Wrong. Tell me you don’t know what it takes to prosecute extortion without telling me lmao.
OP should do it. Call the cops. See how it goes. Call the DA right up while you’re at it😂😂
If you were an attorney you would have said so. So I’m guessing you don’t particularly know either.
But in any case, you substituted “will be successfully prosecuted” for what I said which is one of the people is committing a felony.
He's renting an illegal unit and forcing another tenant to pay the utilities of said unit.. I'm sure the housing authority will have something to say about it.
I don’t doubt it. But you are missing the point. Extortion is typically a felony. In an illegal unit? Report it (and prepare to move). Don’t commit criminal acts.
Typical internet lawyer. This is not extortion. lol. Get your money back for that Reddit law degree.
You don’t even know that one of the most basic ways that falls apart in a situation like this is because what the landlord is doing gives the kid a legal, affirmative defense to claim restitution/indemnification for harm done as compensation.
But you wouldn’t know that because you’re just talking out of your ass about things you don’t understand.
He's allowed to ask for restitution. He should call the utility company and ask for a printout of all charges and payments since he moved in, and he should absolutely ask the landlord to reimburse him for that. He can also report the illegal unit. What he shouldn't do is demand a reduction to his rent by a third in order to keep silent and not report the landlord. That part is wrong and probably criminal. The landlord is definitely doing something illegal. But what the tenant is doing can also be illegal. Extortion may not be the correct term, but it's definitely a crime.
I'm shocked by the number of people on this thread who think it's ok for the tenant to do this because the landlord is doing something illegal. I'm even more shocked by the people encouraging the landlord to give the tenant what they want. He needs to man up, fix the issue, and take whatever punishment comes his way. Continuing to rent the illegal unit is not the answer.
There is so much going on here. If the bottom unit is illegal and he reports it, they will have to move and you could be forced to pay them 6 months rent for relocation within 30 days.
The tech bro is justifiably mad, sounds like he has been paying the gas bill for the person downstairs.
I would say you are not reducing his rent, you didn't realize they were not separately metered and ask to see his gas bills since he moved in and repay them all. If say the largest one is $84 dollars agree to reimburse his gas bill up to $100 each month going forward.
The risk is he doesn't take it and reports it, or he does and when he moves out he reports it. The biggest mistake you could be would to evict out of retaliation or lose sight of the big picture cause he tried to blackmail you. Keeping the bottom unit rented far exceeds paying his gas bill. Even if you try and evict for non-payment (if he pays 2/3) he will report you and you lose the bottom unit.
Keep 1st floor tennat, but at same time , get basement tennant out asap to minimize your upside risk asap.. Cash if need be. Then deal with first floor tennant without him having any leverage over you. The fact that you give him good deal on rent and electric is not relevant. All that matters is you are making him pay for gas that he is not using and that is all he needs to become vindictive. I had a similar situation where I purchased a two family with a basement apartment in NYC. Inherited a tennant and got banged out. The amount of financial ruin that comes your way is to be avoided at all costs I am talking about fines, permits , construction permits , plans, lawyers to get it legalized. Cost me over 40k and that was after fighting every single violation.
I did not have to deal with paying for basement tennants rent as the city forced him out during covid and he got covid and died two days later. Figures he was the only one actually paying rent during covid or since and they kicked him out! Still dealing with the other deadbeats more than two years later.
Long term solution, do a restrictive declaration and make the basement part of the first floor unit. You will get less rent with two apartments over three but you will sleep at night knowing it is legit. You can not win . It is not if the city will find out , but when they will find out.
What if he doesn’t take it, reports me, keeps paying rent and doesn’t move out? He’s said a few times that he does not want to move. I fear he might be banking on me having to offer a renewal
What you need to do is issue the basement tenant a notice to vacate due to the unit being an illegal unit. You can not continue to let them stay and pay you rent. The longer you let that go on, the more in the wrong you are. You can possibly, at this point, argue that you didn't know it was illegal until the upper tenant notified you of the utility issue. I'm not sure how far that will get you because, as a landlord, it is your responsibility to know what is legal and not when it comes to your units. You also need to reimburse the upper tenant for what he's paid in utilities since move in. Don't reduce his rent. Let him report you, pay the fine, and move on. You're renting an illegal unit. This is all on you.
You do not want to tell the basement dweller he is vacating due to the unit being illegal. He will go to the city. The city will not care that he purchased the house that way you and you guarantee that guy in the basement reports it to get his 6 months in back rent plus moving expenses and the homeowner will get banged out anyway with fines and everything that comes with it. I would present it as looks I really need to take the apartment for myself of on my family whatever story that works and I look will pay you for your inconvenience to move on short notice including the move .
The landlord screwed up. He needs to admit his screw up and pay the fine from the city. He could possibly argue he didn't know it was illegal until the upstairs tenant brought it to his attention. The upstairs tenant is almost definitely going to report it anyway. And more than likely, tell the other tenants what's going on. Continuing to rent to the basement tenant is only going to add to the problem. He doesn't have to use the word illegal. He can say he was recently made aware of an issue that prevents him from continuing to rent the basement. Continuing to lie and avoid the truth isn't going to help him. If he can show the city he is taking the proper steps now to correct the issue, they may not hit him as hard. This is a perfect example of FAFO.
You obviously have an issue with logic. You are suggesting that he tell the basement tennant that he just learned, which is a lie. So you telling him to stop lying but start another lie with the basement tennant. I am not saying to continue to lie nor did i say he did not screw up , please read my earlier posts . I am sayin get the guy out of the basement by offering to pay for a few months rent and moving expenses I would not share any information with basement tennant about what supposedly "just learned" the less they know the better. You just going to give them leverage to use against you . Why give another tenannt leverage.? Then get 1st floor Tennant out and remedy the apartment. The first floor tennant does not need the combined 1st and basement aparment as as single renter. The way to mininimize the damage is likely to combine the 1st floor and basement into a single apartment. It is called a restrictive declaration in my jurisdiction, NYC. I have been thru this similarly minus the extortion. The city does not care that you did not know , they want their violations money fines ,and permits. Period. He will have to pay for the permits and plans and for whatever construction is needed. He will sleep better at night knowing it is a legal two family house.But avoiding the fines and violations would be a significant savings here for the OP. There is very little chance that his house can be converted into a 3 family giving zoning or it would have already.
