The rental landscape for tenants in New York is unlike any other city in the country. Rent regulation and the basic laws of supply and demand create complex scenarios for tenants, landlords and developers alike.
For tenants, the prospect of an increase in rent prices or losing a home to a developer is frightening. However, tenants are still entitled to certain rights under the law. How do tenants negotiate after being offered a buyout of rent-controlled or rent-regulated property?
Money talks in negotiations
According to the New York Times, about a dozen applications for demolition are filed by developers annually. From application to buyout to demolition, the process is tedious for everyone involved, but it puts each party at the negotiating table. Both the developer and the tenant can use certain elements of the law in their favor, and tenants have a significant incentive to put the law to work on their side.
The sticking point for many tenants is that not only will the development force them to move; it may also jeopardize the price-control protections provided by rent regulation. Tenants have a right to receive fair market compensation for their existing lease and rent price. Additionally, an attorney can help tenants negotiate a buyout with a developer.
Obstacles in buyout negotiations
In a complicated environment like New York City's rental market, getting a grasp on what is a fair price in a buyout is often difficult to determine. Developers may use this notion to their advantage. According to the New York Times, developers sometimes hire investigators to dig up dirt on the financial history of tenants, or take advantage of a tenant's age or financial resources, to give a low buyout offer.
Although the state and local government is deeply involved in the rental market, they may not inform tenants of their rights under the law either. Instead, the responsibility to gather information rests solely on the tenant and their respective attorney in buyout negotiations. When beginning estimates on a buyout, tenants should consider the following:
- What's the difference in price between my current lease and a potential new location?
- Are rent-control or rent-regulated options available?
- How much will it cost me to move?
- How else could a move affect my budget or lifestyle?
With trustworthy information available, tenants can use the law to empower their negotiations in a buyout.