Landlord looking to buy out my lease. Whats a reasonable price?

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kflem20
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Landlord looking to buy out my lease. Whats a reasonable price?

Post by kflem20 » Thu Apr 04, 2019 7:45 am

Hi all,

My landlord passed away a few months ago and the building was sold to a new owner that has plans to demolish and renovate the entire building. There are 6 units in the building. I was the only person with a lease as the other tenants were month to month. They have all left and I remain the only one in the building with a lease.

The landlord has recently offered to buy out my lease. What is a fair amount to ask? My rent is $2200 per month. The building sold for 5 million.

I have 4 months remaining on my lease.

Thanks!

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MilleniumBuc
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by MilleniumBuc » Thu Apr 04, 2019 7:51 am

I would probably say 1 month plus full deposit back. Anything based on the value of the building I wouldn’t do based on karma, but that’s me.

The other thing if he wants you out right away is for a hotel room for 2-3 weeks plus moving and storage costs, until you find another place.

Shallowpockets
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Shallowpockets » Thu Apr 04, 2019 7:59 am

Are you looking to make money on this deal? Or are you looking for fair? You only have 4 months left so you have to move in that time. Landlord can wait you out. I would say start looking for another place right now. Have an idea of the new rent and then use that as a base for your offer to him. But don't slack on this. The 4 months is like a stock option and has a time decay associated with it.

Pickle11
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Pickle11 » Thu Apr 04, 2019 8:00 am

Your lease is holding up his projected demolition. Based on his carrying costs of at least 20k per month (5,000,000 x 5% / 12), i would ask for the moon as any delay costs him that much each month.

I doubt he wants to wait 4 months to begin his demo. Also you can bet his future revenue opps are greater than 20k.

Tell him to make you an offer.

Pickle11
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Pickle11 » Thu Apr 04, 2019 8:08 am

Also, what is market rent in your area?

There is a spread between your current rent and incremental revenue they expect after renovation. They can wait you out, but luxury tenants dont want to live in a dust bowl and if the purchase price was 5 million for six units, there are big plans underfooot.

10.06am
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by 10.06am » Thu Apr 04, 2019 8:12 am

I wouldn't shoot for the moon. Just something reasonable plus your deposit back. Maybe a month's rent for the inconvenience and give you a few weeks to find a new place. Or a month's rent and hotel/storage for another month while you find a new place.

If you ask for something crazy he can be just as crazy - start doing demo on the other units, workers in and out at all hours, etc.

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kflem20
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by kflem20 » Thu Apr 04, 2019 8:13 am

Market rent is closer to 2800 for a similar apartment.

They will be entirely demolishing the building and making luxury units for sale.

researcher
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by researcher » Thu Apr 04, 2019 8:21 am

kflem20 wrote:
Thu Apr 04, 2019 7:45 am
The landlord has recently offered to buy out my lease.
So what was his offer?

Just tell him to make you an offer and you'll consider it. If it seems low, then counter.

Shallowpockets
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Shallowpockets » Thu Apr 04, 2019 8:25 am

Looks like maybe time could be on your side too if the landlord is hot to trot on his project. If 2800 is what you will pay for a new rental, ask for 4 months rental payments and that will give him 4 months earlier to get his project going. Plus ask for professional moving expenses. If he covers that you will be able to move easier and quicker and that is to the good for him.

jerkstore
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by jerkstore » Thu Apr 04, 2019 8:30 am

The value calculated to them or to you?

To you, inconvenience $$

To them, delayed project $$$$

Value to You:
You have an expected benefit of $600.00/month for 4 months based upon your lease (2800 FMV less lease rate 2200 = 600 x 4 = $2400). That is your current position.

2400 expected benefit
1500 moving expenses (or whatever)
2200 1 month rent as incentive to move
___
6100 + return deposit 2200 = 8300

That is not asking for the moon, that is reasonable. In the past, I paid a tenant 1.5 months rent to move to the adjacent unit + moving expenses.