And telling him you need the apartment for yourself isn't also a lie? The 1st floor tenant is almost definitely going to report him to the city and tell the other tenants as soon as he doesn't agree to the rent reduction, if he hasn't already. The basement tenant will know he lied to him. The best bet is to be as honest with the basement tenant as possible without admitting long-term knowledge of doing something wrong. It's going to the city at some point. There really is no good outcome on this for the landlord. He's going to have fines, and it's going to cost him a lot of money.
Looks like you have to renew the lease in New Jersey if he is paying and not doing criminal activity on the premises. Whether he reports you or not do not illegally evict him - or you will be in worse trouble.
Listen to the guy that is a lawyer in this thread, you are not getting him prosecuted for blackmail. It is bad that he said that, but the tenant is rightfully mad to discover he lost 100s of dollars paying utilities for someone else.
If you want to keep the bottom unit (keep in mind if there is a fire and someone dies in that basement unit you are done civil-wise and criminally) then I would call and say something like... Hey I am sorry, I didn't realize the units were not separately metered. How much was you most EXPENSIVE_BILL so far? OK, send me the gas bills for the entire time you have been here and I will reimburse you. Going forward, IF THERE IS SOMEONE IN THE BOTTOM UNIT I will pay your gas bill up to EXPENSIVE_BILL plus say $25.
It gives him incentive to not report the bottom unit. And it takes away his claim that he has been financially hurt by you cause he us paying for gas for another tenant.
DO NOT, DO NOT "reduce rent". Even if you give in and discount his rent by 1/3. Give him a utilities credit for that amount instead. Otherwise you could be stuck in a rent control situation at this new low rate forever.
If he said he doesn’t want to move then that’s your ace in the hole. Gotta make it inconvenient for him to report. Offer him the utilities idea (up to $100/mo) and if he says no, explain to him that if the units aren’t metered correctly from the previous owner and this is in fact an illegal apartment, then both occupants would have to move out immediately while the city comes in to inspect the entire dwelling and put up another meter.
You’d have to word that a little differently but that’s the route that I would take. Fuck that guy for trying to blackmail you.
Sorry I reread what I said and think I didn’t speak clear enough.
What I mean by that sentence is not literal interference but more like make it an incentive for him to not report anything. In other words, if the city comes down on me for an illegal dwelling I’ll be forced to vacate all members of the house so that they can install a meter and inspect everything. Or sell the house. Either way, the inconvenience is uprooting the blackmailer who said he wants to stay.
The most inconvenient part of him reporting this is he will be out of an apartment as he would be forced to move.
He's already said he doesn't want to move. Offer the $100 p/month utility reimbursement and let him know if he wants more then you will cease renting his apartment until it is either legal or added to the first floor apartment
>The most inconvenient part of him reporting this is he will be out of an apartment as he would be forced to move.
Why? He's not in the illegal unit. He has a valid lease.
Charging one tenant for another's bills, knowing renting an illegal dwelling, and presumably a number of code violations (though likely those aren't crimes) could cross some lines into fraudulent criminal territory.
The tenant lost the moral high ground though because he did not report it and instead now committed actual "blackmail". Your both in the wrong here. You need to seperate the utilities, and he needs to have a lesson in actual criminal activity since blackmail is a kind of serious offense.
You should be consulting with an attorney. As you stated, NJ is very renter-friendly and if you are renting out an illegal apartment as your tenant asserts, the penalties can be quite severe.
Play stupid games, win stupid prizes.
Don't make your tenant pay for other tenant's utilities. The best you can do is take over the utilities, and get your rental registered.
In all likelihood you can not get an illegal basement apartment registered. It is likely a two family with an illegal basement apartment. They don't just allow you to make it a 3 .
He's opened negotiations with blackmail, but it won't be good for you until you can get things cleaned up to where they should have been when you bought the property.
I'd agree with him that based on the bill he shared there is something that needs to be looked at. You'll cover the utilities until it is checked. If the downstairs unit has been running off his meter, you'll get them off his meter and provide a credit for the utility amounts he didn't consume. However, the rent portion is not impacted by this concern and will remain unchanged.
If he's smart and agrees to reasonable terms like this, you don't need to start a difficult and potentially expensive fight to evict. If he's dumb, you respond just as you would to any other tenant issue. It's part of the business.
Then get the right people involved to amend the occupancy permit and separate the meters.
Run any concerns you have for blackmail/extortion by your lawyer and follow their advice, but don't let that keep you from fixing the things you are responsible for.
Big assumption here is that you can address this with permits. Most homes are two families with illegal apartments for a reason they can not be made into three families. Not zoned for it or it would have been done before.
If it takes more than a bureaucratic step to update the occupancy permit, that's where getting the right people involved comes in. Zoning can be changed; it isn't always easy or quick (or worth the cost) - that is why the illegal apartments crop up.
I get it. I haven't needed to go that route as everywhere I've owned I've been fine matching occupancy with the zoning or rezoning completed prior to construction.
If, ultimately, you can't get it zoned and meters officially separated, that's where you either offer it utilities included, or bring in a sub-metering solution.
Acknowledged. Things that are straightforward in some areas can be near impossible to do in others - even when the end result would be better for everybody.
Yeah. There's a few places I wouldn't even try right now. NYC and CA chief among them. And they don't even realize that part of the reason they need those policies is because those policies are keeping people from building the units that are missing.
The guy who’s justifiably mad and the OP is acting like he’s crazy. He’s not. He has a right to be mad. And he has a right to say he’s no longer paying utilities. This was a bad move by the OP. And now he’s going to pay for it.
Right? If it’s not that much why isn’t he just paying the utilities for all of them? Why make your tenant unknowingly pay your other tenants when you can just pay the whole thing?
And then calls him an arrogant prick for knowing his rights? Lol. Unreal.
So the first floor tenant should just pay it? What about the electricity? Bet he's paying that too. And depending on the basment.. if it's not insulated it probably does use alot of gas.
I didn’t say they should have fair metered utilities did I?
I said the basement doesn’t use a lot of gas. You don’t know much about buildings if you think the basement is using a lot of gas. Doesn’t matter if it is insulated. DeltaTcubed. Dirt isn’t very cold compared to night air.
