost per apt, ect. We'll also be putting in extra that our insurance won't be covering, about 30k+, to fix all the damages to the building and her apartment, mainly her apartment. That 30k would have been nice to save for the new heating system we need to install next summer for the building that might have to wait one more year.

So, we were thinking about buying her lease termination. Simple surrender agreement that would terminate her lease and allow us to get a higher rent for the apartment to help with yearly costs. What would you guys offer her thats "fair"? and why? She's single, older but not yet close to retiring.

This is the simplest way of giving the scenario without introducing bias by going through how the apartment was before, how she is as a tenant, ect.

Buyout $:
Reasons/discussion:

 

[cmantis]

Damn sorry to hear that. Will she accept frags? Seriously though hope all works out for everyone.

 

[asianer]

If she's cute she can move in with me :bunnies:

 

[albano]

Having 'bought out' some of our commercial leases, I don't think it will be cheap. I would guess you would have to offer to pay her rent for up to a year (~$10000)?
Unfortunately, the tenants that you would like to get rid of, are usually the ones that know 'how to work the system', so you might have to 'bite the bullet' and get her out!

 

[Mattl22]

Good luck man the laws r so backwards sometimes gonna be tough now she's gonna get a new apt for $675 a mo that's low really low for anywhere in our area !!

 

[Arati]

Id offer her 4-5k. simple reason is, there will be no discussion, I doubt she can walk away from 5k..

It seems like alot of money but its really not. after moving and security first/last it will make it an easy experience but no big win.

but mostly cause id rather pay then talk to people.

 

[Mattl22]

And to top it it was her damn fault

 

[tosiek]

Sigh. Asianer.

Yeah Albano, commercial leases aren't cheap to buy out. Ontop of monthly rent they like to calculate in their profit lost through moves, ect. Things get expensive quick.

 

[tunicata]

Wow, that bites. I would have figured that she/renters insurance would be responsible for covering costs. I'm sorry to hear that this happened, but yes, its good no one died.

I'd say around 5-7k in exchange for a contract saying no one would sue anyone (i.e. negligence vs apt wasn't safe) and of course leaving.
You can also offer a positive recommendation. If she's been living there for a while the sudden move may look bad for new landlords (why is she moving at this age i.e. not safe/dependable/reliable to be moving).

I mean, that's paying most of her rent for the year at the price you've offered her. If you havent raised the rent to market prices in the past, I'm assuming its because you feel/she has said she cannot afford higher? So, she will have to downgrade neighborhoods to something she can afford if she's getting a great deal. I doubt I'd want to move if I knew I didn't have to. I'd however, expect that my lease would not be renewed next year and/or you to make the rent market price.

How long until her current lease is up?

Which is better? paying her off or waiting for the lease to be up?

Either way, a no suit agreement sounds good.

 

[dherrera83]

I would start with 10k and max out at 20k. Concidering that would be enough for her to find a new place and have some cash left over to furnish her new place. Finding another appartment for what she is paying now is impossible and that might be a good enough reason not to leave. So be charming and see if you can convince her but people like that would prob never leave.

Good luck.

 

[tosiek]

The apartment is rent stabilized. I have to offer her a lease renewal at the end of the term. And since its stabilized I can only increase it a small percent every end lease term, think its 3% and 7% this year and 14% if its a new tenant. You guys can do the math. So, technically she can live there forever legally as long as she pays me rent and I can't legally do anything about it without turning into the terrible landlord and give out a lot of $$ to lawyers.

 

[bud]

The lease does not mean a thing if she dont' leave. The eviction process in NYC is the worst in the USA, My mom took 2 years to evict a non paying tenent but she had a kid, no lease, in your case probably 9 months after lease is over.

You should ask a attorney that specialise in Evictions just in case something goes wrong. Remember once you ask them to leave there is no turning back. They can get nasty very fast. Good luck

 

[tunicata]

I think the system works for both folks, renters and landlords, it depends on the situation right?