The value to them will greatly exceed 8300 and was already considered when they bought the property, as the knew about your lease during the purchase.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Dottie57 » Thu Apr 04, 2019 8:30 am

A month’s rent, deposit back plus cost for a moving company. I pretty much believe in Karma. You are reasonable, you get reasonable back.

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leeks
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by leeks » Thu Apr 04, 2019 8:41 am

jerkstore wrote:
Thu Apr 04, 2019 8:30 am
The value calculated to them or to you?

To you, inconvenience $$

To them, delayed project $$$$

Value to You:
You have an expected benefit of $600.00/month for 4 months based upon your lease (2800 FMV less lease rate 2200 = 600 x 4 = $2400). That is your current position.

2400 expected benefit
1500 moving expenses (or whatever)
2200 1 month rent as incentive to move
___
6100 + return deposit 2200 = 8300

That is not asking for the moon, that is reasonable. In the past, I paid a tenant 1.5 months rent to move to the adjacent unit + moving expenses.

The value to them will greatly exceed 8300 and was already considered when they bought the property, as the knew about your lease during the purchase.
This calculation method sounds appropriate to me. I would even break it down that way in the letter/email you use to respond to their request so they can see how you calculated it in a reasonable way (not sure they will care, they will probably just pay, but still).

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ResearchMed
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by ResearchMed » Thu Apr 04, 2019 8:44 am

leeks wrote:
Thu Apr 04, 2019 8:41 am
jerkstore wrote:
Thu Apr 04, 2019 8:30 am
The value calculated to them or to you?

To you, inconvenience $$

To them, delayed project $$$$

Value to You:
You have an expected benefit of $600.00/month for 4 months based upon your lease (2800 FMV less lease rate 2200 = 600 x 4 = $2400). That is your current position.

2400 expected benefit
1500 moving expenses (or whatever)
2200 1 month rent as incentive to move
___
6100 + return deposit 2200 = 8300

That is not asking for the moon, that is reasonable. In the past, I paid a tenant 1.5 months rent to move to the adjacent unit + moving expenses.

The value to them will greatly exceed 8300 and was already considered when they bought the property, as the knew about your lease during the purchase.
This calculation method sounds appropriate to me. I would even break it down that way in the letter/email you use to respond to their request so they can see how you calculated it in a reasonable way (not sure they will care, they will probably just pay, but still).
But go high on the moving expenses. You'll need professional help for packing... you don't have the expected two or three months to get this all organized.
Again, this is not gouging; it's just covering your costs and also your sudden inconvenience (which includes searching "NOW" for a new place, which might also place you in an off month, meaning, not lots of turnover, such as in June-Aug/etc.

RM
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SmallCityDave
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by SmallCityDave » Thu Apr 04, 2019 9:21 am

kflem20 wrote:
Thu Apr 04, 2019 8:13 am
Market rent is closer to 2800 for a similar apartment.

They will be entirely demolishing the building and making luxury units for sale.
Reasonable would be the difference in rent $600 x 4 = $2400
Full refund of your deposit
and the bonus is a $2000ish for moving expenses.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Carefreeap » Thu Apr 04, 2019 9:33 am

leeks wrote:
Thu Apr 04, 2019 8:41 am
jerkstore wrote:
Thu Apr 04, 2019 8:30 am
The value calculated to them or to you?

To you, inconvenience $$

To them, delayed project $$$$

Value to You:
You have an expected benefit of $600.00/month for 4 months based upon your lease (2800 FMV less lease rate 2200 = 600 x 4 = $2400). That is your current position.

2400 expected benefit
1500 moving expenses (or whatever)
2200 1 month rent as incentive to move
___
6100 + return deposit 2200 = 8300

That is not asking for the moon, that is reasonable. In the past, I paid a tenant 1.5 months rent to move to the adjacent unit + moving expenses.

The value to them will greatly exceed 8300 and was already considered when they bought the property, as the knew about your lease during the purchase.
This calculation method sounds appropriate to me. I would even break it down that way in the letter/email you use to respond to their request so they can see how you calculated it in a reasonable way (not sure they will care, they will probably just pay, but still).
I agree too. You're going to have to move anyway so the moving expenses are a bonus. Probably cheaper to move now than in August when it's high demand moving season.

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8foot7
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by 8foot7 » Thu Apr 04, 2019 9:53 am

Pickle11 wrote:
Thu Apr 04, 2019 8:00 am
Your lease is holding up his projected demolition. Based on his carrying costs of at least 20k per month (5,000,000 x 5% / 12), i would ask for the moon as any delay costs him that much each month.

I doubt he wants to wait 4 months to begin his demo. Also you can bet his future revenue opps are greater than 20k.

Tell him to make you an offer.
Huuuuuuuge assumption here on carrying costs. You don't know the amount he financed, his rate, the terms of his note, any carry back with the estate, nothing. Figuring that it costs (20k-2200=~18k*4=72k to honor your lease is probably a mistaken assumption. You don't even know if he's ready to begin the demo the next day after move out either.

Ask him for an immediate return of deposit (since the building is being demolished there is no concern of damage), one month rent, and professional movers and move on.

Pickle11
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Pickle11 » Thu Apr 04, 2019 10:08 am

Agree, but all it takes is the landlord realizing a month delay is very costly.

OP has more leverage then they realize.

alex_686
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by alex_686 » Thu Apr 04, 2019 10:18 am

Pickle11 wrote:
Thu Apr 04, 2019 10:08 am
Agree, but all it takes is the landlord realizing a month delay is very costly.
Maybe. You are assuming that the developer has all of their ducks in a row, and has demolition and redevelopment plans already approved by the planning board. I kind of doubt this, but it is pretty easy to check.

flarf
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by flarf » Thu Apr 04, 2019 10:20 am

Not sure why it's such a "huuuuuuuge" assumption on the carrying costs. The amount financed is irrelevant by the new owner is irrelevant; what matters is the cap rate, and you can use that to set a floor on the value of getting the OP out early.

OP can ask for $10k + security deposit return and the new owner won't even blink an eye. The amount of the monthly rent he's paying has absolutely no connection to the value of him leaving early.

If the new owner wasn't ready to get going, he wouldn't have asked the OP to leave early.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by 8foot7 » Thu Apr 04, 2019 10:24 am

flarf wrote:
Thu Apr 04, 2019 10:20 am


If the new owner wasn't ready to get going, he wouldn't have asked the OP to leave early.
He could be just be feeling out the OP. If OP was looking to leave early then maybe there was a cheap solution there and they could come to an agreement. I think assuming it's going to cost the landlord $72,000 to honor the remainder of a four month lease is huge and probably inaccurate. $10,000 might be a more feasible figure, but only if the guy's ready to knock down stuff tomorrow.

OP, I think we would all benefit from knowing if the demo trucks and wrecking ball are literally parked outside your window right now and you're the only reason the building is still standing vs. the developer running through his checklist of a million different permit items before eventually scheduling the demolition.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by FireSekr » Thu Apr 04, 2019 10:26 am

Are there any laws in your area regarding this?

Where I live, many of the older buildings are under rent control and even if you are on a month to month lease, the landlord is required to buy you out. The city’s rent control board has a formula and I remember seeing somewhere that a 1 bedroom apartment has a $16k buyout requirement.

As other posters mention, your going to be paying higher rent because of this in perpetuity. One month rent is a complete joke. You’re holding up the construction and the landlord has significant carrying costs. Ask for $10 or $20k and negotiate from there.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Broken Man 1999 » Thu Apr 04, 2019 10:35 am

I doubt seriously the new owner would be in any position to do much of anything unless a deal was close to being finalized PRIOR to the owner's death. Takes time for permits (even for demos) , site drawings, probably zoning needs to be changed if they are going to a higher density, I think it would be a miracle to get all that started to impact your lease. Permitting is a real time consuming thing in some areas. Other areas, not as bad.

Now if the owner had been working with someone for some time near his death, perhaps things could be in progress already.