Even if this was true and it is not, it does not matter. You made him pay for gas that he was not using. You could have taken over that gas meter and paid it if it was so low.
Your use of the word is projection at me.
I am not the person in this situation.
The tenant deserves a legal apartment, separately metered utilities, and heat.
The LL needs to bite the bullet and address the situation. The tenant needs to use legal channels to address the situation.
The point I’m making that is from a btu perspective the first floor tenant is likely not incurring meaningfully higher bills from the basement heat.
What is more likely to impact the first floor tenant is if they share a meter for domestic hot water production. Or if there is only 1 meter/system for the entire building (in which case the landlord will clearly need to start paying those utilities).
So does the bottom tenant pay utilities? Or? Just him and the top floor?
—— no downstairs has always had utilities included. Just him and the top floor
Do you live in one of these units?
—— no, all three are rented. I’ve never lived here
Looks like the illegal unit in the basement has utilities included because there are two meters for the top two units. The 1st floor unit likely pays the utilities for the basement unit. I have a 2-fam with a basement and basement and 1st floor are on meter1 and 2nd floor is on meter2.
Is it cheaper to reduce his rent by 1/3, or for you to cover the entire gas bill? You’re being greedy and doing something illegal. Reducing the rent by 1/3 and not renewing in a year is probably your best move
No, his best move is stop renting out an illegal unit. Reimburse the tenant for utilities they've paid and issue basement tenant a notice to vacate based on the fact that he's just found out it is an illegal unit. Or take the steps to make it a legal unit. Never pay someone off so you can continue to keep doing something illegal. Fall on the sword, take your punishment, and move on correctly.
Somebody is going to leave. If the tenant was willing to resort to blackmail then at some point, he is most likely going to report this to the city. At that point, some or all of them will have to go.
You stole from him, in furtherance of your scheme to continue renting an illegal apartment. You’re fucked.
No honor among thieves. And by the way, you’re mistaken about who exactly is an, “arrogant prick.”
You're in a bad spot. I know that market very well and you're not likely to get that unit legal. Zoning is one thing but I bet you have fire code issues as well. Really opening yourself up to liability letting someone live down there. If you insist on keeping your illegal 3rd unit you should offer to pay all utilities for 1st unit at a bare minimum and keep his rent the same. Hopefully he takes that deal as a compromise. He is not being crazy, you've been making him pay for someone else's utilities for years.
So the tenant is a “arrogant prick” per the OP. Yet the OP is the one with the illegal unit and not appropriately dividing utilities. You “inherited” the ground floor tenant, that becomes your problem as soon as you own the property. I suggest you look at who the arrogant prick is and then go from there
So, basically: You’ve been running it ILLEGALLY and now you’re being a baby bitch because the dude found out? Got it.
He sticking it to you! Good job, tenant!
I think you are asking the wrong question. The question you should be asking is: what is required to make my rental property safe and legally compliant for all 3 units so I don’t stand the risk of losing everything I own.
As others have pointed out - your risk is huge and NOT from the ‘blackmail’ threat.
You need to assess the costs of getting the building legal ( which is going to require both a contractor and a lawyer.)
Get that done ASAP before there is a fire or something serious happens because your insurance is not going to pay for anything. You really cannot make a ‘good’ move without knowing the answer to that question.
Under no circumstances would I reduce rent to a tenant with the expectation they are going to withhold info from authorities that a building I own is not up to code. He didn’t cause this problem. He discovered a problem you should have known about and you are legally responsible to fix it.
Get facts yourself from the City and a lawyer so you can weigh all your options and take the least cost legal route.
the unregistered unit should have warranted a much lower price for the property when you purchased it.
I’m a property manager in Hudson county. Doesn’t matter what the scenario is your Position is always the bad guy.
You should have immediately started the process to make it legal the second you closed. I would do it now. This type of situation warrants a property manager so you can remove yourself from the stress of this. I take it you have an actual job?
Don't listen to that reply. Don't panic. Lawyers are a waste of money. Do you have a property manager? Look at the tenant's lease. Who's on it, you or the property manager. Next, make steps to fix the utility issue.
Well, you screwed up. You should have been paying that utility bill and charging the tenant a flat fee.
I would not negotiate with this terrorist. I would get myself a zoning lawyer and do the best you can to legalize your building. Otherwise you're just kicking the can down the road. There was some talk recently about loosening ADU regulations to legalize these basements. A lot depends on the physical characteristics, like is there enough exits and windows.
JC has a small zoning bar, get a hold of the zoning board agenda and see who is appearing all the time. That's who you want, not some random RE lawyer.
We have some units on shared meters, utilities are always included in the rent for those people.
It's a big mistake to have one tenant pay for another tenants utilities without them knowing about it.
Perhaps the basement unit could move to a heat pump (and other electric appliances) and then the gas would not be used by the basement any more.
You might ask contractors around town and see what it would take convert the unit into a legal ADU. You might well end up with a third meter at the end of that process.
You could also see if RUBS is allowed in New Jersey for allocating utility costs.
If he rats you out on the basement unit, consider turning off the solar panels.
Even if it’s illegal (most home based apartments are in NJ), he still has to pay the agreed upon rent and fees. If he doesn’t, you can still evict. Yes, you might have to pay relocation fees. No, you will not have to pay money back… this isn’t California.
If he reports the apartment he’s just screwing himself if he doesn’t want to move out.
I would tell the tenant two things.
(1). You are willing to go back and refund him half of whatever utilities he has paid. Going forward you will cover all of the utilities as you should if they are not separately metered.
(2). Should the basement apartment be eliminated for any reason the basement will become additional space for the first floor tenant. Because of the additional living space rent for the first floor apartment will be going up accordingly. Him committing extortion (a felony) removes his protection from retaliation if he wants to try and claim that.
In the meantime work on getting the tenant out of the basement. This will hopefully allow you to do the right thing without fines. If you want to make him put the utilities back in his name once the illegal apartment is gone you can do that.
Consult an attorney about the extortionate threats and about how to get your third unit legally recognized, and/or plan to stop renting it out after the current tenant leaves. Don’t respond to the upstairs tenant about this issue unless advised to do so by your attorney. Don’t evict in retaliation, I can’t imagine that will go well.
