You may be able to negotiate with your landlord for a bigger buyout. 

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Question:

I am being evicted from my rent stabilized apartment after 30 years by a landlord who has filed a demolition application at the Division of Housing and Community Renewal. We've hired a lawyer to handle the case. I asked for a relocation deal, but the lawyer is against it and prefers a buy-out. He says that landlords do not have to comply with a relocation request. Is that so?

Answer:

Your lawyer is right that relocation is not mandatory, but you may be able to negotiate with the landlord for more money, says Sam Himmelstein, a lawyer with the firm Himmelstein, McConnell, Gribben, Donoghue & Joseph who represents residential and commercial tenants and tenant associations.

Landlords planning to demolish buildings have the option of either relocating the tenants or offering them a stipend. Stipends are calculated based on the difference between the tenant’s current rent and that of a comparable apartment, multiplied by six years. (See the demolition stipend chart here for more details.)

“The stipends are often completely inadequate,” Himmelstein says. “The other option the owner has is to relocate the tenant to comparable housing, plus an additional $5,000 in moving expenses, if the tenant vacates on or before the date set forth in the demolition order. If the landlord relocates you to an apartment where the rent is higher, they may be required to pay the difference for six years.”

So if your landlord’s demolition application is approved, they can choose between relocating you to a comparable, rent-stabilized apartment and paying your moving expenses; relocating you to an apartment with a higher rent and paying the difference for six years; or paying a stipend based on your current rent and calculated using the demolition stipend chart.

However, landlords don’t always have the last word on how this process goes. In many demolitions, tenants working with attorneys are able to negotiate lucrative buyouts.

Often, the prospect of tenants fighting the proposed demolition plan at the Division of Housing and Community Renewal and later in court is incentive enough for landlords to offer bigger payments.

“Because these cases take so long for the DHCR to process, and because landlords want the certainty of getting everybody out without a hearing, they’ll generally pay buyouts that far exceed stipends, or they’ll relocate people if that’s what they really want, or some combination of a relocation and a buyout,” Himmelstein says.

Depending on the nature of a landlord’s plans, tenants could stand to be paid millions in buyouts. If the landlord intends to knock down a rent-stabilized building and put up a high-rise luxury condo, for instance, they’re likelier to negotiate more generous buyouts than if they’re just planning to gut renovate a townhouse.

Very few cases actually proceed to a hearing. When they do, it often takes two to three years between the filing of the initial application and the scheduling of a hearing. And if the landlord prevails, the tenants can file an appeal within the DHCR, known as a Petition for Administrative Review (PAR). This alone can take an additional two years to decide, and tenants can continue to pursue the issue with court challenges if the PAR if it isn’t decided in their favor.

“Tenants can challenge the DHCR determination in supreme court and then file an appeal in appellate court,” Himmelstein says. “Even then, if they lose the case they can still refuse to vacate, in which case the landlord has to start a holdover proceeding in housing court. At that point he’ll win, but the whole process, from initial filing through all court challenges, can take five to six years.”

The pandemic has created a major backlog in housing courts and at the DHCR, so this could drag on for even longer now—during which time tenants can stay put in their apartments, so most landlords will find it preferable to just negotiate with them.

Others might decide to drop their demolition plans entirely.

“We had a case last year with a landlord who wanted to gut a townhouse, and he never offered more than $300,000 to the tenants,” Himmelstein says. “Our clients found that unacceptable, and the day before their hearing the landlord dropped his demolition plans. It took over two years for the DHCR to schedule a hearing. Those tenants remain in their stabilized apartments.”

Related

Ask Sam: My landlord is demolishing our building. Is he allowed to evict me, and can I get a buyout? (sponsored)

Ask Sam: I want to negotiate a buyout with my landlord. Should I wait out the coronavirus? (sponsored) 

Ask Sam: My landlord is offering me a buyout to leave my rent-stabilized apartment. Can I negotiate for more? (sponsored) 

Read all the Ask a Renters' Rights Lawyer columns here.


Sam Himmelstein, Esq. represents NYC tenants and tenant associations in disputes over evictions, rent increases, rental conversions, rent stabilization law, lease buyouts, and many other issues. He is a partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph in Manhattan. To submit a question for this column, click here. To ask about a legal consultation, email Sam or call (212) 349-3000.

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