OP, were things underfoot BEFORE the owner's death? If so, the time-frame might warrant speed on getting you out.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by anonenigma » Thu Apr 04, 2019 10:36 am

ssquared87 wrote:
Thu Apr 04, 2019 10:26 am
Are there any laws in your area regarding this?

Where I live, many of the older buildings are under rent control and even if you are on a month to month lease, the landlord is required to buy you out. The city’s rent control board has a formula and I remember seeing somewhere that a 1 bedroom apartment has a $16k buyout requirement.

As other posters mention, your going to be paying higher rent because of this in perpetuity. One month rent is a complete joke. You’re holding up the construction and the landlord has significant carrying costs. Ask for $10 or $20k and negotiate from there.
+1

flarf
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by flarf » Thu Apr 04, 2019 10:37 am

Wrecking ball parked outside? Many jurisdictions won't allow demolition of a building until fumigation is completed. That can't be done while the building is occupied.

There are indeed a lot of moving parts here, and a tenant stands in the way of a lot of them.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Sandtrap » Thu Apr 04, 2019 10:39 am

reasonably,
1 were you planning to move anyway?
2 how much would it cost you to move to a place in your area? (start looking now)
3 are equivalent rentals in yur area hard to get or a dime a dozen?
4 if it would reasoably take 2 months to find a nice place and move then 2 mos rent and secirity deposit. like that.
5 dont get greedy, it matters not what the owners plans are, if you try to capitalize on that, you may end up with nothing.
6 negotiate in good faith, find a middle ground. It is in your best interest.
7 repeat #5
8 repeat #5
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spectec
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by spectec » Thu Apr 04, 2019 10:46 am

I'd be looking for $10K plus return of security deposit, with no obligation to leave the place cleaned up since he's going to demo anyhow.

But before I gave any figures, I'd ask him to make me an offer. (After all, he's the businessman and I'm just a tenant.) If it's anywhere close to $10K, take it. If it's significantly lower, counter with $12K and signal a willingness to negotiate "a little".
Last edited by spectec on Thu Apr 04, 2019 2:41 pm, edited 1 time in total.
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Quickfoot » Thu Apr 04, 2019 11:17 am

Absolutely let him make an offer. 10K for a buyout with $2,200 rent and 4 months remaining is not reasonable.

Around here the typical lease buyout is 2 months rent. That provides for being able to make a security deposit and first month's rent at another location. Here lease buyouts are specified at the time the lease is signed and either party can buy out the lease with a 30 day prior notice. Given the desire of the owner to vacate the building 3 months rent might be achievable.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by FeesR-BullNotBullish » Thu Apr 04, 2019 11:55 am

Does the landlord have additional properties in the area? If so, you can approach him about moving to one of those and keeping your current rate for a 12 or 24 month term.

dsmil
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by dsmil » Thu Apr 04, 2019 12:13 pm

My company recently did something like this where we settled with the residents in exchange for them leaving their DC apartment. An agreement was made between us and the legal counsel of their tenant association. Each tenant received $41k minus $8k of legal fees, for a total of $33k. They were all on MTM leases. DC has strict laws on doing this and because it is rent controlled, some of these residents were literally paying 1/3 of market rent. I'm sure that this was a factor in driving up the settlement cost.
Last edited by dsmil on Thu Apr 04, 2019 12:17 pm, edited 1 time in total.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Hulu » Thu Apr 04, 2019 12:16 pm

I'd quickly figure out a happy number and ask nicely for what you think they'll offer. For me I'd want to have a long period to find the right place unless there were tons of good options. If I were $600 under market with four months left I think I'd want a months rent for the trouble. So $5k plus immediate full security. However you're giving them tremendous value to renovate immediately. So you could emphasize that and ask for them to pay market rate for four months. After all, if you had broken the lease that's aproximately what you'd owe them. OR... Let them know that three months of market rent for their entire building is x amount and that you'd like half of that.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by FelixTheCat » Thu Apr 04, 2019 12:48 pm

Is anyone on this thread a landlord? I would offer a free month's rent and your full security deposit to get out in 30 days. I would even consider 60 days free rent and move out. Otherwise, I would wait you out.
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by unclescrooge » Thu Apr 04, 2019 12:54 pm

jerkstore wrote:
Thu Apr 04, 2019 8:30 am
The value calculated to them or to you?