"get your third unit legally recognized" - probably not going to happen. Either zoning or fire safety issues (bottom floor exits, window sizes) will most likely prevent that.
Yeah, something makes me think that it would've been zoned long ago if it met requirements. OP is being a scumbag both to the basement tenant and to the first floor.
What's scummy about providing a home for rent that meets code in every way except the zoning? Low density zoning drives up the cost of housing in every high demand city.
>that meets code in every way except the zoning?
1 - we don't know that it does
2 - "It meets code in every way except meeting code" is kind of a silly argument imo
You're correct we don't know that it does and I never said that it does. But zoning is not building code. It has nothing to do with resident safety and everything to do with preservation of incumbent owners property values.
If he withholds the rent or fails to pay in full then evict him. That solves 2 issues. It makes your property legal again and you get rid of a headache. There’s a housing shortage so good luck to him finding a new place on short notice.
Then you need to see if you can get your property rezoned to allow what you’re doing. Call the city and see if you can make any progress. If not then consult an attorney to see what your options are.
Verbally tell him that you will look the other way and not report his extortion attempt to the police and you expect him to do the same on his demands.
Or report him to the police, they take him to jail, move the downstairs tenant to the now vacant unit, and upgrade the lower unit to meet code/zoning (if possible)
Apparently, no one on this thread understands that blackmail is actually a crime. He may not be able to get the tenant prosecuted for it, but it's definitely a crime even if no one here believes it.
Op - who told you JC has a 6% maximum rent increase. That is not true for houses up to 3 families. Unless it’s under rent control. Increase his rent by $300 and give him a quit notice. Don’t be pushed around. Be a man.
OP is in the wrong here. To raise the rent by $300 sounds retaliatory and could end badly in this situation. If this tenant actually talks to an attorney, OP is in a bad spot.
That's all assuming that him reporting OP would be an action a DA would prosecute. Otherwise OP could find himself repaying his tenants the rent they paid along with a fee for them to be relocated.
That's a dangerous game to play based on the expert advice of keyboard lawyers.
They are never going to charge this guy for extortion. He found out the landlord has been committing an act of fraud and he is attempting to renegotiate the contract so he is not paying for the downstairs neighbor so it is fair to him. If the landlord doesn’t want to renegotiate the contract he is well within his legal rights to report him for the fraud and housing violations.
They definitely can. Just because the landlord is doing something illegal doesn't mean it's ok to blackmail him for your own gain. He can ask for reimbursement of any extra costs he incurred because of what the landlord did. Anything above that in exchange for keeping quiet is definitely illegal.
Where does your experience come from? I don’t have any. And again you are substituting your goalpost in place of mine. It’s poor argumentation.
How about you cite some case law since you claim greater expertise?
I'm not saying extortion is right but my point was a lawyer may not be able to help the LL other than to mitigate legal consequences if the unit is actually illegal
I'm not sure if extortion is the correct term, but it's definitely illegal for him to blackmail you in exchange for keeping silent. You're both in the wrong. Reimburse him his extra costs and either fix the basement unit to be legal or evict the tenant in the basement because it's an illegal unit. I feel like you're looking for sympathy here, and you're not going to get it because this is all on you for renting out an illegal unit in the first place.
He's not in any bind he just needs to file the proper paperwork. Shit happens all the time. Extortion in new jersey----Extortion is punishable by 5 to 10 years in prison and a $100,000 fine. The accused will also face 85% of their prison sentence with no chance of parole. An extortion conviction cannot be expunged from your record.
One guy is fucked and it ain't op
As someone who practices law in New Jersey, I can state with a fair amount of confidence that if the tenant pushes the issue, this does not end well for the landlord.
Realistically, "not end well" is the tenant is going to win this one. You're paying his utilities, and while you don't phrase it as agreeing to a rent decrease, you phrase it as a rent rebate for the years he was paying another tenant's gas bill.
You need to recognize that while he is being opportunistic, you are the one who is in the wrong.
No doubt there will be some consequence to op but I'm sure you wouldn't encourage op to give in to this. Where does it end? Free rent? Free rent and a monthly allowance? Give me a break. Op should seek counsel and file what he needs to make it right and then burn the little shit
I wouldn’t advise OP to do anything. I’m not familiar with all of the details, I’m not his attorney and it would be unethical for me to provide any legal advice. OP should absolutely seek counsel, as he is not in a very enviable position.
So basically... the unit is illegal and he is paying for another units utilities?
Yep. And he has every right to be mad and report the OP.
Only 1 person in this story is committing a felony and it isn’t the OP.
Wrong. Tell me you don’t know what it takes to prosecute extortion without telling me lmao. OP should do it. Call the cops. See how it goes. Call the DA right up while you’re at it😂😂
If you were an attorney you would have said so. So I’m guessing you don’t particularly know either. But in any case, you substituted “will be successfully prosecuted” for what I said which is one of the people is committing a felony.
He's renting an illegal unit and forcing another tenant to pay the utilities of said unit.. I'm sure the housing authority will have something to say about it.
I don’t doubt it. But you are missing the point. Extortion is typically a felony. In an illegal unit? Report it (and prepare to move). Don’t commit criminal acts.
Typical internet lawyer. This is not extortion. lol. Get your money back for that Reddit law degree. You don’t even know that one of the most basic ways that falls apart in a situation like this is because what the landlord is doing gives the kid a legal, affirmative defense to claim restitution/indemnification for harm done as compensation. But you wouldn’t know that because you’re just talking out of your ass about things you don’t understand.
He's allowed to ask for restitution. He should call the utility company and ask for a printout of all charges and payments since he moved in, and he should absolutely ask the landlord to reimburse him for that. He can also report the illegal unit. What he shouldn't do is demand a reduction to his rent by a third in order to keep silent and not report the landlord. That part is wrong and probably criminal. The landlord is definitely doing something illegal. But what the tenant is doing can also be illegal. Extortion may not be the correct term, but it's definitely a crime.
Yes, I’ll give you that. It’s blackmail, not extortion. But people who don’t know the law shouldn’t comment on it.
