Sell Your Hudson Valley Rental Property — Tenant-Occupied, As-Is, Fast

Getting Out of a Rental in Westchester, Rockland or Putnam

The landlords who call us are rarely large operators. More often it is someone who bought a two-family in Yonkers or Mount Vernon decades ago and lived downstairs for a while, a family that started renting out a parent's house in Spring Valley or Nanuet instead of selling it, or an owner with one or two units in Peekskill, Ossining or Carmel that were meant to be a retirement plan. The reasons for selling vary. A tenant has stopped paying. The boiler is on its last season. The tax bill has risen faster than the rent for years. Or the owner is simply finished with late-night phone calls.

New York's rules for landlords changed sharply in 2019, and a sale has to work within them. Below we cover what the current law requires of an owner, how a sale with tenants in place actually closes, how to tell whether your building is rent-stabilised, where Good Cause Eviction fits in, what a realistic eviction looks like in a local court, how to structure a cash-for-keys agreement, and how the IRS and New York tax the gain. For the local picture, see our pages on selling in Westchester County and Rockland County.

What the 2019 Tenant Protection Law Changed for Small Landlords

In June 2019 Albany passed the Housing Stability and Tenant Protection Act. Earlier rent laws mostly concerned regulated apartments. Much of this one applies statewide to every residential tenancy, including a rented single-family house and the second unit of an owner-occupied two-family. The provisions sellers run into most often:

• Security deposits. A deposit can be no more than one month's rent. When the tenant moves out, the landlord has 14 days to return it or to give the tenant an itemised statement of deductions, and a landlord who misses that deadline loses the right to keep any of it. Once either side gives notice that the tenancy is ending, the landlord must also tell the tenant in writing that they may ask for an inspection before they leave.
• Notice before non-renewal or a large rent increase. Real Property Law §226-c ties the notice to how long the tenant has been there: 30 days for less than a year, 60 days for one to two years, and 90 days for two years or more. The same notice applies to a rent increase of 5% or more.
• Late rent. A late fee is capped at $50 or 5% of the monthly rent, whichever is less, and cannot be charged until the rent is more than five days late. If rent has not arrived within five days of the due date, the landlord is expected to send written notice by certified mail. Skipping that step can be raised as a defence in a nonpayment case.
• Lockouts are a crime. Changing the locks, removing a tenant's belongings or cutting off utilities to force someone out is an unlawful eviction under RPAPL §768. It carries civil penalties and can be charged as a misdemeanour.

None of this prevents a sale. What it does mean is that clearing a house before you sell takes longer than it used to, and that the paperwork you hand a buyer now carries more weight.

Selling With the Tenants Still Living There

A house does not have to be empty to be sold in New York. The buyer takes title subject to the existing leases, so the rent, the end date and the deposit all carry over. A month-to-month tenant remains month-to-month under the new owner, who must give the same statutory notice as you would to end the tenancy. For a landlord who wants out, an occupied sale is usually the shortest route.

What the buyer's attorney will ask you for

• A copy of every current lease and renewal, plus any side agreements about parking, storage or included utilities.
• A rent roll listing each unit's rent, due date, the date the tenant moved in and any arrears.
• The amount of each security deposit and the bank where it is held. In a building with six or more units, New York requires deposits to be kept in an interest-bearing account at a bank in the state.
• Any open housing court case, rent-assistance application or code violation.
• The certificate of occupancy, which shows the legal number of units. A two-family being used as three, or a basement apartment with no permit, is not unusual in older housing stock here. It will not necessarily kill a sale, but the buyer has to know about it and price it.

Handing over the security deposits

General Obligations Law §7-105 sets out what happens to deposits when a rental changes hands. Within five days of the conveyance, the seller turns the deposits over to the buyer and notifies each tenant by registered or certified mail of the new owner's name and address. Until that is done, the seller remains responsible to the tenant for the money. On our purchases, the attorneys credit the deposits at the closing table and the tenant letters go out right after.

Showings and access

Outside New York City, no general statute sets a fixed notice period for a landlord who wants to show an occupied house, so the lease usually governs, and reasonable written notice is the safe course. A tenant who is facing weeks of open houses has every reason to be uncooperative. We normally need one visit to each unit, arranged around the tenant's schedule, and sometimes photos are enough to finish the offer.

Tenants who pay with a voucher

If a tenant pays part of the rent through a Housing Choice Voucher, tell the housing agency that administers it about the sale. The agency's payment contract can usually be assigned to the new owner, so the tenant's assistance continues. Since 2019 it has also been illegal statewide to refuse or treat a tenant differently because of a lawful source of income such as a voucher.

Is Your Building Rent-Stabilised? The Emergency Tenant Protection Act

Some owners do not realise their building is regulated until a buyer's attorney asks. The Emergency Tenant Protection Act of 1974 originally let municipalities in a few suburban counties, Westchester and Rockland among them, declare a housing emergency when the local rental vacancy rate falls below 5%, and since 2019 any municipality in the state can do the same. Once it does, buildings with six or more units built before 1974 come under rent stabilisation. In Westchester, Yonkers, Mount Vernon, New Rochelle and White Plains are among the cities that opted in, along with a number of towns and villages. A few Rockland municipalities have adopted it or debated it more recently. Coverage depends on the local resolution and on the building's age and unit count, so confirm the status of your property with New York State Homes and Community Renewal (HCR) rather than assuming.

Coverage affects a sale in several ways:

• Each stabilised apartment's rent must be registered with HCR every year. A buyer will review that registration history, and gaps or errors are a liability.
• Allowed increases are set by the county's Rent Guidelines Board, not by the market.
• The 2019 law ended vacancy decontrol and the vacancy bonus and tightened increases for improvements. A regulated building's income is largely fixed, and buyers value it on that basis.
• Rent overcharge claims can now reach back six years, so an owner who has been unsure about the legal rent should raise it early.