To you, inconvenience $$

To them, delayed project $$$$

Value to You:
You have an expected benefit of $600.00/month for 4 months based upon your lease (2800 FMV less lease rate 2200 = 600 x 4 = $2400). That is your current position.

2400 expected benefit
1500 moving expenses (or whatever)
2200 1 month rent as incentive to move
___
6100 + return deposit 2200 = 8300

That is not asking for the moon, that is reasonable. In the past, I paid a tenant 1.5 months rent to move to the adjacent unit + moving expenses.

The value to them will greatly exceed 8300 and was already considered when they bought the property, as the knew about your lease during the purchase.
+1

fourkids
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by fourkids » Thu Apr 04, 2019 1:01 pm

$8800.
you do not want to move. this is an inconvenience to you. you shouldn't be put out in any way. you many have to move to a hotel and keep your stuff in storage until you find a new apartment you really want to sign a new lease on. all this stuff is not cheap or insignificant.

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8foot7
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by 8foot7 » Thu Apr 04, 2019 1:08 pm

IMO some of these responses are well north of nuts. This isn't 11 months remaining on a new lease, this is four months and the OP already knew the lease would end and would have to move before now. OP already has to look for a new place in presumably less than four months. OP was already going to incur moving expenses. LL has no obligation to make up increased rent OP will pay in the future. Doubtful LL is ready to move on demo except for lease, at least right now. To expect thousands of dollars to move out 120 days early is, well, dumbfounding.

OP, please let us know what you decide and what happens. I'm curious who is right.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by PrettyCoolWorkshop » Thu Apr 04, 2019 1:44 pm

8foot7 wrote:
Thu Apr 04, 2019 1:08 pm
IMO some of these responses are well north of nuts. This isn't 11 months remaining on a new lease, this is four months and the OP already knew the lease would end and would have to move before now. OP already has to look for a new place in presumably less than four months. OP was already going to incur moving expenses. LL has no obligation to make up increased rent OP will pay in the future. Doubtful LL is ready to move on demo except for lease, at least right now. To expect thousands of dollars to move out 120 days early is, well, dumbfounding.

OP, please let us know what you decide and what happens. I'm curious who is right.
Given the fact that all other tenants have been kicked out at this point, I would think the landlord is trying to move as fast as possible. Demo may be soon.
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Yooper16
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Yooper16 » Thu Apr 04, 2019 1:56 pm

The new owners knew you had a lease, ending soon. I expect that they put that in their calculations for timing and for carrying costs etc. The seller may have subsidized the price because of the lease. Unless the buyer had his subs, contractors, permits all lined up ready to go, they may have figured it would take that long to get things running anyway.

I would guess that the buyer was smart enough to have considered these things. Ask double what they are offering. If they say no, then you will know they were prepared for you to decline.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by renue74 » Thu Apr 04, 2019 2:12 pm

8foot7 wrote:
Thu Apr 04, 2019 1:08 pm
IMO some of these responses are well north of nuts. This isn't 11 months remaining on a new lease, this is four months and the OP already knew the lease would end and would have to move before now. OP already has to look for a new place in presumably less than four months. OP was already going to incur moving expenses. LL has no obligation to make up increased rent OP will pay in the future. Doubtful LL is ready to move on demo except for lease, at least right now. To expect thousands of dollars to move out 120 days early is, well, dumbfounding.

OP, please let us know what you decide and what happens. I'm curious who is right.
I agree with this. It's 4 months. It takes a month or more to design a project, some time to get permits approved, even more if there are environmental hoops to jump through. Then most vendors are weeks to months out before they can start.

You're not getting rich off this...I would ask for 2 months and be happy with 1 month of the amount of rent. Never hurts to ask for more with the expectations of less.

