When does a rent control unit come out of rent control? (lease, buying)

[jstom]

And how?? Is there a process the landlord must go through to change a rent control unit to a normal unit after the previous tenant leaves? I ask, because I'm looking into buying a building that has two vacant units. Everything in the building is under rent control.

[Prince of Lombards]

I believe it's only when there's a tenant change, or the law changes.

[motoman]

Under current law the unit does not come out from under rent control, but when tenants change, the landlord can raise the rent to a market rate. But then once a new tenant comes in it is under rent control again, but with the start point the new market rate they signed the lease for.

The change being considered is that a unit would come out from rent control once a tenant leaves, but current tenants would grandfathered in until they leave.

Once the unit comes out from under rent control, then the price can move with market.

[jstom]

So if I understand correctly, a building under rent control is never out of rent control?

When a tenant leaves, the owner can raise the rent to any rate he/she wants, when the unit becomes rented at that price then it is stuck at that price with rent control laws applying?

Interesting... how does this look from an investor's standpoint? Would you want to buy a rent controlled building with two vacant units or another rent controlled building with no vacant units (then move in yourself into one of the units)?

Originally Posted by motoman

Under current law the unit does not come out from under rent control, but when tenants change, the landlord can raise the rent to a market rate. But then once a new tenant comes in it is under rent control again, but with the start point the new market rate they signed the lease for.

The change being considered is that a unit would come out from rent control once a tenant leaves, but current tenants would grandfathered in until they leave.

Once the unit comes out from under rent control, then the price can move with market.