LANDLORD-TENANT BUY-OUTS MAY BE TOO HOT TO HANDLE

Posted on April 20, 2016 by Gale Joyce

Last month, one of my clients called to discuss whether he could negotiate with a tenant who approached him seeking a buy-out to move out of a rent stabilized apartment. He had read about a new law that considers some buy out offers to tenants to be harassment. So what if a tenant contacts you with an offer that you refuse. Can you make a counter offer? What if you make an offer and the tenant refuses? Can you make a counter offer? New fines for harassment can range from $1,000 – $10,000. Clearly, it pays to know the law before you engage. The law, which took effect in December, 2015, is an amendment to NYC Administrative Code 27-2004 and has three separate components that restrict where, when and how a buy-out offer can be made. Those components are listed in numerical order below but must be viewed as a whole. As you will see, initial buy-out offers as well as repeated offers and maybe even counter-offers may now be a basis for a harassment complaint by your tenant.

First, Intro. 682-A, prohibits a landlord from engaging in the following behavior in the course of offering a buy-out:

(1) threatening, intimidating or using obscene language;

(2) initiating communication with such frequency, at such unusual hours or in such a manner as can reasonably be expected to abuse or harass such person;

(3) initiating communication at the place of employment of such person without the prior written consent of such person; or

(4) knowingly falsifying or misrepresenting any information provided to such person;

Clearly, (1) has never been an accepted form of negotiation and landlords should continue to refrain. (2) is not so clear. What can “reasonably be expected” to be of such frequency or during such hours as to be abuse or harassment? If a landlord calls once in the morning and gets no answer and calls back after dinner, say during Jeopardy, is that unreasonable. If the tenant thinks it is, and files a harassment complaint, the landlord may find himself having to prove that the calls were not unreasonable. What is “reasonable” in this context is impossible to define until a court decides for or against a party based on the new law. Reasonable expectations may vary from person to person and, frankly, I would not hazard a guess as to what an unreasonable hour is or how many communications are too many. (3) & (4) are easy. Don’t contact your tenant at work and don’t make things up. Period.

Next Intro 757-A prohibits a landlord from:

contacting any person lawfully entitled to occupancy of such dwelling unit, or any relative of such person, to offer money or other valuable consideration to induce such person to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy, for 180 days after the owner has been notified, in writing, that such person does not wish to receive any such offers, except that the owner may contact such person regarding such an offer if given express permission by a court of competent jurisdiction or if notified in writing by such person of an interest in receiving such an offer;

So, the law prohibits a landlord from making any offer within 180 days of being notified in writing that the tenant does not want to be contacted on that subject. So, what if you are communicating with your tenant by e-mail or text, is that in writing? And what if you make an offer and they answer “What??? Don’t even bother”. Is that a notification in writing that they don’t want another offer. And if it isn’t one now, could it be considered one if negotiations get contentious? There are a number of scenarios that could be interpreted for and against. What if the tenant casually bumps into the super who, unprompted by the landlord, says, “ I bet you could get $50,000 to move out of that apartment.” Is that an offer? I usually avoid giving broad legal advice and this is one I wouldn’t touch with a ten foot pole.

Finally, Intro. 700-A, makes it unlawful for an owner to make a buyout offer without informing tenants, in writing, of their right to stay in their apartment, to seek an attorney’s advice, and to decline any future contact on a buyout offer for 180 days. A Miranda warning for landlord-tenant law, if you will. Again, a landlord is prohibited from:

contacting any person lawfully entitled to occupancy of such dwelling unit to offer money or other valuable consideration to induce such person to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy, unless such owner discloses to such person in writing (i) at the time of the initial contact, and (ii) in the event that contacts continue more than 180 days after the prior written disclosure, at the time of the first contact occurring more than 180 days after the prior written disclosure:

(1) the purpose of such contact,

(2) that such person may reject any such offer and may continue to occupy such dwelling unit,

(3) that such person may seek the guidance of an attorney regarding any such offer and may, for information on accessing legal services, refer to The ABCs of Housing guide on the department’s website,

(4) that such contact is made by or on behalf of such owner, and

(5) that such person may, in writing, refuse any such contact and such refusal would bar such contact for 180 days, except that the owner may contact such person regarding such an offer if given express permission by a court of competent jurisdiction or if notified in writing by such person of an interest in receiving such an offer;

If you’re thinking that it has just become way too risky to engage in buy-out negotiations, you may be right. Landlords may not be the only ones left swinging here, though. There are many tenants who live in “hot” neighborhoods who may see a potential buy-out as a great opportunity. Since landlords can’t tell the difference between who will and who will not be interested or offended, those opportunities may go unrealized.