I know people that have nickeled and dimed their landlords and made situations where the landlord had no choice but to pay them off or give them free rent.

And then of course, folks that have horrible landlords but feel they have no other option (talking broken ceilings, nothing to code, etc. and of course Dept of Buildings can't always be relied upon).


But given Arati's response...it's true. I don't know how you feel about it, I mean, it is a business, but depending on her situation and her knowledge of the system (what can/can't be done) you would figure out what to offer her from there?
Who knows what is fair??

I personally can't see a year's rent being fair considering you're already out 30k for her negligence (would the courts see it that way, or was there something about the nature of the building's wiring that allowed a defective cord to burn?).

8.3K is a lot but yes...a drop in the bucket considering what you would have had to pay without insurance, or just a little for peace of mind. I can't imagine the feeling from having to keep a tenant that caused you such trouble. Purging her apt. might be worth it.


---ouch, just read your update that it's a rent stabilized apt. Now, I don't know what to say.
I wish you luck though.

 

[bud]

That's why you see plenty of 6 apartment houses so cheap compare to a 3 family house because of rent control.

 

[dherrera83]

I know someone in the same situation only on the other end. She is never moving out and they offered her 30k to move. Dont spend money on lawyers and just try negotiating with her first. Im sure she has a price in mind. Just MO

 

[TRIGGERMAN]

I would start with 10k and max out at 20k. Concidering that would be enough for her to find a new place and have some cash left over to furnish her new place. Finding another appartment for what she is paying now is impossible and that might be a good enough reason not to leave. So be charming and see if you can convince her but people like that would prob never leave.

Good luck.

I gotta agree with him on both of his comments. She will never get a legit apartment for that cheap, you can't even get an illegal studio in someone's basement for that cheap especially not anywhere half decent. I think unless you paid her a lot of money to leave she isn't going to leave so you might be better off just leaving it alone. If you could only raise it a small maximum you won't get that much more rent anyway so you might as well save you buy out money. Fix the place up and carry on. Maybe put in her new lease that if she adds anything electrical etc it has to be up to par like gfci outlets and power strips etc. It she doesn't she can get evicted. You can probably add a bunch of other bs in there too just to be safe. Pretty much you could put anything in there and she will sign it because of the cheap rent so work the system in your own way a little too. A signed contract is a signed contract

 

[BaaMNYC]

I know someone in the same situation only on the other end. She is never moving out and they offered her 30k to move. Dont spend money on lawyers and just try negotiating with her first. Im sure she has a price in mind. Just MO

+1. The best bet is to see what she has in mind. Stress to her how long it would take to repair the apartment and taking the buyout and moving would be in her best interest. If she isn't leaving, do the minimum required to make it livable. Anything more will be a waste of money.

 

[NYreefNoob]

i would look into a suit against her for negligence and use that to try and force her out. any extension cord or strip has maximum power and amp ratings and might be able to get her for neglect

 

[BaaMNYC]

i would look into a suit against her for negligence and use that to try and force her out. any extension cord or strip has maximum power and amp ratings and might be able to get her for neglect

But once you go that route. Things get nasty. Rent payments will probably stop. Will have to evict the tenant. I think he has enough headaches and things on his plate with the repairs.

 

[beerfish]

I was on the other side of this situation a while back. The building was bought by a developer who wanted to go condo, so he needed everyone out. I knew what I wanted to get and they had a number in mind. They asked me to meet with them, and I did, bringing my attorney along. They made their offer, my lawyer made mine, and I got mine.

Ask her to sit down for a meeting, if she brings a lawyer, you're looking at someone who knows what she wants. If she doesn't, have a contract drawn up so that she doesn't have time to think about it. $5k-$10k seems like a lot to a tenant if she doesn't have a number in mind already, but if she has a chance to talk to people, she'll come back with a counter offer. Have the papers ready, and offer her more if she signs now.