Negotiating a Tenant Buyout Like a Pro
12 Sep, 2018
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If someone is buying out your rented apartment, it means you need to learn – at least – the basics of real estate negotiation to avoid walking away with less than you need to afford a new place. (Related Topics: tenant buyout attorney)
Brutal as it might sound, a buyout is just another form of eviction, one that you can negotiate so you won’t end up in the street without a dime to put a new roof over your head.
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It is not a secret that rent prices keep going up and that we are on the verge of a mortgage crisis, to say the least. Although affordable places for rent are not absolutely extinct, it gets harder and harder to get one because, when available, they get occupied in the blink of an eye. It is rather obvious that the demand exceeds the offer and by far.
But if you find yourself in the difficult position of having to abandon your current home or business space to find a new one amidst the difficult market situation, there are a few things you need to keep in mind to ensure you come out on top or at least make the most out of the situation.
And the situation is that as neighborhoods across the country get gentrified, property gets more expensive – regardless of the purpose. Hence, it’s only logical that if your landlord is going to evict you to get a new tenant who pays more for your apartment, you get in return a reasonable fee for going through the trouble of having to find a new place, paying for the relocation cost, and stressing over the whole situation.
If you receive a buyout letter from your landlord, it’s most likely because your unit is under the city’s rent-control ordinance and your landlord cannot actually raise the rent more than the percentage allowed by the law. This means that your landlord would technically get more value from the empty apartment than from you living in it because that way they can raise the rent to the latest market rates which are usually higher.
So if your landlord is trying to buy you out of your apartment, office or store, start by asking for the highest fee you can according to your local rates, which are usually between $20,000 and $60,000 depending on the location, and how long you’ve been a tenant in the building.
Then, for the actual negotiation drill, you need to keep in mind the following:
– For no-fault evictions, the Rent Board is the one to set up the payments.
– Once the eviction is filed, getting more than the mandated payments is nearly impossible. So you must talk to your landlord before the filing as they’re usually open to negotiating prior to the filing to avoid any legal fights.
– Consider whether or not the landlord will go through with the eviction and try to keep it in friendly terms negotiating it as a voluntary buyout; trying to resolve the situation with a minimum amount of conflict is often the best course of action.
– As rents increase fast, so do your chances of asking for more money.
– If you have roommates, negotiate with them in good faith. Otherwise, they might not move out, and if you’re the master tenant, you will lose the payment.
– Bear in mind buyout money counts as taxable income and it will be taxed at your highest tax rate.
– Don’t walk alone into this process; for a successful outcome, it is always better to rely on a professional, preferably a tenant buyout attorney who specializes in this kind of issues.
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