I rent in a six-family building that seems to be neglected by the landlord in favor of another of her buildings. I'm considering making an offer to buy it, but would like to know if legally she has to offer to sell to a tenant before taking the property to the open market. If that is the case, must the tenant agree to the asking price or is it a negotiation like any other sale?
While you have more of a stake in the building than a buyer who just found the place on StreetEasy, there's no reason that the landlord needs to treat you any differently, say our experts.
"The landlord has absolutely no legal obligation to offer the apartment [or the building] to a tenant before offering it on the open market," says Sam Himmelstein, a lawyer who represents residential and commercial tenants and tenant associations, "Unless your lease contains a very specific option to purchase or right of first refusal. These are extremely rare, and I have never seen one in a residential as opposed to commercial lease."
Unlike condo conversions -- where tenants are sometimes entitled to first dibs on available apartments at preferential prices -- both you and your landlord will be approaching this transaction as free agents. "If the landlord does decide to negotiate with you," says Himmelstein, "you're under no obligation to accept the landlord's asking price, and the landlord is also free to walk away (or continue negotiations) if you reject their price."
In other words, it'll be an old fashioned negotiation. But keep in mind that you've got one very appealing bargaining chip to bring to the table, especially for a landlord who sounds a bit busy and overwhelmed. If the two of you can handle the sale as an off-market deal (more tips on that process here), your landlord won't have to go to the trouble of listing, and more importantly, won't have to shell out the standard six percent broker's fee. Approach the landlord with this relatively hassle-free proposal, and you may well find yourself collecting your neighbors' rent checks soon. That is, if the landlord has any intention of selling in the first place.
Virginia Smith is an associate editor at BrickUnderground.com, the online survival guide to finding a NYC apartment and living happily ever after. To see more expert answers or to ask a real estate question, click here.