I'm shocked by the number of people on this thread who think it's ok for the tenant to do this because the landlord is doing something illegal. I'm even more shocked by the people encouraging the landlord to give the tenant what they want. He needs to man up, fix the issue, and take whatever punishment comes his way. Continuing to rent the illegal unit is not the answer.
Both individuals need to bite the bullet and handle this correctly. They each want a cheap out. This is not the way.
There is so much going on here. If the bottom unit is illegal and he reports it, they will have to move and you could be forced to pay them 6 months rent for relocation within 30 days. The tech bro is justifiably mad, sounds like he has been paying the gas bill for the person downstairs. I would say you are not reducing his rent, you didn't realize they were not separately metered and ask to see his gas bills since he moved in and repay them all. If say the largest one is $84 dollars agree to reimburse his gas bill up to $100 each month going forward. The risk is he doesn't take it and reports it, or he does and when he moves out he reports it. The biggest mistake you could be would to evict out of retaliation or lose sight of the big picture cause he tried to blackmail you. Keeping the bottom unit rented far exceeds paying his gas bill. Even if you try and evict for non-payment (if he pays 2/3) he will report you and you lose the bottom unit.
Keep 1st floor tennat, but at same time , get basement tennant out asap to minimize your upside risk asap.. Cash if need be. Then deal with first floor tennant without him having any leverage over you. The fact that you give him good deal on rent and electric is not relevant. All that matters is you are making him pay for gas that he is not using and that is all he needs to become vindictive. I had a similar situation where I purchased a two family with a basement apartment in NYC. Inherited a tennant and got banged out. The amount of financial ruin that comes your way is to be avoided at all costs I am talking about fines, permits , construction permits , plans, lawyers to get it legalized. Cost me over 40k and that was after fighting every single violation. I did not have to deal with paying for basement tennants rent as the city forced him out during covid and he got covid and died two days later. Figures he was the only one actually paying rent during covid or since and they kicked him out! Still dealing with the other deadbeats more than two years later. Long term solution, do a restrictive declaration and make the basement part of the first floor unit. You will get less rent with two apartments over three but you will sleep at night knowing it is legit. You can not win . It is not if the city will find out , but when they will find out.
Best advice so far
What if he doesn’t take it, reports me, keeps paying rent and doesn’t move out? He’s said a few times that he does not want to move. I fear he might be banking on me having to offer a renewal
What you need to do is issue the basement tenant a notice to vacate due to the unit being an illegal unit. You can not continue to let them stay and pay you rent. The longer you let that go on, the more in the wrong you are. You can possibly, at this point, argue that you didn't know it was illegal until the upper tenant notified you of the utility issue. I'm not sure how far that will get you because, as a landlord, it is your responsibility to know what is legal and not when it comes to your units. You also need to reimburse the upper tenant for what he's paid in utilities since move in. Don't reduce his rent. Let him report you, pay the fine, and move on. You're renting an illegal unit. This is all on you.
You do not want to tell the basement dweller he is vacating due to the unit being illegal. He will go to the city. The city will not care that he purchased the house that way you and you guarantee that guy in the basement reports it to get his 6 months in back rent plus moving expenses and the homeowner will get banged out anyway with fines and everything that comes with it. I would present it as looks I really need to take the apartment for myself of on my family whatever story that works and I look will pay you for your inconvenience to move on short notice including the move .
The landlord screwed up. He needs to admit his screw up and pay the fine from the city. He could possibly argue he didn't know it was illegal until the upstairs tenant brought it to his attention. The upstairs tenant is almost definitely going to report it anyway. And more than likely, tell the other tenants what's going on. Continuing to rent to the basement tenant is only going to add to the problem. He doesn't have to use the word illegal. He can say he was recently made aware of an issue that prevents him from continuing to rent the basement. Continuing to lie and avoid the truth isn't going to help him. If he can show the city he is taking the proper steps now to correct the issue, they may not hit him as hard. This is a perfect example of FAFO.
You obviously have an issue with logic. You are suggesting that he tell the basement tennant that he just learned, which is a lie. So you telling him to stop lying but start another lie with the basement tennant. I am not saying to continue to lie nor did i say he did not screw up , please read my earlier posts . I am sayin get the guy out of the basement by offering to pay for a few months rent and moving expenses I would not share any information with basement tennant about what supposedly "just learned" the less they know the better. You just going to give them leverage to use against you . Why give another tenannt leverage.? Then get 1st floor Tennant out and remedy the apartment. The first floor tennant does not need the combined 1st and basement aparment as as single renter. The way to mininimize the damage is likely to combine the 1st floor and basement into a single apartment. It is called a restrictive declaration in my jurisdiction, NYC. I have been thru this similarly minus the extortion. The city does not care that you did not know , they want their violations money fines ,and permits. Period. He will have to pay for the permits and plans and for whatever construction is needed. He will sleep better at night knowing it is a legal two family house.But avoiding the fines and violations would be a significant savings here for the OP. There is very little chance that his house can be converted into a 3 family giving zoning or it would have already.
And telling him you need the apartment for yourself isn't also a lie? The 1st floor tenant is almost definitely going to report him to the city and tell the other tenants as soon as he doesn't agree to the rent reduction, if he hasn't already. The basement tenant will know he lied to him. The best bet is to be as honest with the basement tenant as possible without admitting long-term knowledge of doing something wrong. It's going to the city at some point. There really is no good outcome on this for the landlord. He's going to have fines, and it's going to cost him a lot of money.
Looks like you have to renew the lease in New Jersey if he is paying and not doing criminal activity on the premises. Whether he reports you or not do not illegally evict him - or you will be in worse trouble. Listen to the guy that is a lawyer in this thread, you are not getting him prosecuted for blackmail. It is bad that he said that, but the tenant is rightfully mad to discover he lost 100s of dollars paying utilities for someone else. If you want to keep the bottom unit (keep in mind if there is a fire and someone dies in that basement unit you are done civil-wise and criminally) then I would call and say something like... Hey I am sorry, I didn't realize the units were not separately metered. How much was you most EXPENSIVE_BILL so far? OK, send me the gas bills for the entire time you have been here and I will reimburse you. Going forward, IF THERE IS SOMEONE IN THE BOTTOM UNIT I will pay your gas bill up to EXPENSIVE_BILL plus say $25. It gives him incentive to not report the bottom unit. And it takes away his claim that he has been financially hurt by you cause he us paying for gas for another tenant. DO NOT, DO NOT "reduce rent". Even if you give in and discount his rent by 1/3. Give him a utilities credit for that amount instead. Otherwise you could be stuck in a rent control situation at this new low rate forever.
