I've agreed to a buyout from my rent-stabilized apartment, but I now realize that I may be able to get a better deal. Is it possible to reopen negotiations at this stage?
In the simplest terms, "not after the deal is signed," says Ian Brandt, partner at the real estate law firm Wagner Berkow. "If it's signed, it's almost impossible to get out of it."
That said, your having simply agreed to a buyout over the phone isn't enough to tie you to the terms you discussed with your landlord. "There's no such thing as a verbal agreement when it comes to a buyout," Brandt says.
Nor is a contract being sent to you with the understanding that you're going to sign it good enough. "The mere delivery of a document is not enough to have it be executed," Brandt says.
He explains that it's common for tenants to get partway through the buyout process and realize they could be leaving money on the table without more negotiating firepower.
"The most common renegotiations are because someone doesn't have an attorney. They realize they low-balled themselves," Brandt says. "There's an instinct upfront to do it yourself because you don't pay for an attorney and you get more money, but an attorney helps with leverage."
Also, landlords often argue that the process will be simpler and more lucrative for the tenant without a lawyer, when in fact, in the case of Wagner Berkow, the lawyers research the building's stabilization status and development potential to find points of leverage, and help tenants figure out a buyout amount that will actually meet their financial needs, instead of just covering a year's rent.
Still, reopening negotiations is no walk in the park, especially if you've already agreed to a low amount.
"It's harder to move up than it is down," Brandt says. "But it's not impossible."
To figure out how high you can go, he adds, "You have to know what the landlord is going to do with the apartment and the building."
For example, Brandt once represented an Upper West Side tenant in a building that the owner was turning into high-end condos. Brandt found that the building owner planned to combine the tenant's apartment with the one upstairs to create a big, and more valuable duplex. Armed with this knowledge, Brandt increased the tenant's asking price.
Also, he looks at the number of rent-regulated units left in the building. When it comes to your leverage, the fewer the better.
On rent regulation filing irregularities and maintenance issues, Wagner Berkow will also go to court for tenants. The rationale is, Brandt explains, "The more money the landlord is going to have to spend dealing with you, the more they're going to be willing to pay in a buyout. It's that simple."
Ian Brandt is a partner at the New York City real estate firm Wagner, Berkow & Brandt. To submit a question for this column, click here. To arrange a free 15-minute telephone consultation, send Ian an email or call 646-780-7272.
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