Can Rent Stab. Tenant Survive a 4 unit Conversion? - Posted by DJ - NYC

Posted by Frank Chin on April 09, 2006 at 06:56:40:


I beleive such tenants grandfathered. If you want to be sure, check with a RE attorney that specializes in this. I base my belief in the following:

  • All residential rentals (not 6 and over) went under rent control during WWII, and later on, when only 6 and over were contolled, those under 6 were grandfathered, and even today, there are still “rent controlled” apartments around, usually the one or two over stores where tenants, or decendants, are still under rent control, and not in buildings of 6 and over.

  • Rentals in apartment buildings that are converted to coops are NOT under rent control or stabilization any more, as these units are technically singularly owned, and thus under six units. Yet, holdover tenants are grandfathered and still under rent control or stabilization. Today, where carrying charges run $500 to $1,000 for most apartments, there are units where the “controlled or stabilized” rents are far BELOW the carrying charges, meaning the owner will negative cash flow even with NO mortgage.

If you think about it, it would be far two easy for landlords to get out from under rent regulations simply by converting a 6 unit building to 4, and with the strong “tenant lobby”, I seriously doubt such conversions would be allowed. And if allowed, I’m sure that’ll be wholesale convserions from six units to fours units all over. I haven’t seen it yet.

Usually owners warehouse units till they’re down to the last two, and pay the remaining tenants to leave.

Frank Chin

Can Rent Stab. Tenant Survive a 4 unit Conversion? - Posted by DJ - NYC

Posted by DJ - NYC on April 06, 2006 at 10:27:34:

Anyone in NYC - Frank Chin or others know if a Rent Stabilized Tenant remain under the “Rent Stabilization” law if the building is converted to a 4 unit building?

I am buying a 6 unit (Rent Stabilized) with 2 tenants that I am converting to a 4 unit

(other 4 units vacant) for 498k. rehab =90k ARV = 750k
I must get the 2 tenants out (which they agreed but in NYC tenants RULE).

I just want to know if they would still fall under the Rent Stabilzed law if they refuse to leave. (I may have to pay them out… show bizness)

Any info would be appreciated. I love this site! :slight_smile: