All Forum Posts by: Hanna Edwards

Please clarify:

"Bought a multifamily with a shared laundry room which included a coin operated w&d."

"Laundry Larry said a washer and dryer are leased to that property, but only a washer is there."

Which is correct?  

Also, what is "lease to rent" - does he mean lease to own, with him collecting all coins as payment towards the sale amount until fulfilled (at which point you are entitled to keep all the coins)?  Or straight lease to you with them collecting a portion of the coins as rent and paying you out the rest?

Does Laundry Larry have proof there is a lease? Get the written agreement from him and see what it says - it will have to have the payment arrangement on it (so you know if he owes you money).  If he says no, just tell him that he can't prove the previous owner didn't buy the machine outright/secondhand from him, and so you're changing out the locks so he has no access to the property, and you'll just have the machine lock mechanism replaced so you have a working key. If he protests tell him you are relying on the statements made in the seller disclosure which said there were no leased appliances on the premises, and no one is being helpful so you're relying on your paperwork.

Assuming he wants access to the machine, he will provide what he has or come clean.  If he provides the paperwork you can see how you are supposed to be paid and what maintenance obligations he has. You can also see if there is supposed to be a dryer on site or not. If there is any kind of split of proceeds stated, ask for the bookkeeping of collected receipts for the past 5 months and demand your cut.

Also, you can see if there really is a clause that says the lease transfers with sale to the new owner.

If he has none of these things to show you, I think you can consider yourself the proud owner of these machines and make them operable for yourself.

Hanna

 @ Will B.: Landlords are not required to cover the cost of it can be segregated to the specific unit. In that case they are only required to provide the equipment and maintain it in working order.  You see it more often when a unit has electric heat, but if a unit has its own gas fired appliances on the meter specific to the unit, then the tenant pays for it directly (and gets to control their heat also, which some prefer).

@Kevin: yes most landlords bake a percentage of the heating bill into the rent as they have no way to separate out the direct costs.

First, the process to install separate gas meter requires you to file engineering plans with the dept of buildings, have a master plumber pull a permit and then separate the piping so that there is a direct separate line of piping to each unit.  Depending on how the current pipes are run, this could mean haveing to run all brand new piping throughout the house, keeping in mind that codes for gas piping have become much stricter over the years. The piping must pass a pressure test observed by DOB.

Your plumber also must open a service request with National Grid to provide another gas meter, and they will come out and do their own survey and require authorization from DOB (given as the permit is signed off). From my experience, National Grid may take the opportunity to require a newer or upgraded gas service (pipe from the street to the house) and there are requirements about where a new meter might be sited.

Once all that is cleared, you can get your new meters.

However I would point out that the #1 use of gas in a building is hot water and heat. If you have a common boiler and hwh that supply that, you would need to plan to install separate heating units into the individual apartments, so that the tenants pay their own heat and hot water. Otherwise you are stuck paying the majority of the gas - the cooking gas only runs $30/month per apt max.

As for water, again, you need to have segregated piping to each unit.  You can install a submeter on each branch to the apartment, read that every 3 months and bill the tenant back.  It doesn't require a permit, but it is only cost effective if the pipes are separate. (For instance, the pipe feeding the lower kitchen may also feed the upper kitchen in a duplex, and likewise for the bathrooms. It would be very hard to separate those effectively.)

Good luck.

@Bin Chen,

Not sure what you are asking.  Because the property is a single block/lot all units at that address are considered one lot. So if someone looks it up they will see it. If you are asking whether a vacate order would be issued: generally one is not issued unless there is a major problem. I have seen illegally converted lofts with violations for years with people living in them. The fines, I am not sure of the exact amount. The one illegal conversion I personally dealt with only had a fine for work without a permit. The way to cure the violation once received is to vacate the unit and either demolish the improvements (that means taking out the kitchen and maybe the shower/bath as well from the illegal unit).

As for evicting or paying the tenants to leave: first it sounds like you have a current situation where an apartment is unpermitted. Otherwise just make an offer to a seller that he deliver the entire property vacant.  

Tenants calling after the fact aren't likely to get you a fine. First, they aren't likely to do it. They got their money, they have little reason to be adversarial once they are out. And inspectors usually won't write a violation if the place is vacant and renovations to cure are underway.

You mention bedrooms with no windows. That is different from an illegal apartment. An illegal apartment is one that doesn't appear on a certificate of occupancy. It may or may not meet building and fire code, but it still would be "illegal" or "non-permitted".