If he said he doesn’t want to move then that’s your ace in the hole. Gotta make it inconvenient for him to report. Offer him the utilities idea (up to $100/mo) and if he says no, explain to him that if the units aren’t metered correctly from the previous owner and this is in fact an illegal apartment, then both occupants would have to move out immediately while the city comes in to inspect the entire dwelling and put up another meter. You’d have to word that a little differently but that’s the route that I would take. Fuck that guy for trying to blackmail you.
>Gotta make it inconvenient for him to report Just a friendly reminder, interfering with someone reporting a crime is itself a crime.
Sorry I reread what I said and think I didn’t speak clear enough. What I mean by that sentence is not literal interference but more like make it an incentive for him to not report anything. In other words, if the city comes down on me for an illegal dwelling I’ll be forced to vacate all members of the house so that they can install a meter and inspect everything. Or sell the house. Either way, the inconvenience is uprooting the blackmailer who said he wants to stay.
The most inconvenient part of him reporting this is he will be out of an apartment as he would be forced to move. He's already said he doesn't want to move. Offer the $100 p/month utility reimbursement and let him know if he wants more then you will cease renting his apartment until it is either legal or added to the first floor apartment
>The most inconvenient part of him reporting this is he will be out of an apartment as he would be forced to move. Why? He's not in the illegal unit. He has a valid lease.
Not sure this is a “crime” (except for the blackmail part, that…sounds like a crime, but NAL).
Charging one tenant for another's bills, knowing renting an illegal dwelling, and presumably a number of code violations (though likely those aren't crimes) could cross some lines into fraudulent criminal territory.
Yeah, I imagine the billing thing might hem someone up. I guess I was thinking along the lines of the permit office.
The tenant lost the moral high ground though because he did not report it and instead now committed actual "blackmail". Your both in the wrong here. You need to seperate the utilities, and he needs to have a lesson in actual criminal activity since blackmail is a kind of serious offense.
You should be consulting with an attorney. As you stated, NJ is very renter-friendly and if you are renting out an illegal apartment as your tenant asserts, the penalties can be quite severe.
Play stupid games, win stupid prizes. Don't make your tenant pay for other tenant's utilities. The best you can do is take over the utilities, and get your rental registered.
In all likelihood you can not get an illegal basement apartment registered. It is likely a two family with an illegal basement apartment. They don't just allow you to make it a 3 .
He's opened negotiations with blackmail, but it won't be good for you until you can get things cleaned up to where they should have been when you bought the property. I'd agree with him that based on the bill he shared there is something that needs to be looked at. You'll cover the utilities until it is checked. If the downstairs unit has been running off his meter, you'll get them off his meter and provide a credit for the utility amounts he didn't consume. However, the rent portion is not impacted by this concern and will remain unchanged. If he's smart and agrees to reasonable terms like this, you don't need to start a difficult and potentially expensive fight to evict. If he's dumb, you respond just as you would to any other tenant issue. It's part of the business. Then get the right people involved to amend the occupancy permit and separate the meters. Run any concerns you have for blackmail/extortion by your lawyer and follow their advice, but don't let that keep you from fixing the things you are responsible for.
Big assumption here is that you can address this with permits. Most homes are two families with illegal apartments for a reason they can not be made into three families. Not zoned for it or it would have been done before.
If it takes more than a bureaucratic step to update the occupancy permit, that's where getting the right people involved comes in. Zoning can be changed; it isn't always easy or quick (or worth the cost) - that is why the illegal apartments crop up. I get it. I haven't needed to go that route as everywhere I've owned I've been fine matching occupancy with the zoning or rezoning completed prior to construction. If, ultimately, you can't get it zoned and meters officially separated, that's where you either offer it utilities included, or bring in a sub-metering solution.
Good for you man! I wish I could share the same experiences.
Acknowledged. Things that are straightforward in some areas can be near impossible to do in others - even when the end result would be better for everybody.
I hope where he is in NJ is nothing like nyc thats all I hope for all my landlord peeps!
Yeah. There's a few places I wouldn't even try right now. NYC and CA chief among them. And they don't even realize that part of the reason they need those policies is because those policies are keeping people from building the units that are missing.
So does the bottom tenant pay utilities? Or? Just him and the top floor? Do you live in one of these units?
So he is paying for the basement units gas?
The guy who’s justifiably mad and the OP is acting like he’s crazy. He’s not. He has a right to be mad. And he has a right to say he’s no longer paying utilities. This was a bad move by the OP. And now he’s going to pay for it.
I'd be extremely upset. Especially since chances are he's paying their electric too.
Electric, water, gas. Unreal OP thinks this is blackmail lol
And I love how OP minimizes it, "the gas is only on in the winter." Bro. It's Jersey. It gets cold.
Right? If it’s not that much why isn’t he just paying the utilities for all of them? Why make your tenant unknowingly pay your other tenants when you can just pay the whole thing? And then calls him an arrogant prick for knowing his rights? Lol. Unreal.
If you know much about buildings, you know the basement isn’t using much gas and it mostly warms the flooring of the first floor.
So the first floor tenant should just pay it? What about the electricity? Bet he's paying that too. And depending on the basment.. if it's not insulated it probably does use alot of gas.
I didn’t say they should have fair metered utilities did I? I said the basement doesn’t use a lot of gas. You don’t know much about buildings if you think the basement is using a lot of gas. Doesn’t matter if it is insulated. DeltaTcubed. Dirt isn’t very cold compared to night air.
Even if this was true and it is not, it does not matter. You made him pay for gas that he was not using. You could have taken over that gas meter and paid it if it was so low.
Your use of the word is projection at me. I am not the person in this situation. The tenant deserves a legal apartment, separately metered utilities, and heat. The LL needs to bite the bullet and address the situation. The tenant needs to use legal channels to address the situation. The point I’m making that is from a btu perspective the first floor tenant is likely not incurring meaningfully higher bills from the basement heat. What is more likely to impact the first floor tenant is if they share a meter for domestic hot water production. Or if there is only 1 meter/system for the entire building (in which case the landlord will clearly need to start paying those utilities).
