Author Topic: Landlord is selling the house, need some advice  (Read 672 times)

Padonak

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Landlord is selling the house, need some advice
« on: March 11, 2017, 06:04:19 PM »
I have been renting the same apartment in New Jersey (close to NYC) for about 6 years. The landlord owns the building which has 4 apartments (no rent control). The landlord is a good guy, only raised my rent once, last year by a reasonable amount. Right now, I think I am paying about $200-300 below the market rate per month for this kind of apartment. I am also on a month to month lease.

We renewed the contract last year (I added a clause saying that "the tenant can end the lease by giving a month's notice with no penalty"), but that contract was valid until end of 2016. Right now, I keep paying month to month based on the verbal agreement. I didn't get a new written contract for this year.

I am a good tenant, always pay on time and never make any trouble.

The house is perfect for rentals, so when the house is sold, new owners will likely continue renting out at least 2-3 of the 4 apartments, but they may want to move into the unit I currently occupy, because it's probably the best one available in the house.

The landlord already showed the house to a few potential buyers, but I believe it's going to take awhile to sell the house because the price is inflated (unless he reduces it or takes a lower offer).

New owners will probably want to raise the rent, especially if they pay the asking price or get a small discount, because the numbers don't seem to add up with the current rent X 4 without considerable future house price appreciation. However, there are many new apartment buildings popping up in this city, so if they raise the rent too much (e.g. by more than 20%), i can just move to one of the brand new buildings but lose the month to month flexibility I have now. This building is an old walkup with no amenities, no elevator, etc, though the the apartment is large and conveniently located.

Questions:

- What rights/protection do I have as a tenant? My contract (which was valid until end of 2016) states that if the landlord wants me to sign a new contract with different terms, he has to send it 90 days in advance, then I would have 30 days to accept or decline. I think the notice period is 30 days according to the local rules in the same situation.

-Does it make sense to ask the current landlord to formally sign a new lease for 2017 (including the month to month clause) before he sells the house just in case?

-If a new owner wants to raise the price too much and make it a 1 year lease instead of month to month, what is the best course of action? I can try to negotiate in this case but need some advice on how to do it.

-I paid a deposit of about $2.5K when I moved in. What normally happens to the deposit when the owner changes? My understanding is that it gets transferred to the new owner.

-Any other tips from more experienced tenants and landlords would be highly appreciated.


monarda

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Re: Landlord is selling the house, need some advice
« Reply #1 on: March 11, 2017, 07:29:54 PM »
Details could very well vary depending on what state you are in.  Landlord-tenant laws vary by state. And sometimes even by city.

Often whatever lease is in place remains in effect after the sale. Sometimes you sign a new lease with the new owners soon after the sale.

« Last Edit: March 11, 2017, 07:32:49 PM by monarda »

Hotstreak

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Re: Landlord is selling the house, need some advice
« Reply #2 on: March 11, 2017, 07:39:17 PM »
The best thing you could get would be a long term least with renewal options & pre-determined rent increases.  That would help protect you against getting kicked out or charged more by a new owner.  That kind of lease would make it harder for your landlord to sell though, since it takes options away from the new owner.. so you might not be able to get it.  Worth asking for a lease though.  Don't want to get kicked out with 30 days notice as soon as the property sells.

Pootie22

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Re: Landlord is selling the house, need some advice
« Reply #3 on: March 16, 2017, 04:17:24 PM »
Your current lease that ended in 2016 is still in effect as a month to month lease. If you were to request a new lease from the landlord it would make no sense to ask for another month to month lease as the new owner can simply raise the rent or kick you out within 30 days (or 60 depends on your state) BECAUSE it's a month to month lease. If you wanted to "lock" down the lower rent or the apartment so that you don't get kicked out you would want to sign a 1 year lease which would mean the new owner could not raise your rent or give you the boot until your lease ends.

LucyWreck

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Re: Landlord is selling the house, need some advice
« Reply #4 on: March 20, 2017, 02:46:09 PM »
As others have said, this stuff varies widely from location to location, as laws are different, but here's my understanding...

Quote
- What rights/protection do I have as a tenant? My contract (which was valid until end of 2016) states that if the landlord wants me to sign a new contract with different terms, he has to send it 90 days in advance, then I would have 30 days to accept or decline. I think the notice period is 30 days according to the local rules in the same situation.

Your rights are basically that your current lease must be honored, but no more than that. If you're currently on a verbal month-to-month, with no contract, I'd expect to either be notified that you have to move out OR receive a new lease to consider/sign once the sale is done (but any prospective buyer probably won't be allowed to contact you until the transaction is complete, and will probably be following the advice of their own lawyer). Either way, sounds like you'll at a minimum have 30 days' notice if you are asked (or yourself choose) to vacate.

Tenants have a lot of rights... but only as long as there is a valid lease contract in place.

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-Does it make sense to ask the current landlord to formally sign a new lease for 2017 (including the month to month clause) before he sells the house just in case?

You can certainly try it, but there's a pretty good chance your current landlord purposely let things go all casual-like in order to make it easier to sell. Many buyers would prefer to not be beholden to previous leases.

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-If a new owner wants to raise the price too much and make it a 1 year lease instead of month to month, what is the best course of action? I can try to negotiate in this case but need some advice on how to do it.

... it's the owner's prerogative. They can set the rent however they want, and set the lease length however they want (though obviously, you don't have to accept it). If you don't like what you're offered but want to stay, you can try to make a case for your excellent payment and quietness and cleanliness history (and ask your previous landlord to vouch for you), but it's going to depend a lot on the new landlord's plans. They may immediately want new 1-year leases at market rates, or they may value the stability of existing tenants.

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-I paid a deposit of about $2.5K when I moved in. What normally happens to the deposit when the owner changes? My understanding is that it gets transferred to the new owner.
It should be transferred to the new owner. They should give you some sort of receipt or semi-official notice after the sale closes.

Quote
-Any other tips from more experienced tenants and landlords would be highly appreciated.

If you have a good relationship with your current landlord, just ask about their plans! My husband and I bought a 2-unit building last year with existing tenants in one unit; the seller flat-out told us at the showing that the current renters wanted to stay, and the seller would actually give preference to a buyer who would honor and even renew their lease. (There was competition for the property; and in our neighborhood, it's becoming really common to de-convert 2-flats to single-family homes... so the fact that we wanted to maintain the building as a 2-flat and considered existing tenants a plus rather than a minus worked in our favor.)

therethere

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Re: Landlord is selling the house, need some advice
« Reply #5 on: March 20, 2017, 02:57:44 PM »
My main advice is to set your limits and boundaries on showings and stick to them. Don't waiver or play nice. I was a renter in a house up for short sale and the showings can drive you batty. I'd get so many last minute requests and my landlord requesting to clean, leave the apartment for hours for open houses, etc. I would argue it bordered on harassment. You are obligated to do showings, but only with reasonable notice (24 hours is great). Do not allow them to put a lockbox on the unit or they will enter when you are home without notice. I had more than one time where I was home alone and people waltzed right in without even knocking, a few times while I was showering.

As far as the lease, you're probably out of luck.

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webcrest

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Re: Landlord is selling the house, need some advice
« Reply #6 on: March 23, 2017, 08:43:21 AM »
my landlord sold the house and we had to move before contract ended and now she wont return our deposit.. what can we do?