As far as bedrooms with no windows, you can have what is called a "2 room studio" where the kitchen/living area has proper windows and egress and then there is an extra room, usually called a storage room. You can't call it a bedroom but if your tenant decides to put a bed in there after he has possession, that is his business (make sure your documentation is very clear it is not a bedroom). That type of apartment is able to be legalized through the filing process.  If you come across one of those, I wouldn't be worried about it. Just be willing to do the filing. And buy it vacant.

The as-built condition of the house becomes the responsibility of the current owner, so yes, you - assuming you are the owner - would be responsible for a fine if DOB issues one.

Having a tenant in an illegally converted unit is indeed tricky - first, since they aren't renting a legal apartment, they technically don't have a valid lease, but they DO have tenant's rights, so you would have to go through the court system to get them out. Simply being in court wouldn't necessarily trigger DOB to investigate the home, but if the tenant is adversarial, they could stop paying rent and also complain to HPD via 311.  That might trigger DOB and/or FDNY to come out and issue a violation.  The benefit might be that a vacate order may also be issued, so at least you'd have the tenant out.

Your best bet is to ask them to leave nicely.  Say that you need the space for yourself. If they are on a lease, tell them you can't renew the lease.  If you have already been down this road and for whatever reason they wouldn't leave (they should leave if you give them enough notice and they aren't aware that they have any leverage in the matter), you need to speak to a landlord tenant lawyer about the next steps.  At some point, though, the unit status might come out, so you have to be willing to take that blow.

If you haven't bought the property yet, you can demand the house be delivered vacant before closing. Then the problem belongs to the seller.

Finally, you can take steps to get the unit legalized, assuming certain conditions exist (ie, there's 2 means of egress and large enough windows in at least one room to satisfy light and air requirements). Even if you have to do some construction to get to that point, it might be the best way to go in terms of adding value and not getting jammed up by an existing tenant.  You can also separate the utilities. There's no guarantee that you wouldn't get a fine if DOB gathers that the unit is actually occupied as an apartment, but it does happen that people who attempt to legalize existing illegal conditions before they are discovered by the city avoid a fine.

I have only been to a couple in Manhattan, but what I found was that the ones I expected to happen did not happen, and then there were two auctions of properties which I had not seen announced anywhere.  Since no one had heard about these, no one bid. The whole thing took 20 minutes.

Hi Jacob,

The water bill becomes a lien against the condo association, and it would be considered a defect in title that could scare of potential buyers in the association.

If the owners are not paying their common charges then the association may have to sue them. If the property management doesn't want to do it, is dragging their feet, etc., then it is time to make a change. 

This will require you to make some noise and effort. Getting on the board is a big way to do it, as well as educating your neighbors as to the risks of letting this go on. But it does need to be addressed.

If you haven't signed the contract yet then you can ask for additional concessions but there is no hard rule what to ask for.  I have seen sponsors give credits for decorating, common charges, etc. Just getting them to pay their transfer taxes is a pretty serious concession. 

As for the 421A, I don't know for certain the answer to your question (most buildings have received their 421A before closings start but if you plan to close immediately upon receipt of TCO and don't need a mortgage then it's possible you could actually take possession before the 421A paperwork is finalized) but your attorney or the sponsor's reps should be able to give you an answer as to who pays and how much.

hi Rahill,

You would need to speak to an architect first to confirm the zoning and FAR (that's floor area ratio, the variable that determines how much square feet you can build and how high). They will also tell you what requirements you must have in your building. Whether instance,  fire alarm systems and sprinkler systems are required. And for maximum tenant usability you may want an elevator as well, even though they are not required in buildings under 5 floors (but If they did exist prior you can't take them out, no matter how many floors).

You would also need the architect to create plans to file with the city.  This is a 2 part process. First you file plans for the overall concept for the city to review. They are examined for egress and proper placement of utilities and compliance with building code. If approved, you then engage a general contractor to pull permits with the city and start construction. So you also need an expediter to get the filings done, although most architects can recommend you one.

Hope that helps.

Jason is correct: the 421A is likely to go through if the preliminary approval is there.  Something drastic would have to happen for it not to receive the 421 final approval. 

If the only thing needed for TCO is for 2 units to sell, it sounds like that vould happen pretty quickly. People often don't want to be the first, but they will happily be the second if it means the TCO  comes through as a result. Again Jason is correct that you might negotiate a concession (credit for common charges, as an example).

If you really like this unit, I think being the first is a good thing, as long as you have the right to cancel the contract, because sponsors usually sell the lowest priced units first.  But be aware that you might have to wait 12 months or more before you can cancel it. 

So if you are the first taker after its been marketed for a few months, then closing may be a long way off. But if it's just debuted in the past couple weeks, it may not take too long to get to 25% and then 50% sold.