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My roommate is negotiating a buyout without me. What are my rights?

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Question:

My roommate is negotiating a buyout from our rent-stabilized apartment without consulting with me. What are my rights?

Answer:

A lot depends on whether you're on the lease, according to Steven Wagner, a real estate lawyer and partner at the firm Wagner Berkow.

Roommates without leases can still try to negotiate

If a roommate's name isn't on the lease, "conceptually they have no rights to remain in the apartment or to a buyout from the landlord," Wagner says. "However, if the tenant of record still has to get that additional occupant out in order to deliver the apartment vacant to the landlord, the roommate does have certain due process rights."

Specifically, your roommate has to come to some sort of formal agreement with you, which could involve paying you money—and reasonably so, since the roommate is about to profit off of leaving the apartment—or has to evict you in housing court. Because housing court proceedings can drag on, with a typical eviction easily taking 3-6 months, according to Wagner, and because buyout negotiations are often time-sensitive, leaseholders are often eager to reach a deal with their roommates.

It's not just the possibility of losing the buyout that puts the pressure on.

"What you don’t want to have happen as the leaseholder is to have the tenant commit to vacate the apartment by a certain date, but not have an agreement with the additional occupant to move, and then have the additional occupant hold over," Wagner says. That's because, he explains, a typical buyout agreement includes damages for each day that the apartment is still occupied beyond a “vacate date.” The penalties "can be anywhere from hundreds to thousands of dollars, even going into five figures per day."

To avoid this, roommates who are trying to assert their rights when leaseholders are getting buyouts end up negotiating their own separate buyout-esque agreements. 

Wagner says he recently represented a roommate who had been sharing a large apartment "for many years."

The woman "was asking for some money to allow her to move and put a security deposit down on a new apartment, and had been pretty reasonable, but the tenant of record refused to negotiate with her and ignored the fact that she couldn't just lock out her roommate," he says. Ultimately, he says, "We negotiated a very high five-figure payment for the additional occupant’s cooperation and agreement to move out by the tenant’s move-out deadline."

These roommate buyouts typically come with their own contracts that feature some but not all of the language of a landlord-tenant buyout. One key factor to keep in mind in this process is that the closer to the leaseholders' promised move-out date, the more leverage the roommate has.

"It’s a tricky negotiation, but it usually gets done fast," Wagner says. "The closer to the move-out date, the more likely that the whole thing will move fast, because the hysteria kicks in. There’s a lot of money at stake."

As such, roommates facing this scenario would be wise to hire an attorney.

Roommates with leases have to be included in the buyout conversation

"If the person clearly has rights because their name is on the lease, that person would have to be dealt with in the buyout," Wagner says.

A typical buyout agreement for an apartment with multiple people on the lease would have all those tenants sign. It's technically possible for a landlord to have separate contracts for each individual leaseholder, but Wagner says, "If there are two tenants, I would not recommend my client be the only signatory of an agreement, because that would be asking for litigation, and as an attorney I try to keep my clients out of litigation."

Subletters have to be allowed to complete their subleases

"A subtenant with a sublease has protections until the end of the lease," Wagner says. "The tenant might agree to a buyout and the subtenant could say he won't leave until the end of the sublease."

To get a subletter out in this situation, a landlord would have to go through the eviction process in housing court, giving the subletter all the opportunities to explain himself that come with that.

Primary tenants who agree to buyouts with subletters still in place do so at their peril, Wagner says.

"If the subtenant got evicted because the tenant made an agreement with the landlord, the prime tenant could be found liable for wrongful eviction" and have to pay damages, he explains.

The law gets murky when it comes to succession rights and buyouts

Certain close relatives of rent-regulated tenants are entitled to take over the lease provided they've lived with the leaseholders for two years prior to the leaseholders vacating the apartment, or one year if the person seeking succession is 62 or older.

Wagner says he's not aware of a case where a rent-regulated leaseholder took a buyout and a relative refused to leave, demanding a new lease under succession rights. 

However, he says, if one relative has taken over a regulated lease and another, say her sibling, would be entitled to take over the lease through succession, it's clear that both siblings would need to be bought out.

"I can’t negotiate a buyout without the cooperation of the sibling," he says. "The landlord doesn’t want half of an apartment. So as a practical matter there would be no buyout in this situation without the cooperation of the people who have succession rights, because the landlord doesn’t want to take the chance of having a person remain."

 

 

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