Ask Altagracia: Our building is badly neglected. Can we as tenants take over the building?

If you’ve put your complaints about the building’s condition in writing to the landlord, called the 311 hotline, and even withheld rent without results, it is possible for tenants to take over the building. “You can bring a special proceeding in housing court where one third of a building's tenants ask the court to appoint an administrator to step in and take the place of the owner,” said Altagracia Pierre-Outerbridge, attorney and founder of Outerbridge Law representing residential tenants, condo owners and landlords. 

This is known as an Article 7-A proceeding and if successful, the landlord would be removed and replaced with an administrator monitored by Housing Preservation and Development (HPD). Likewise, if the city forecloses the building for unpaid taxes, it may be transferred to HPD.

The building will then be included in one of the agency’s affordable housing or tenant ownership programs. To achieve tenant ownership, you’d take steps to convert the building into a Housing Development Fund Corporation (HDFC) co-op. These are low-income co-ops that benefit from reduced real estate taxes in exchange for imposing income and resale restrictions. Turning an Article 7-A or foreclosed building into an HDFC is complex and is achieved through a separate ownership transfer process.

Putting tenants first in line

Currently, a New York State bill known as TOPA, or Tenant Opportunity to Purchase, is under consideration to try to make this transfer process easier by ensuring tenants are the first to be offered the building if it comes up for sale. This would also help shield buildings from aggressive buyouts by investors focused on profit rather than preserving affordable housing.

The Community Opportunity to Purchase Act, or COPA (Intro 902), is a City Council bill that would give nonprofits, including community land trusts, the first opportunity to purchase multifamily buildings when they go up for sale—with the goal of creating and preserving permanently affordable housing. 

The legislation has 34 sponsors in the City Council, which makes it veto proof. Recently, over 30 Community Development Corporations and developers sent a letter urging City Council Speaker Adrienne Adams and the Council to pass the bill.

Getting organized is key

Organizing with other renters in your building will give you the best chance of getting rid of a negligent landlord and potentially converting your building to an HDFC. You are legally entitled to form a tenant association and doing so means you can divide legal fees among group members if and when the need arises. 

Having an attorney is also important. “It’s a complicated process,” said Pierre-Outerbridge, who is working with tenants at 25 MacDonough St. as they try to improve conditions at their 19-unit rental building in Bed-Stuy. “We started with violations and now HPD has taken over the building,” she explained.

HPD control can come about after a legal fight with the landlord. Filing an HP action is often the first step; this is a case brought in housing court to address unsafe conditions. An HPD attorney will be party to the action and attend these court proceedings. This puts the building on HPD’s radar and ensures the agency is aware of the neglect. 

Moving on from HPD control 

As the legal fight moves forward, HPD will then decide whether they want to have responsibility for the property. “The larger the fines, the more likely it will become a building HPD is interested in,” Pierre-Outerbridge said. During this time, tenant meetings will typically take place in the lobby and tenants will have an opportunity to ask questions. 

Once under HPD’s control, tenants can form a corporation and purchase the building through an affordable housing initiative. “This is a distinct legal and administrative process following the 7-A or foreclosure phase,” Pierre-Outerbridge said. It involves getting educated on how buildings are managed, organizing a tenant vote and advocating for HDFC conversion—where tenants can purchase their apartments. “It is usually $2,500 for each apartment,” Pierre-Outerbridge said. The amount reflects the nominal buy-in needed to keep conversions attainable for tenants. 

If the tenants choose not to purchase the building it can be sold to a private developer and if the building is rent stabilized, that status remains.  

Understanding your rights

When HPD takes over a building, they first need to establish who lives there, what renovation work is needed and what bills need to be paid. Non-profits like the Urban Homesteading Assistance Board (UHAB) will likely get involved. 

“We encourage tenants to get their own lawyer at this point,” Pierre-Outerbridge said. “Sometimes there will be efforts to cut a three-bedroom apartment in half,” she added. You will need someone to advocate for you to ensure well-intentioned goals to increase the amount of affordable housing do not have a negative impact on your living space. 

You will need to prove you are a bona fide tenant at the building. This will involve showing your prior leases, Pierre-Outerbridge said. You will also need to identify unsafe conditions in your apartment and there will typically be a drive for rent payments. 

According to Pierre-Outerbridge, apartment conditions are often so bad you will likely need to relocate for repairs. “You are entitled to a comparable apartment and before you move, you should have a relocation agreement,” she added. In these situations, agreements are often one-sided and don’t protect the tenant, so it’s important to have an attorney review the documents. 

Becoming an HDFC co-op

The process of transitioning to either a new landlord or to a tenant-owned co-op structure can take many years. In some cases the original landlord may be trying to get their building back. “There are many fights to be had,” Pierre-Outerbridge said. 

The election to turn the building into an HDFC typically happens once the relocation is over. An attorney can help ensure the election goes smoothly and a quorum is achieved. “There will have to be officers installed, then there’s a period of education, and once you graduate from that program, you and your neighbors own your building,” she says.  

Altagracia Pierre-Outerbridge, Esq. is the owner of Outerbridge Law P.C, focusing primarily on tenant representation. The firm represents all sides in landlord-tenant litigation and transactional matters such as month-to-month holdovers, nuisance cases, licensee cases, harassment claims, repair cases, tenant buyouts, succession claims, DHCR overcharges and rent reductions and more. Pierre-Outerbridge has 15 years of experience litigating in Supreme, DHCR, and Housing Court. To submit a question for this column, click here. To contact Outerbridge Law P.C. directly, call 212-364-5612 or 877-OUTERBRIDGE, or schedule a meeting today.