As if finding an affordable New York City rental isn’t enough of a headache, deciphering the lease can you give a migraine.
“Many landlords still rely largely upon a standard lease form, which is often designed to protect the landlord more than the tenant,” explains Mike Akerly, a real estate broker at Halstead as well as an attorney, small landlord and BrickUnderground's very own Rent Coach. He also notes that “many landlords and management companies view these leases as take-it-or-leave-it offers to rent.”
So, while some, most or all of what you're about to sign may or may not be negotiable, you should at least know what you’re signing up for before you sign on the dotted line.
Here are 11 issues to keep an eye on:
1. Renewal clauses and renewal policies
If your lease has an option to renew for one or more years, "check to see if there is an escalation clause, which would raise the rent in subsequent years and is typically based on a fixed dollar amount, a percentage of the first year’s rent, or cost of living increases," says Akerly.
While none of the methods of calculating an escalation are necessarily better than any of the others, says Akerly, "the important thing is to understand what the escalation is going to be in dollar terms."
With regard to options to renew, he says, "it would not be an enforceable provision if it didn’t state what the rent term would be during the renewal term. That’s a material term that is necessary to create a valid option to renew."
Renewal policies vary and are typically more lenient in smaller buildings. Tenants should be sensitive to the date by which leases have to be renewed, cautions Manhattan real estate attorney and blogger Ron Gitter.
“If you miss the assigned deadline for the renewal date--usually 30, 60, or 90 days prior to expiration of the current term--the right to renew can be lost," he says. "This is especially true nowadays because the inventory of available apartments is so tight.”
2. Utilities
Some landlords--especially in buildings where apartments aren't separately metered or submetered--may include utilities in the monthly rental price. But usually only the water and heat are included.
3. Insurance
“The landlord's insurance does not, despite what many people believe, cover the tenant,” says apartment insurance broker Jeff Schneider of Gotham Brokerage. “The tenant must insure his or her own property against fire, theft and water damage, as well as personal liability damages, which can result from individual negligence if you accidentally start a fire that destroys part of the building and injures someone, or more commonly, if your bathtub or sink overflows and causes damages to the apartment below you.”
4. Pets
Not everyone loves animals, and having a dog or a cat can be potential trouble spot – especially if you plan on getting one after you move in.
“That’s why if you intend to do this, make sure that the lease explicitly acknowledges this ahead of time so that the landlord won’t withhold his or her consent to do so,” says Akerly.
“Furthermore,” he adds, “if you’re renting in a co-op or condo that is represented as pet-friendly, review the corporate bylaws to ensure that tenants of owners or shareholders are permitted to have them, which sometimes they aren’t.” (There may also be a double standard for amenities like gyms and roof decks. Be sure to check.)
Michael Wolfe, a property manager and president of Midboro Management, agrees, adding that “even if pets are allowed, be sure to find out whether there is a weight and/or breed restriction to avoid any problems.”
5. Air conditioners
Some landlords may restrict the number of units you can have--or prohibit them altogether--due to outdated wiring in the building.
In addition, adds real estate attorney Steve Wagner of Porzio, Bromberg & Newman, “Air conditioners can create a sticky situation because standard leases typically don’t allow you to hang anything out of windows, particularly on higher floors. Always ask first before taking matters into your own hands.”
Even where a/c's are allowed, you may need to hire someone else to install them.
"Some landlords won’t allow their tenants to install their own units because they’re afraid of safety or liability issues and you could face penalties of up to $100 or more if you put them in yourself," Rapid Realty’s CEO Anthony Lolli.
6. Outdoor spaces
Be sure that your right to use the outdoor space is specifically mentioned in the lease. Otherwise you won't be entitled to a rent abatement if the space becomes unusuable for some reason.
If you’re subletting from an owner whose apartment has a terrace, “be sure you're clear up front about who is responsible for maintaining it while you’re living there,” says Midboro’s Wolfe.
7. Subletting, roommates and visitors
Most standard rental leases require landlord approval to sublet, so you will likely need the landlord’s consent to sublet, says Wagner. However, he notes, New York law (RPL 226-b) mandates that the landlord not unreasonably withhold consent.
That said, he explains, "if you are going to leave the apartment permanently and want someone to take over your lease, this is called an assignment. The landlord can refuse an assignment, but if your request to assign is denied, you are allowed to cancel the lease. if there is a possibility you will need leave before your lease is up, you should discuss this with the landlord ahead of time to determine whether or he or she will want you to go through the formalities or whether you can just terminate. You may also be able to work this out with a landlord before the lease is signed."
As far as roommates and significant others, “you are allowed to have at least one additional occupant living with you while you’re there even if the lease is just in your name as long as you notify the landlord first,” Wagner says.
8. Renovations
If the landlord has agreed in advance to let you make improvements or alterations to the apartment, make sure you get this in writing in the lease. Otherwise, you will be responsible for the cost of returning the apartment to its original condition.
9. Furnished apartments
“If the apartment is furnished, the lease should also contain a list of all furniture that is to be included, as well as a confirmation that all of these items are in place when the lease begins,” says Gitter.
10. Security deposits
Getting your security deposit back can be a challenge; getting it quickly can be even harder.
“In New York, the law only requires that the landlord return your security deposit within a reasonable period of time, so just as an extra precaution you may want to add a provision to the lease that stipulates exactly how many days your landlord has to give it back to you once your apartment has passed its final inspection,” says Akerly.
11. Showing the apartment when the lease is up
“It’s not uncommon for landlords to include a provision to show your apartment to prospective tenants near the end of the lease,” Akerly says. “However, the exact terms of the arrangement should be looked at closely, as should such factors as how many days before the end of the lease is acceptable, are there any restrictions on the time or days of the week, who will be permitted access and whether or not you will be required to make the apartment available for open houses.”
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