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About to close on a NYC multifamily and one tenant has NOT left Recovery of Premises

Discussion in 'Eviction, Recovery of Premises' started by branimal, Nov 10, 2017.

  1. branimal

    branimal Law Topic Starter New Member

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    I’m closing on a multifamily Home next week and the seller promised to deliver the building vacant. The sellers broker called me today and said one of the tenants hasn’t left yet and asked me if I️ want him as a tenant. I️ do not.

    I️ proposed the following: the seller puts 2 years worth of current rent in escrow. Every month the tenant doesn’t leave, a months rent is transferred to me. Is this legal? Are there better options? I’m also considering asking for legal fees in escrow in case in the tenant becomes my headache.
    The property is in NYC and I think tenants can stay up to 2 years rent free due to our court system.


    I don’t think I have a complete grasp of how NYC Landlord/Tenant rights work.

    I have amazing financing locked in and I want to use it on this home. Should I ask for 3 or even four years of escrow? Or can the tenant stay indefinitely?

    Seperately, the owners son lives in another unit and I have agreed to let him stay until the end of the year (1.5 months). He has children in school and they want to finish out the term in their current school. The owner has agreed to put 10 months of rent in escrow for that. Am I putting myself in an unsafe situation there as well.

    Thanks for the help.



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  2. army judge

    army judge Super Moderator

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    There might be a problem with the promise the seller is alleged to have made.

    NYC has rent control which is a nightmare for property owners.

    Always complete your due diligence before agreeing to or signing anything.

    I'll say no more, because there are too many issues for an online discussion site, you need to hire yourself a real estate attorney before doing anything.
     
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  3. branimal

    branimal Law Topic Starter New Member

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    Will the setup I️ proposed - seller holding money in escrow - be upheld in court? Or is there a way I️ can get screwed with that?

    I️ realize the timeline for eviction can be longer.


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  4. zddoodah

    zddoodah Active Member

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    If you're asking whether it would be legal to do what you proposed if the seller agrees to it, the answer is yes.

    Better for whom? No one on an internet message board knows what's "better" or good for you. I can tell you that, if I were in your shoes, I would refuse to go through with closing with the seller not having fully complied with all of the terms of the deal. Alternatively, I would propose a modification by which the seller fully pays all expenses for evicting the tenant and pays me (buyer) some amount of money to compensate for inconvenience. I'm sure there are lots of other options.

    My understanding is that it's common in NY for the parties to a real property transaction to be represented by legal counsel. Do you have a lawyer? If so, does your lawyer have "a complete grasp" of these things? By the way, if your purpose in buying this building is to get into the landlord business, I suggest you either acquire "a complete grasp" of the applicable laws or reconsider your decision. My understanding is that landlord/tenant laws in NYC are particularly complicated.
     
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  5. adjusterjack

    adjusterjack Super Moderator

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    Exactly how did the seller make that promise? Was it written into your purchase contract? If not, then the promise is not worth the paper it was printed on.

    Kiss of death, right there.

    Did it ever occur to you to see if the tenant's had leases and what the expiration dates were?

    You'd be bound by those leases when you buy the property.
     
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  6. branimal

    branimal Law Topic Starter New Member

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    Good question: yes I️ wrote that the building must be delivered vacant into the contract.




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  7. branimal

    branimal Law Topic Starter New Member

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    So for the deal to go through in a timely fashion I️ asked for 50k in escrow and rent to be deducted from that escrow and delivered to me at a rate of 100$ per day paid monthly.

    The market rental rate is $1500/month

    I could wait for the building to be delivered vacant but I️ would lose my incredible financing rate.




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    Last edited: Nov 10, 2017
  8. zddoodah

    zddoodah Active Member

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    $1,500 per what? Month? If it's per month, then $100 a day is twice the market rate. Moreover, having the money paid to you on a daily basis would be absurdly impractical.
     
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  9. army judge

    army judge Super Moderator

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    You do see, as @adjusterjack noted that neither the current owner, nor the prospective owner can summarily remove any tenant with a lease. The leasehold must be honored, or the tenant must be incentivized to leave.

    NY City law has changed so that if you acquire a rent regulated tenant and you (landlord) contact the tenant about buying her/him/them out, and you're told to go away because they do not want to be bought out, you cannot contact the tenant for six months. New York state and New York City have some very peculiar twists in their laws/ordinances favoring tenants. says Wagner. If you do contact your tenant before the six months has ended about moving, it's legally considered harassment. That can cost you money and time.

    Owning rental property in NYC is a nightmare and requires a landlord to have a great property manager, or become well versed in the specifics of landlord-tenant law, as well as rent control law.

    You also need a GOOD real estate lawyer on retainer.

    This is a small start on your quest to become an informed landlord:

    7 Important Facts About New York Landlord and Tenant Laws - Rentalutions
     
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  10. branimal

    branimal Law Topic Starter New Member

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    Edited my post to clarify.


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  11. adjusterjack

    adjusterjack Super Moderator

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    Gee, lose your incredible financing rate or be faced with the potential of paying tens of thousands in attorney fees for protracted litigation after you become the owner and nobody complies with their contractual obligations and they don't agree to release the escrow money while you are trying to live there alongside crappy neighbors who are destroying the place.

    Smart.

    Very smart.

    (Yeah, that's sarcasm, in case you were wondering.)

    Don't think it can't happen to you.
     
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  12. branimal

    branimal Law Topic Starter New Member

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    Thanks for the literature Army Judge.


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  13. Highwayman

    Highwayman Well-Known Member

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    If you're trying to complete a real estate transaction in New York, especially the city, without an attorney you're foolish.
     
  14. branimal

    branimal Law Topic Starter New Member

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    I️ have a real estate attorney for the transaction, but she does not seem well versed in NYC landlord tenant law. She suggested it was fine signing to a escrowed amount of 15k. Not considering the possibility the tenant could stay beyond what 15k worth of rent would cover.




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  15. army judge

    army judge Super Moderator

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    New York City is the toughest place in the country to be a landlord, far more complex than LA. Plus, some tenants can be far worse than most lawyers.
     
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  16. branimal

    branimal Law Topic Starter New Member

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    Found some books on amazon to start the education process.

    auploads.tapatalk_cdn.com_20171111_fdfcc47d0211b3afd8da3eb48394b10a.jpg

    auploads.tapatalk_cdn.com_20171111_157f60ed11486c87a7339205cfcf5e29.jpg


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  17. Highwayman

    Highwayman Well-Known Member

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    Those may be fine for the rest of the state, but New York City can be very different.
     
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  18. adjusterjack

    adjusterjack Super Moderator

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    Those are good, but you don't want to rely completely on guides because quoting guides in court gets you nowhere. The judge won't want to hear it no matter if the judge who wrote it is his best friend.

    You'll have to quote statutes.

    So, wherever a statute or case decision is mentioned in those guides, look them up and keep them as reference material.
     
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