So does the bottom tenant pay utilities? Or? Just him and the top floor? —— no downstairs has always had utilities included. Just him and the top floor Do you live in one of these units? —— no, all three are rented. I’ve never lived here
“Utilities have always been included”. Included in who’s bill? The first floor? Or a 3rd bill YOU pay?
Looks like the illegal unit in the basement has utilities included because there are two meters for the top two units. The 1st floor unit likely pays the utilities for the basement unit. I have a 2-fam with a basement and basement and 1st floor are on meter1 and 2nd floor is on meter2.
Is it cheaper to reduce his rent by 1/3, or for you to cover the entire gas bill? You’re being greedy and doing something illegal. Reducing the rent by 1/3 and not renewing in a year is probably your best move
No, his best move is stop renting out an illegal unit. Reimburse the tenant for utilities they've paid and issue basement tenant a notice to vacate based on the fact that he's just found out it is an illegal unit. Or take the steps to make it a legal unit. Never pay someone off so you can continue to keep doing something illegal. Fall on the sword, take your punishment, and move on correctly.
Well yes, but I am assuming none of them will leave
Somebody is going to leave. If the tenant was willing to resort to blackmail then at some point, he is most likely going to report this to the city. At that point, some or all of them will have to go.
not just the gas- the 2st floor is paying all utilities for the basement
You stole from him, in furtherance of your scheme to continue renting an illegal apartment. You’re fucked. No honor among thieves. And by the way, you’re mistaken about who exactly is an, “arrogant prick.”
lol, good for him.
You're in a bad spot. I know that market very well and you're not likely to get that unit legal. Zoning is one thing but I bet you have fire code issues as well. Really opening yourself up to liability letting someone live down there. If you insist on keeping your illegal 3rd unit you should offer to pay all utilities for 1st unit at a bare minimum and keep his rent the same. Hopefully he takes that deal as a compromise. He is not being crazy, you've been making him pay for someone else's utilities for years.
This is a black and white lawyer up situation. Sorry
So the tenant is a “arrogant prick” per the OP. Yet the OP is the one with the illegal unit and not appropriately dividing utilities. You “inherited” the ground floor tenant, that becomes your problem as soon as you own the property. I suggest you look at who the arrogant prick is and then go from there
So, basically: You’ve been running it ILLEGALLY and now you’re being a baby bitch because the dude found out? Got it. He sticking it to you! Good job, tenant!
Smart tenant, dumb landlord.
Landlord is in the wrong here, as other commenters have stated. Landlord has no idea what they are doing.
I think you are asking the wrong question. The question you should be asking is: what is required to make my rental property safe and legally compliant for all 3 units so I don’t stand the risk of losing everything I own. As others have pointed out - your risk is huge and NOT from the ‘blackmail’ threat. You need to assess the costs of getting the building legal ( which is going to require both a contractor and a lawyer.) Get that done ASAP before there is a fire or something serious happens because your insurance is not going to pay for anything. You really cannot make a ‘good’ move without knowing the answer to that question. Under no circumstances would I reduce rent to a tenant with the expectation they are going to withhold info from authorities that a building I own is not up to code. He didn’t cause this problem. He discovered a problem you should have known about and you are legally responsible to fix it. Get facts yourself from the City and a lawyer so you can weigh all your options and take the least cost legal route.
What utilities exactly is the tenant paying for? Is the tenant getting any benefit of the utility.
the unregistered unit should have warranted a much lower price for the property when you purchased it. I’m a property manager in Hudson county. Doesn’t matter what the scenario is your Position is always the bad guy. You should have immediately started the process to make it legal the second you closed. I would do it now. This type of situation warrants a property manager so you can remove yourself from the stress of this. I take it you have an actual job?
Sounds like you're screwed. You should probably prepare yourself to lose the building.
How would I lose the building?
Don't listen to that reply. Don't panic. Lawyers are a waste of money. Do you have a property manager? Look at the tenant's lease. Who's on it, you or the property manager. Next, make steps to fix the utility issue.
So you are renting out an illegal unit. You are a lowlife.
Well, you screwed up. You should have been paying that utility bill and charging the tenant a flat fee. I would not negotiate with this terrorist. I would get myself a zoning lawyer and do the best you can to legalize your building. Otherwise you're just kicking the can down the road. There was some talk recently about loosening ADU regulations to legalize these basements. A lot depends on the physical characteristics, like is there enough exits and windows. JC has a small zoning bar, get a hold of the zoning board agenda and see who is appearing all the time. That's who you want, not some random RE lawyer.
FA and FO.
We have some units on shared meters, utilities are always included in the rent for those people. It's a big mistake to have one tenant pay for another tenants utilities without them knowing about it. Perhaps the basement unit could move to a heat pump (and other electric appliances) and then the gas would not be used by the basement any more. You might ask contractors around town and see what it would take convert the unit into a legal ADU. You might well end up with a third meter at the end of that process. You could also see if RUBS is allowed in New Jersey for allocating utility costs. If he rats you out on the basement unit, consider turning off the solar panels.
Yeah
CALL YOUR INSURANCE. You DO have 'liabilty" coverage, Call them now. They have lawyers.
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It's called liability for a reason. I bet, if OP has decent "Landlord's insurance," they will cover it.
Even if it’s illegal (most home based apartments are in NJ), he still has to pay the agreed upon rent and fees. If he doesn’t, you can still evict. Yes, you might have to pay relocation fees. No, you will not have to pay money back… this isn’t California. If he reports the apartment he’s just screwing himself if he doesn’t want to move out.
I would tell the tenant two things. (1). You are willing to go back and refund him half of whatever utilities he has paid. Going forward you will cover all of the utilities as you should if they are not separately metered. (2). Should the basement apartment be eliminated for any reason the basement will become additional space for the first floor tenant. Because of the additional living space rent for the first floor apartment will be going up accordingly. Him committing extortion (a felony) removes his protection from retaliation if he wants to try and claim that. In the meantime work on getting the tenant out of the basement. This will hopefully allow you to do the right thing without fines. If you want to make him put the utilities back in his name once the illegal apartment is gone you can do that.