If the buyer paid $5M, I'm sure they can handle $2200. Anything else is just a pain to them. You are a spur in their saddle and at this point, they just want you gone. They don't want to deal with you.

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hand
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by hand » Thu Apr 04, 2019 2:20 pm

Count me as one of those who advocates calculating your true cost to leave early (rent differential, moving costs) + early and full return of your deposit + a small bit of extra for incidental expenses, hassle and goodwill and only requiring the same to move.

As devil's advocate:
1) Are you clear on what happens legally occurs at the end of your lease in your jurisdiction:
a) there may be an auto-renewal clause
b) the landlord may be required to formally notify you to vacate - a formality that a developer is more likely to miss than a landlord
c) what is the process if you simply overstay your lease - in some jursidictions it is really difficult to get rid of unwanted tenants

2) Are you sure your landlord has a copy of the lease and actually knows when your lease ends?

3) Effective immediately, be sure that all rent payments are done in such a way you can prove they were timely so landlord can't begin eviction for non-payment

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by FireSekr » Thu Apr 04, 2019 2:51 pm

renue74 wrote:
Thu Apr 04, 2019 2:12 pm
8foot7 wrote:
Thu Apr 04, 2019 1:08 pm
IMO some of these responses are well north of nuts. This isn't 11 months remaining on a new lease, this is four months and the OP already knew the lease would end and would have to move before now. OP already has to look for a new place in presumably less than four months. OP was already going to incur moving expenses. LL has no obligation to make up increased rent OP will pay in the future. Doubtful LL is ready to move on demo except for lease, at least right now. To expect thousands of dollars to move out 120 days early is, well, dumbfounding.

OP, please let us know what you decide and what happens. I'm curious who is right.
I agree with this. It's 4 months. It takes a month or more to design a project, some time to get permits approved, even more if there are environmental hoops to jump through. Then most vendors are weeks to months out before they can start.

You're not getting rich off this...I would ask for 2 months and be happy with 1 month of the amount of rent. Never hurts to ask for more with the expectations of less.

If the buyer paid $5M, I'm sure they can handle $2200. Anything else is just a pain to them. You are a spur in their saddle and at this point, they just want you gone. They don't want to deal with you.
It’s not nuts at all. My city publishes stats on buyouts. In 2018 there were 27 buyouts of 1bd apartments. The average buyout is $29,444. 1bd apartments in my are generally go for 2200-2700/month so similar range to OP. This is regardless of whether it’s month to month. 2bd+ had 31 buyouts at an average value of $77,595

Also, my city has a minimum relocation/buyout schedule. 1bd minimum buyout is $20,705 and for 2bd it’s $28,810. This is regardless of what your monthly rent is and regardless whether you’re on lease, have 4 months left, or are month to month

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leeks
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by leeks » Thu Apr 04, 2019 2:58 pm

We are all so curious now, please come back and tell us how much the landlord ends up paying you!

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by BolderBoy » Thu Apr 04, 2019 3:27 pm

Pickle11 wrote:
Thu Apr 04, 2019 8:00 am
Tell him to make you an offer.
... that you can't refuse.
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by 8foot7 » Thu Apr 04, 2019 3:31 pm

ssquared87 wrote:
Thu Apr 04, 2019 2:51 pm

It’s not nuts at all. My city publishes stats on buyouts. In 2018 there were 27 buyouts of 1bd apartments. The average buyout is $29,444. 1bd apartments in my are generally go for 2200-2700/month so similar range to OP. This is regardless of whether it’s month to month. 2bd+ had 31 buyouts at an average value of $77,595

Also, my city has a minimum relocation/buyout schedule. 1bd minimum buyout is $20,705 and for 2bd it’s $28,810. This is regardless of what your monthly rent is and regardless whether you’re on lease, have 4 months left, or are month to month
I guess I don't understand why a month to month lease has to be bought out, unless you're literally talking about making someone who has paid for 30 days move out on day 15.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by inbox788 » Thu Apr 04, 2019 3:42 pm

kflem20 wrote:
Thu Apr 04, 2019 7:45 am
Hi all,

My landlord passed away a few months ago and the building was sold to a new owner that has plans to demolish and renovate the entire building. There are 6 units in the building. I was the only person with a lease as the other tenants were month to month. They have all left and I remain the only one in the building with a lease.

