In any context other than New York City residential real estate, a red herring is known as something designed to distract you from a particular course of action or line of questioning. It’s thought to come from a story told by William Cobbett, a late 18th-century writer in England who used a pungent-smelling smoked kipper, aka a red herring, when training hunting dogs to stay on the scent of a fox.
It’s difficult to stretch the analogy to a red herring notice in New York housing—except that for many tenants the process is fishy and stinks: It's the paperwork issued to tenants when a landlord or sponsor wants to convert a building from rentals to condos or a co-op.
The initial draft of the plan is called a red herring notice because it has red writing on the front of it, says Steve Wagner, a partner at the Manhattan law firm Wagner, Berkow & Brandt (and Brick Underground sponsor). The typeface is red until the plan has been accepted for filing, and once it is accepted it becomes a so-called black book, and the the red type comes off the front, he says.
The likelihood now of someone getting a red herring notice is “remote,” Wagner says since changes to the rent laws as a result of the Housing Stability and Tenant Protection Act “all but eliminated condo conversions.”
The 2019 reforms took away a landlord’s ability to remove rent-stabilized apartments from the system (through vacancy deregulation) and ask market-rate rents for them. Anticipating that landlords would try to sell off their buildings as condos or co-ops, and in order to protect tenants from eviction, lawmakers banned eviction in these circumstances and made it harder for landlords and sponsors to convert their rental buildings to those with an ownership structure.
It used to be that 15 percent of apartments needed to be sold for the building to convert from rental to condo or co-op, and if you weren't in a position to buy you may or may not have been evicted, depending on whether it was an eviction plan or a non-eviction plan.
Landlords now need 51 percent of tenants in the building to agree to buy their units in order for it to convert—a much higher threshold—and if you aren't in a position to buy, you cannot be thrown out.
You Might Also Like