Beware Of Buyout Agreements
There are times when a landlord will agree to pay a rent-regulated tenant to move. It’s called a “buyout.” These arrangements need careful consideration and handling, as potential dangers can result in you losing your apartment without being compensated.
Recently, tenants have come to Housing Court with written agreements specifying that their landlords would pay them money to move out. The landlords hadn’t paid anything, but the tenants were evicted anyway. And there was no legal way for them to get back their apartments.
If you get into a situation like this, you’ll have to start a lawsuit against your landlord in a different court to get your money. That’s because Housing Court only handles matters when possession of the apartment is at issue. Unfortunately, you’ll have to wait until the matter is resolved and sustain legal fees, which may eat up a significant portion of your buyout proceeds.
The key to protecting your rights in buyout transactions is to make sure that the promises are enforceable. That can only be done with a properly drafted legal agreement.
McAdams Law requires landlords to place buyout money in escrow, to protect tenant interests and insure they are paid. This effectively takes the funds out of landlord hands, and safely delivers them to tenants when they move out.
In almost every case, the firm has insisted that some of the money be made available in advance to the tenant, to cover moving expenses and broker’s fees in finding a new place live. Often deals are structured so that tenant simply shows a signed lease offer beforehand, to get that part of the proceeds released before they move out.
If your landlord is making it worth your while, and you want to move anyway, it can be a lucrative transaction for you. In one buyout case the firm handled, the tenant wanted to move to Long Island, and used the buyout money as a down payment on a house. A buyout can help you purchase your own home.