September 4, 2015

NYC landlords face new limits on buyouts

NEW YORK — Landlords hoping to pay tenants to move out of the city's 1.3 million rent-regulated apartments will face new limitations on extending offers under measures signed Thursday to rein in a practice that has come under scrutiny in a roaring real-estate market.

Mayor Bill de Blasio signed legislation barring repeated buyout offers within six months if tenants don't want them. Other provisions require reminders that tenants can refuse or consult lawyers.

“There are too many cases in this city of landlords using cash offers to get tenants to move so they can increase the rents,” de Blasio said at a news conference in the Bronx. “This will end now. Those days are over.”

He and other proponents say the measures will help keep residents from being browbeaten out of their homes by landlords and professional “tenant relocators” eager to charge more. But some real estate industry experts say the restrictions unduly curb communications with tenants.

Under state laws, vacant rent-stabilized apartments often can be renovated, deregulated and re-rented at triple the price or more — $5,200 a month instead of $1,700 for a Manhattan two-bedroom, for example. Citywide, about 266,000 apartments have been deregulated since 1994.

Tenant harassment complaints in city Housing Court have nearly doubled since 2011, officials have said. At a City Council hearing this spring, tenants and their advocates described residents getting knocks on their doors, fielding multiple calls per week and being accosted on the street with unwanted buyout offers. Some said that they'd been threatened with lawsuits or jail if they refused and that relocation specialists had approached tenants' children.

“Rent-regulated tenants routinely face harassment,” and it's especially troubling when the city is striving to preserve affordable housing, said Brandon Kielbasa of the Cooper Square Committee, a tenant advocacy group. He sees the new measures as needed protection.

But real estate interests have noted that buyout offers — often totaling five or more figures — can be welcome.

Some tenants solicit them. Others who initially decline reconsider as their circumstances change or the offer increases, says landlords' lawyer Sherwin Belkin. He says he won't force the issue if a tenant says no, but he inquires again in a few months or weeks if he believes they may entertain different terms. He also might send a note inviting them to call if they change their minds.

The six-month blackout on re-approaching uninterested tenants “prohibits what can be purely benign, nonthreatening, non-intimidating —what should be protected free speech,” Belkin said, noting that existing laws already prohibited tenant harassment. A 2014 law doubled the maximum penalty to $10,000.

Meanwhile, a new city and state anti-tenant-harassment task force logged its first criminal case in June, when a Brooklyn landlord was accused of destroying walls and illegally turning off heat to try to make tenants miserable enough to move.

The new measures are set to take effect in three months.