The landlord has recently offered to buy out my lease. What is a fair amount to ask? My rent is $2200 per month. The building sold for 5 million.

I have 4 months remaining on my lease.

Thanks!
I've scanned all the responses, but didn't see anyone ask, where do you want to live? You're going to have to move now or in 4 months. First thing to ask the landlord is, what is his offer? Is he being reasonable? Have the other tenants moved out or received notices? Is this a good and big landlord that might have a nearby unit you'd want to move to? Or have resources that could help you find a suitable replacement?

Time is on your side, but not for long. In 2-3 months, you'll be where all the other tenants are, which is being shown to the door. A quick decision now is worth more to the landlord, and if things are delayed, he might as well wait it out. And he might have reasons to wait that you don't know about. And work can begin before you move out that may not be pleasant to deal with.

Is there any sort of rent control in the area? I'd be looking for at least some stability longer term, so a similar or better place for $2200 2-year lease with limited rent hikes and option to terminate with some notice would be good, plus moving costs.

How much stuff do you have to move and could you do it quickly yourself (with some help from friends) or is it simpler to hire professionals? You can ask for moving cash and do it yourself or cover the professionals. If you asked for the 4 months rent plus moving costs totaling about $10,000 with no strings attached and a quick move out, the landlord should be glad to pay that. You might extract more if he's eager and ready to get started, but if it takes too long or things sour, in 2 months, you're not likely to get all that much.

Still, finding a good place to live is more important, so if you can enlist the landlord into helping you, it increases the chance you find something faster, better or giving you a break on something similar.

Goes without saying, but be sure it's clear that you'll be getting back all your deposits and won't be assessed any cleaning fees on the place that's about to be demoed.

What area or city are you in?

https://homeguides.sfgate.com/apartment ... 72268.html
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by EddyB » Thu Apr 04, 2019 3:44 pm

8foot7 wrote:
Thu Apr 04, 2019 3:31 pm
ssquared87 wrote:
Thu Apr 04, 2019 2:51 pm

It’s not nuts at all. My city publishes stats on buyouts. In 2018 there were 27 buyouts of 1bd apartments. The average buyout is $29,444. 1bd apartments in my are generally go for 2200-2700/month so similar range to OP. This is regardless of whether it’s month to month. 2bd+ had 31 buyouts at an average value of $77,595

Also, my city has a minimum relocation/buyout schedule. 1bd minimum buyout is $20,705 and for 2bd it’s $28,810. This is regardless of what your monthly rent is and regardless whether you’re on lease, have 4 months left, or are month to month
I guess I don't understand why a month to month lease has to be bought out, unless you're literally talking about making someone who has paid for 30 days move out on day 15.
Landlord-tenant relationships are somewhat to highly regulated in some places. Advice from another market may be totally irrelevant.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Jags4186 » Thu Apr 04, 2019 3:51 pm

I’d ask for the moon. Does your lease have a right of renewal? If so you have him by the you know what.

You have below market rent. You likely would have stayed. Why would you be in any rush to leave? This is a huge inconvenience to you. What’s the absolute worst that could happen? You get nothing and you stay for 4 months.

You’d be shocked how miserable the OP could make the landlords life. Depending on the state and landlord tenant laws in effect it could take forever to get a tenant out.

A personal story, my grandparents lived in an apartment complex that was sold and to be turned into condos. Fortunately for my grandparents and unfortunately for the purchasers my parents were both attorneys. The condo eventually got them out—8 years after the initial purchase.
Last edited by Jags4186 on Thu Apr 04, 2019 3:59 pm, edited 1 time in total.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by TomatoTomahto » Thu Apr 04, 2019 3:54 pm

FelixTheCat wrote:
Thu Apr 04, 2019 12:48 pm
Is anyone on this thread a landlord? I would offer a free month's rent and your full security deposit to get out in 30 days. I would even consider 60 days free rent and move out. Otherwise, I would wait you out.
Felix, I’m not a landlord, and threads like this remind me that I will never be.

