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Renters beware: 14 things to look out for in that lease

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After looking at too many unacceptable (and unaffordable) apartments, you have finally found one you can live with (and in). Now it is time for the lease signing.

Do not rush through this process. Read the document closely as many landlords still rely largely upon a standard lease form, which is often designed to protect the landlord more than the tenant.

[Editors Note: An earlier version of this post was published in 2013 and has been updated with new information in July 2018.]

“My advice to clients is first and foremost, it is a legal document, obligating them to all the terms and conditions in there. It’s essential to read that document and have someone with more experience—not necessarily a lawyer, but it could be parents—look at it as well,” says Gary Malin, president of Citi Habitats, one of the largest rental brokerages in New York, and a licensed attorney.

Malin says that there is not a lot of negotiating room when it comes to leases. “Some landlords have done hundreds, thousands of leases, and their lease is their lease, so you either can live with those terms or you can’t.”

Mark Hakim, an attorney in the real estate practice of Schwartz Sladkus Reich Greenberg Atlas, says it depends on the market. “In a market which favors the landlord, the renter will be stuck with what the landlord has to offer. In a softening market with high vacancies, renters will control negotiations ever so slightly,” he says.

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 14 issues to keep an eye on:

1. The essentials

Make sure the rent you agreed to is actually stipulated in the lease, with the date commencing and ending stated properly. Double check the address and apartment number. Check the date each month the rent is due. Make sure the correct security deposit is stated. “People are sometimes in a hurry, and mistakes get made,” Malin says.

2. 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. 

“You spent time, money, and energy getting this apartment, and that first year goes by very quickly,” Hakim says. If you already know you want to spend more than a year there, try to negotiate now and set the rent increase for the second and/or third year so you know it will be a reasonable rate, and you are less exposed to a bigger hike, he advices.

Also, review the renewal terms carefully. If it states you need to give a renewal 90 days in advance by certified mail, simply calling the landlord’s office and telling them you want to renew won’t cut it.

“Instead of the agreed upon 3 percent increase, he may now come back with an 8 percent increase, saying you didn’t give proper certified mail notice,” Hakim explains.

The same applies for termination, or opt-out provisions.

3. Security deposits

Getting your security deposit back can be a challenge; getting it quickly can be even harder. New York law requires only that a landlord return your security deposit within a reasonable period of time.

In addition to making sure the security deposit amount is detailed correctly on the lease, put in a provision that you’ll get it back in a certain number of days once the apartment has passed its final inspection, Hakim says, adding, “Maybe the day before you hand over the keys, invite your landlord to walk through the apartment together and document the inspection in writing. That removes any doubt about who is responsible for what damages, if any, and what the deductions might be.”

4. Utilities

Some landlords—especially in buildings where apartments aren't separately metered or submeteredmay include utilities in the monthly rental price. But usually only the water and heat are included.

“Ask what is included, and make sure the lease clearly states who is responsible for what,” Malin says.

5. Insurance

“The landlord's insurance does not, despite what many people believe, cover the tenant,” says apartment insurance broker Jeff Schneider of Gotham Brokerage (a Brick Underground sponsor). “The tenant must insure their own property against fire, theft, and water damage, and also must carry their own personal liability coverage, which protects them if they are sued for negligence—starting a fire that destroys part of the building or, more commonly, letting a tub or sink overflow and damaging the apartment below them.”

It’s especially important to have insurance if you are renting from a condo or co-op owner, Hakim says. The buildings will often have rules about insurance coverage, and while the building policy or landlord’s policy might cover some things, they likely won’t cover everything, like your possessions. “It is the cheapest piece of protection in your life that can cover the most seemingly benign situations,” Hakim says, like accidentally leaving the sink on, or flushing the toilet and it overflows. “Ask the building management for what is required.”  

Pro Tip:

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6. 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. If this is the case, make sure the lease explicitly acknowledges this so the landlord won’t withhold his or her consent when you decide to bring home your new best friend.

Once you have the animal, “ensure you comply with pet rules and policies, and that the pet is disclosed,” Malin says. 

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.”

And don’t think you’ll be able to get away with bringing in a puppy under the weight limit, then have it exceed the said amount once an adult. “Most owners will ask the breed, not just the weight, as they know that puppies grow,” Malin adds. “The best way to avoid friction is to be upfront.”

In condo and co-op rentals, review the corporate bylaws to ensure what the rules are regarding pets. For more information, read Brick’s best advice on having pets in New York City.

7. Air conditioners

Some landlords may restrict the number of units you can have—or prohibit them altogether—due to outdated wiring in the building, or safety issues.

In addition, adds real estate attorney Steve Wagner of Wagner Berkow, “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.”

In older buildings or co-ops, there may be a fee charged, Hakim says. 

Even where ACs are allowed, you may need to hire someone else to install them. Read more in "It's AC season: Here's what you need to know now."

8. Outdoor spaces

“If you’re lucky enough to have the use of outdoor space, whether a terrace, garden, or rooftop, make sure it’s in your lease,” Hakim says, adding that the clause should include where the space is, who has rights to it, is it shared, who is responsible for maintenance, and who is responsible for damages.

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.

Another benefit to having this detailed in the lease: if not, you might not be entitled to a rent abatement if the space becomes unusable for some reason.

9. 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 to need leave before your lease is up, you should discuss this with the landlord ahead of time to determine whether 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. 

Know that if you make any deals with a roommate, such as their agreeing to pay more for a larger bedroom space or to use their security deposit for the last month’s rent, it’s up to you to get that in writing separately from the lease with your landlord, Hakim cautions.

Adds Malin, and you are still financially liable for that rent. “If your subtenant doesn’t pay, you still need to pay.” You can read more in "6 questions to ask before you sublet your NYC rental."

10. 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. This goes even for something as benign as a paint job, for both parties.

"If the landlord promises to have the apartment painted by the move-in date, but it’s not done, you might be able to get a rental credit,” Hakim says. “But you have to paper it and track it, as that paper is your only proof.”

11. Noise mitigation

Some buildings might require tenants to take precautions regarding noise, such as having a certain amount of the floor covered by carpets. Look to see if there are any obligations, Malin says.

12. 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. It's the landlord's business to keep the space rented after all. However, the exact terms of the arrangement should be looked at closely.

“Try to limit it to certain days and hours, and make yourself available. If they’re showing it without you, you might want a third party there, like maybe a broker,” Hakim says. “What if you have a dog and it takes a nip or is accused of taking a nip?”

And though uncommon, damages can occur while the apartment is being shown, and you want the landlord responsible for that, he adds. You want to make sure you have ample protection.

13. Subletting, maintenance, and assessment fees

This is for people renting from a condo or co-op owner: In addition to monthly maintenance fees, many co-ops charge the owner a subletting fee. That usually will get added to the rent the shareholder is asking. But if either fee gets increased in the middle of a sublease, or if the building adds a monthly assessment, you want to make sure you won’t be liable for the extra charges, Hakim says, so make sure that is clearly stated in the lease.

14. 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. But there are providers who offer furnished apartments for a business, and there’s a different standard lease than for unfurnished apartments, Malin says. “Most are month to month, and include cleaning services and utilities,” he says. Still, review the same clauses as previously listed.

 

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