Young, urban professionals Alex Rose (Ben Stiller) and Nancy Kendricks (Drew Barrymore) are on a quest to find their dream home in New York City. They stumble upon a seemingly perfect Brooklyn brownstone duplex, but it comes with one major drawback: the rent-controlled top-floor tenant, Mrs. Connelly (Eileen Essell), an elderly Irish woman with a surprising zest for life. Assuming she won't be around for long, they purchase the property without a second thought.
While Nancy juggles her demanding job in advertising under the guidance of her boss Herman (Wallace Shawn), Alex stays home to work on his novel. However, they quickly discover that Mrs. Connelly is far from the quiet, old lady they anticipated. She loves to crank up her television at all hours and is heavily involved in a brass band, which creates constant disturbances. As a novelist facing a looming deadline, Alex finds himself constantly interrupted by Mrs. Connelly's hourly requests—everything from taking out the garbage to plumbing issues, which lead to costly repairs. Despite Alex’s pleas for peace, she drags him to run errands, leaving him utterly frustrated.
The situation worsens when Nancy makes a costly mistake at work due to the chaos at home and subsequently loses her job. To cope with the pressure of the upcoming deadline, Alex resorts to working at Starbucks, while Nancy searches for new employment. Their attempts to manage the situation lead to a series of mishaps, including filing a noise complaint against Mrs. Connelly, only to find that she has preemptively accused them of harassment after they attempted to help her during a choking incident.
As their friendships deteriorate, influenced by Mrs. Connelly’s innocent façade, the couple finds themselves entrapped in a nightmare scenario. The real estate agent informs them that they overpaid for the duplex and suggests that their only option is to drastically reduce the price. Meanwhile, a water leak from the ceiling exacerbates their woes, culminating in a hilarious disaster when Mrs. Connelly crashes through their ceiling.
Desperation drives Alex to extreme lengths, including purchasing a gun with the intention of eliminating the problem that is Mrs. Connelly. However, plans go awry when Nancy accidentally shoots him instead. In a series of comical but sinister attempts to rid themselves of their neighbor, they even hire a hit-man, Chick (James Remar), offering a hefty sum in the hopes of resolving their living situation.
Yet, when Chick attempts his ill-fated mission, he meets an unexpected adversary in Mrs. Connelly, who surprisingly defends herself with a spear gun, igniting chaos in their home. In the middle of the mayhem, despite their plot to leave her in the perilous situation, Alex and Nancy ultimately choose to save her and her parrot, showcasing a surprising change of heart.
In the aftermath, as they contemplate their strange and chaotic experience, they learn that Mrs. Connelly was not the victim she appeared to be. Alongside her son, the real estate agent Kenneth (Harvey Fierstein), and the sarcastic officer Dan (Robert Wisdom), Mrs. Connelly had orchestrated an elaborate scheme to fool naive couples into buying the duplex so they could profit off of their misfortunes.
In the end, Alex and Nancy decide to move away, still unaware of the full extent of their deception. As they reflect on their ordeal and its impact on their lives, Alex draws inspiration from their experiences, using them as the basis for his next book, Duplex, which ironically becomes a bestseller and rescues them from their financial struggles. Their journey concludes with a bittersweet note as they relocate to The Bronx, leaving Mrs. Connelly and her dubious schemes behind, never to return to Brooklyn again.