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Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Goal33 » Thu Apr 04, 2019 4:02 pm

Jags4186 wrote:
Thu Apr 04, 2019 3:51 pm
A personal story, my grandparents lived in an apartment complex that was sold and to be turned into condos. Fortunately for my grandparents and unfortunately for the purchasers my parents were both attorneys. The condo eventually got them out—8 years after the initial purchase.
Sounds annoying for everybody. Why was it so important that they don't move?
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Grt2bOutdoors » Thu Apr 04, 2019 4:12 pm

unclescrooge wrote:
Thu Apr 04, 2019 12:54 pm
jerkstore wrote:
Thu Apr 04, 2019 8:30 am
The value calculated to them or to you?

To you, inconvenience $$

To them, delayed project $$$$

Value to You:
You have an expected benefit of $600.00/month for 4 months based upon your lease (2800 FMV less lease rate 2200 = 600 x 4 = $2400). That is your current position.

2400 expected benefit
1500 moving expenses (or whatever)
2200 1 month rent as incentive to move
___
6100 + return deposit 2200 = 8300

That is not asking for the moon, that is reasonable. In the past, I paid a tenant 1.5 months rent to move to the adjacent unit + moving expenses.

The value to them will greatly exceed 8300 and was already considered when they bought the property, as the knew about your lease during the purchase.
+1
+2. But just to make this interesting, ask for $10k. If they counter, the OPs floor should be $8,300. It’s not unreasonable.
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by Grt2bOutdoors » Thu Apr 04, 2019 4:19 pm

renue74 wrote:
Thu Apr 04, 2019 2:12 pm
8foot7 wrote:
Thu Apr 04, 2019 1:08 pm
IMO some of these responses are well north of nuts. This isn't 11 months remaining on a new lease, this is four months and the OP already knew the lease would end and would have to move before now. OP already has to look for a new place in presumably less than four months. OP was already going to incur moving expenses. LL has no obligation to make up increased rent OP will pay in the future. Doubtful LL is ready to move on demo except for lease, at least right now. To expect thousands of dollars to move out 120 days early is, well, dumbfounding.

OP, please let us know what you decide and what happens. I'm curious who is right.
I agree with this. It's 4 months. It takes a month or more to design a project, some time to get permits approved, even more if there are environmental hoops to jump through. Then most vendors are weeks to months out before they can start.

You're not getting rich off this...I would ask for 2 months and be happy with 1 month of the amount of rent. Never hurts to ask for more with the expectations of less.

If the buyer paid $5M, I'm sure they can handle $2200. Anything else is just a pain to them. You are a spur in their saddle and at this point, they just want you gone. They don't want to deal with you.
But it doesn’t take 4 months to knock down a building. So first thing owner wants is a vacant building so they can take it down. In the meantime, architects are drafting the plans, permits being filled out and possibly meetings scheduled with zoning board. Owner will gladly pay $10k to move tenant out in 30 days. If OP can’t find apartment in 30 days, then 45-60 days.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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8foot7
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Re: Landlord looking to buy out my lease. Whats a reasonable price?

Post by 8foot7 » Thu Apr 04, 2019 4:22 pm

TomatoTomahto wrote:
Thu Apr 04, 2019 3:54 pm
FelixTheCat wrote:
Thu Apr 04, 2019 12:48 pm
Is anyone on this thread a landlord? I would offer a free month's rent and your full security deposit to get out in 30 days. I would even consider 60 days free rent and move out. Otherwise, I would wait you out.
Felix, I’m not a landlord, and threads like this remind me that I will never be.

I’m the short guy standing with 8foot7.
Let me know if you need something in the cabinets above the refrigerator. :sharebeer

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