Buyout Guide

Arun Perinbasekar, Partner

A new law takes effect on December 2, 2015 designed to prevent Owners from harassing tenants through the offering of buyouts. The new law, modifies Section 27-2004 of the Administrative Code of the City of New York, the Housing Maintenance Code, and adds new definitions for harassment.

Below you will find a sample letter to send to tenants/occupants about buyouts.

Here is a short summary of the requirements:

  1. If an Owner receives a written correspondence stating that the tenant or occupant does not want to consider any buyout agreements, then for 180 days the Owner CANNOT contact the tenant, occupant or their family, about a buyout. If an Owner persists it will be considered harassment, and subject an owner to fines.
  2. The only exceptions are if a Court gives permission, or if the person notifies an owner by writing that he is willing to hear offers.
  3. Additionally, the Owner’s method of making offers has been restricted. In order to avoid a claim of harassment, an Owner is required to provide, in WRITING:
    • that management is contacting the tenant/occupant regarding a buyout;
    • that the contact regarding the buyout is being made by, or on behalf of, the owner;
    • that the tenant/occupant has the right to reject the offer and reside in the apartment;
    • that the tenant/occupant can seek guidance from an attorney;
    • that the owner is to refer the tenants to the “ABCs of Housing guide” http://www1.nyc.gov/site/hpd/owners/Housing-info-guide.page; and
    • that the tenant/occupant may, in writing, refuse contact. If tenant/occupant does send a letter, such refusal will bar contact for 180 days, except if permission is given by the court, or if the tenant, in writing, notifies the owner of intention to hear offers;
    • NOTE: If you do not resolve the issues within 180 days, then for each 180 day period thereafter, you may send another letter offering a buyout to the tenant/occupant.
  4. ANY buyout offers that have ANY of the following are considered harassment:
    • threatening, intimidating or obscene language;
    • initiating communications that are unreasonably frequent;
    • initiating communication at unusual hours;
    • initiating communication that could be considered abusing or harassing conduct; or
    • knowingly providing false information.
  5. The penalties for violating the law are as follows:
    • $1,000.00-$10,000.00 for the first offense; and
    • $2,000.00 -$10,000.00 for each subsequent offense.
  6. In sum, Owners must be careful when discussing buyout offers with tenants/occupants. It is important to start communication through writing, and if you receive any correspondence from a tenant rejecting your buyout offer, then you must refrain from discussing a buyout further for at least 180 days. Failure to abide by this new law may result in the levying of severe fines.

(YOUR LETTERHEAD)

(Tenant/Occupant Address)

(Date)
Re: Request to Discuss Buyout for (fill in address)

Dear Tenant or Occupant:

I am writing on behalf of, (Owner’s name), the owner of the above-referenced property. This letter is sent pursuant to Section 27-2004, Paragraph 48 of the Administrative Code of the City of New York. The Owner is requesting to discuss your potential surrender of the subject premises in exchange for monetary compensation and/or any other form of compensation.

You may reject any offer made by the Owner and continue to occupy your dwelling unit, and you may seek the advice of an attorney regarding any offer made by the Owner. For information on accessing legal services, refer to the ABCs of Housing guide on the Department of Housing Preservation and Development’s website http://www1.nyc.gov/site/hpd/owners/Housing-info-guide.page.

Additionally, you may, in writing, refuse any contact regarding a buyout. Such refusal will bar the Owner from contacting you regarding a buyout for one hundred and eighty (180) days.

However, the Owner may be permitted to contact you if permission is granted by a Court of competent jurisdiction, or if you notify the Owner in writing that you are interested in receiving an offer.

Thank you for your attention to this matter.

Please direct any further correspondence to the undersigned.

Sincerely,
(Your Name)

 
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