We buy regulated buildings as well as unregulated ones, and the registration history is part of what we review. Our Yonkers page covers the city in more detail.

Good Cause Eviction: Check Your Municipality

New York passed its Good Cause Eviction law in April 2024. It applies automatically in New York City. Everywhere else it applies only where a city, town or village has opted in by local law. Where it applies, a covered landlord generally needs one of the reasons listed in the law, such as nonpayment or a lease violation, to refuse a renewal, and a rent increase above a set threshold can be challenged. Owners of ten or fewer units are generally exempt, as are several other categories of housing. Local opt-ins are still being adopted and debated across the state, so before you plan around a non-renewal, ask your attorney whether your municipality has passed one and whether your building falls within it.

Why Many Landlords Sell Before an Eviction Is Finished

Outside New York City, eviction cases are summary proceedings heard in the local court. Yonkers, White Plains, New Rochelle, Mount Vernon and Peekskill have their own city courts. Towns and villages use their justice courts. A nonpayment case usually runs like this:

1. The five-day late-rent notice by certified mail.
2. A written 14-day rent demand under RPAPL §711.
3. A petition and notice of petition, served on the tenant.
4. The first court date, often adjourned so the tenant can find a lawyer or apply for rental assistance.
5. A judgment and warrant of eviction if you win.
6. A 14-day notice to the tenant before the warrant can be carried out by a sheriff, marshal or constable.

A holdover case, used when a lease has ended or a month-to-month tenancy has been terminated, starts with the 30-, 60- or 90-day notice described above. No calendar for either type is reliable. Every stage can be adjourned, and a judge can stay a warrant for up to a year where the tenant shows hardship. When a tenant contests the case, months is the realistic expectation, and the lost rent and attorney's fees keep accumulating.

Selling occupied lets you skip that wait. We buy with a case pending. Whether it continues in our name or starts over after the closing is a question for the attorneys, but either way the time and cost become ours.

Cash for Keys, Done Properly

A cash-for-keys agreement is a voluntary deal. The tenant agrees to move out by a set date and hand over the keys, and in return receives a payment. Done well, it is often faster and cheaper than a contested case. The terms that protect both sides:

• Put it in writing, with the move-out date, the amount, the condition the unit should be left in, and a mutual release.
• Pay at move-out, after a walk-through and once the keys are returned, not in advance.
• Keep the security deposit separate. It is still governed by the 14-day return rule.
• If a case is already in court, the agreement can be written as a stipulation for the judge to approve.
• Never lean on the tenant. Pressure, threats or cutting services is harassment under the 2019 law.

When a buyer needs a vacant unit, negotiating this after the closing is part of our job, and you do not have to do it yourself.

What Comes Off a Rental Sale at Closing

• New York State transfer tax. $2 per $500 of the price, or 0.4%, reported on Form TP-584.
• City transfer taxes. Yonkers charges 1.5%, Mount Vernon 1.5% on deeds dated from February 1, 2026, and Peekskill 1%. Our guide to selling costs in Westchester works through each with an example.
• The mansion tax. A 1% tax on residential purchases of a million dollars or more, paid by the buyer. It covers one- to three-family houses, co-ops and condos, and does not apply to a building of four or more units.
• Payoffs and liens. The mortgage, any unpaid water or tax bills, and open violation fines are cleared from the proceeds.
• Out-of-state owners. A landlord who lives outside New York files Form IT-2663 and pays estimated income tax out of the closing. The principal-residence exemption on that form does not cover a rental.

When we buy, the transfer taxes and our closing costs are ours to pay.

Income Tax on a Rental Sale: Recapture, Gain and a 1031 Exchange

Depreciation recapture

A residential rental building is depreciated over 27.5 years. When you sell, the part of your gain that equals the depreciation you took, or were entitled to take, is taxed federally as unrecaptured section 1250 gain at a maximum rate of 25%. The rest of a long-term gain is taxed at the usual 0%, 15% or 20% rates, and the 3.8% net investment income tax can apply above certain income levels.

New York's share

New York has no separate capital gains rate. The gain is added to your income and taxed at the state's ordinary rates. If you live in Yonkers, the city's resident income tax surcharge is calculated on your state tax, so it rises with it.

A 1031 exchange

Section 1031 lets you defer both the gain and the recapture by reinvesting in other real property held for investment. A qualified intermediary has to be engaged before your closing and hold the proceeds. You have 45 days to identify replacement property in writing and 180 days to close on it. New York generally follows the federal treatment for residents. A sale to us can be the property you give up in an exchange, and we will set the closing date around your intermediary's schedule.

A former home that became a rental

If you lived in the house for two of the five years before the sale, part of the gain may still qualify for the home-sale exclusion. The exclusion is reduced for periods of rental use after 2008, and it never covers depreciation taken after May 1997.

How We Buy an Occupied Rental

1. Tell us about the property. The address, the number of units, the current rents and any problems you already know about.
2. Documents and one visit. We read the leases and rent roll and walk each unit once, at a time that suits the tenants.
3. A written offer. It reflects the leases, the rents, the condition and anything pending in court.
4. Attorneys on both sides. Yours reviews the contract. The deposits are credited and the title work is done.
5. You choose the closing date. That can be soon, or later to line up with a 1031 exchange or the end of a lease.

We are rated 4.9 from 75 Google reviews, and you can read more on our reviews page. We buy rentals throughout Westchester, in Rockland, and across Putnam County.