Can I renew my lease even if the landlord plans to sell the building?
- You can generally renew unless the lease states it is not possible if the building is sold
- The lease terms, including renewal options, are binding for current and future landlords
- Negotiating compensation is an option if your landlord wants the apartment vacated early
I've been renting an apartment in Manhattan for three years and my lease expires in September. My landlord is looking to sell but I would like to renew. The lease says I have the right to extend this lease by one year—can I do so regardless of who owns it?
If your rental building is being sold, it won’t affect your option to renew, unless the lease states the option is not effective if the apartment is sold, our experts say. It's important to read the lease carefully to make sure there is indeed an option to renew and there’s no additional text modifying this clause.
Tenant attorney Sam Himmelstein, a partner at Himmelstein, McConnell, Gribben, & Joseph (and a Brick Underground sponsor) says in most cases, the option to renew would only be compromised if there are circumstances identified in the lease making the option non effective.
“There would have to be something in the lease that says this option is not effective if the landlord notifies the tenant that the apartment is being sold,” he says.
Make sure your renewal request is correctly exercised
If you plan to exercise your option to renew the lease, it’s important to do it in exactly the way outlined in the lease.
"Courts construe options to renew very strictly,” Himmelstein says. This means if it comes to a legal fight, the court will look at how and when you informed your landlord you wanted to renew the lease. The lease will typically state how the option to renew must be exercised, whether that is by certain date or by registered or certified mail.
“If the clause itself does not specify the manner in which the option to renew should be sent, the tenant can look at the lease provision on notices,” Himmelstein says.
The section of your lease dealing with notices will guide you on how and when to contact your landlord to exercise the option to renew.
Your landlord may negotiate with you
If your landlord wants to sell and a buyer is lined up who does not want a tenant, the landlord may approach you to negotiate your move out of the apartment, in spite of your option to renew.
“They may offer some modest amount, like moving expenses,” Himmelstein says. The apartment is not rent stabilized so there’s no opportunity for a substantial buyout, but a modest compensation may be offered.
If your current landlord does not negotiate with you and you exercise the option to renew in the proper manner outlined in the lease, the incoming landlord takes on the responsibility of renting the apartment to you until the end of your lease.
"Leases are binding on subsequent landlords and that includes renewal options," Himmelstein says.
It's also possible that once the sale is complete, the new landlord may negotiate with you for an early termination of your lease.