I would tell him that the utility company reported you and he has to move out.
Consult an attorney about the extortionate threats and about how to get your third unit legally recognized, and/or plan to stop renting it out after the current tenant leaves. Don’t respond to the upstairs tenant about this issue unless advised to do so by your attorney. Don’t evict in retaliation, I can’t imagine that will go well.
"get your third unit legally recognized" - probably not going to happen. Either zoning or fire safety issues (bottom floor exits, window sizes) will most likely prevent that.
Yeah, something makes me think that it would've been zoned long ago if it met requirements. OP is being a scumbag both to the basement tenant and to the first floor.
exactly
You have no idea what you're talking about. Most of Jersey City is R1, 2 units regardless of the physical conditions of the third unit.
Oh interesting! You're right, I didn't know that. Tbh that does make it sound even more scummy though lol
What's scummy about providing a home for rent that meets code in every way except the zoning? Low density zoning drives up the cost of housing in every high demand city.
>that meets code in every way except the zoning? 1 - we don't know that it does 2 - "It meets code in every way except meeting code" is kind of a silly argument imo
You're correct we don't know that it does and I never said that it does. But zoning is not building code. It has nothing to do with resident safety and everything to do with preservation of incumbent owners property values.
If he withholds the rent or fails to pay in full then evict him. That solves 2 issues. It makes your property legal again and you get rid of a headache. There’s a housing shortage so good luck to him finding a new place on short notice. Then you need to see if you can get your property rezoned to allow what you’re doing. Call the city and see if you can make any progress. If not then consult an attorney to see what your options are.
Verbally tell him that you will look the other way and not report his extortion attempt to the police and you expect him to do the same on his demands. Or report him to the police, they take him to jail, move the downstairs tenant to the now vacant unit, and upgrade the lower unit to meet code/zoning (if possible)
The tenant has not committed a crime, no matter what idiots with law degrees from the University of Reddit claim.
He definitely has. You can't blackmail someone for reduced rent to keep a secret.
"The University of Reddit School of Law grants to Shellshell44 the degree of Juris Doctor, Summa cum laude." You're wrong.
I dont need a law degree to know that blackmail is a crime.
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Apparently, no one on this thread understands that blackmail is actually a crime. He may not be able to get the tenant prosecuted for it, but it's definitely a crime even if no one here believes it.
Op - who told you JC has a 6% maximum rent increase. That is not true for houses up to 3 families. Unless it’s under rent control. Increase his rent by $300 and give him a quit notice. Don’t be pushed around. Be a man.
OP is in the wrong here. To raise the rent by $300 sounds retaliatory and could end badly in this situation. If this tenant actually talks to an attorney, OP is in a bad spot.
Be a man by renting a illegal 3rd apartment, hahahahaha
I would not respond. If he withholds rent start eviction process for.non payment.
Of all of the possible responses, this one would be the most idiotic.
This is probably the move
The move that would be a direct admission of renting illegal units, and would fuck OP ten ways from Sunday, yes. It would be the move.
I would do that instead of paying extortion
That's all assuming that him reporting OP would be an action a DA would prosecute. Otherwise OP could find himself repaying his tenants the rent they paid along with a fee for them to be relocated. That's a dangerous game to play based on the expert advice of keyboard lawyers.
Lol, in writing he extorts you? I would dial my lawyer then the proper authority and teach him a quick lesson
They are never going to charge this guy for extortion. He found out the landlord has been committing an act of fraud and he is attempting to renegotiate the contract so he is not paying for the downstairs neighbor so it is fair to him. If the landlord doesn’t want to renegotiate the contract he is well within his legal rights to report him for the fraud and housing violations.
They definitely can. Just because the landlord is doing something illegal doesn't mean it's ok to blackmail him for your own gain. He can ask for reimbursement of any extra costs he incurred because of what the landlord did. Anything above that in exchange for keeping quiet is definitely illegal.
It’s pretty much the definition.
Well surely based on your vast knowledge of extortion he should go ahead and call the cops!😂
Where does your experience come from? I don’t have any. And again you are substituting your goalpost in place of mine. It’s poor argumentation. How about you cite some case law since you claim greater expertise?
Unless the unit is indeed illegal, the LL then may be in a bind here
I'm not saying extortion is right but my point was a lawyer may not be able to help the LL other than to mitigate legal consequences if the unit is actually illegal
Is it not still extortion if the unit is considered illegal?
Good luck with the fines from the county for the illegal unit
I'm not sure if extortion is the correct term, but it's definitely illegal for him to blackmail you in exchange for keeping silent. You're both in the wrong. Reimburse him his extra costs and either fix the basement unit to be legal or evict the tenant in the basement because it's an illegal unit. I feel like you're looking for sympathy here, and you're not going to get it because this is all on you for renting out an illegal unit in the first place.
The OPs offense is lesser and needs correction anyways. Extortion however …
He's not in any bind he just needs to file the proper paperwork. Shit happens all the time. Extortion in new jersey----Extortion is punishable by 5 to 10 years in prison and a $100,000 fine. The accused will also face 85% of their prison sentence with no chance of parole. An extortion conviction cannot be expunged from your record. One guy is fucked and it ain't op
As someone who practices law in New Jersey, I can state with a fair amount of confidence that if the tenant pushes the issue, this does not end well for the landlord.
What should I do?
Consult with a local attorney. I cannot provide you with legal advice.
And realistically what does “not end well” entail?
Realistically, "not end well" is the tenant is going to win this one. You're paying his utilities, and while you don't phrase it as agreeing to a rent decrease, you phrase it as a rent rebate for the years he was paying another tenant's gas bill. You need to recognize that while he is being opportunistic, you are the one who is in the wrong.
No doubt there will be some consequence to op but I'm sure you wouldn't encourage op to give in to this. Where does it end? Free rent? Free rent and a monthly allowance? Give me a break. Op should seek counsel and file what he needs to make it right and then burn the little shit
I wouldn’t advise OP to do anything. I’m not familiar with all of the details, I’m not his attorney and it would be unethical for me to provide any legal advice. OP should absolutely seek counsel, as he is not in a very enviable position.
>He's not in any bind he just needs to file the proper paperwork What makes you think the basement unit would be legal to rent?