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If you are a New York City renter, you may be thinking of making a move because of the coronavirus pandemic. Maybe you want to break your lease and move out of the city, or maybe you want to sign a lease on a different rental, one that's better suited for the Covid-19 era. In either case, you need to consider what a lease obligates you to do.
That’s because when you sign a lease, you enter into a legal contract with the landlord who owns the place. What this means is that in return for living in the apartment, you agree to make monthly payments and take care of it, for starters.
Your lease may not be a scintillating document but you still need to read it closely because many landlords still largely rely on standard lease forms, which are often designed to protect the landlord, more than the tenant.
The advice is—don’t rush through the lease signing process. You’ll want to make sure the details are accurate as well as identify the policy on renewals and roommates. Also, make sure you understand your liability for insurance and whether you are paying for any utilities.
[Editor’s Note: An earlier version of this post was published in August 2019. We are presenting it again here with updated information for June 2020.]
“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, chief operating officer at The Corcoran Group.
Malin says there isn’t 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 either you can live with those terms or you can’t,” he says.
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Mark Hakim, a real estate attorney with the law firm Schwartz Sladkus Reich Greenberg Atlas, says your leverage when it comes to a lease can depend on the market.
“In a tight market that 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.
Currently in Manhattan new listings are increasing faster than leases are being signed, giving renters the edge. Regardless of how much leverage you have, you should at least know what you’re signing before you put your signature on the dotted line. Often your lease will come with additional pages called supplemental riders. These may include requirements that allow landlords to inspect for lead paint or install window guards in units where there are children 10 and under.
Even though the city is opening back up as coronavirus cases are brought under control, NYC is going to be living with the virus for months to come. Hakim says what’s important is that landlords and tenants “work together to be reasonable.” For example, it’s possible buildings may ban moves and renovations again in the future if there’s a second wave of infections and this might require flexibility. He suggests considering “a provision that requires the building to permit moves,” says Hakim.
Here are 14 other issues to keep an eye on when reviewing your lease.
1. The essentials
Make sure the rent you agreed to is actually stipulated in the lease, with the start date and end date correctly stated. Double check the address and apartment number. Check the date each month the rent is due. Make sure the security deposit amount is correct and keep in mind, landlords can only ask for one month’s rent as a security.
“People are sometimes in a hurry, and mistakes get made,” Malin says. You should also review the lease for any break clause. Landlords are required to make a reasonable effort to re-rent your apartment if you need to leave mid-way through your lease but there’s a risk that you’ll be on the hook for the rest of the term if another tenant doesn’t take your place.
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 or third year so you know it will be a reasonable rate, and you are less exposed to a bigger hike, he advises.
Hakim points out, “landlords must give advance notice to tenants for rent increases above 5 percent or if they do not intend to renew a tenant’s lease.”
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 says. The same applies for termination, or opt-out provisions
Gross Rent Calculator
Some New York City landlords offer a free month (or more) at the beginning or end of a lease. The advertised rent is the net effective rent. The net effective rent is less than the amount you will actually have to pay --- known as your gross rent --- during your non-free months.
Brick Underground's Gross Rent Calculator enables you to easily calculate your gross rent, make quick apples-to-apples comparisons between apartments and avoid expensive surprises. All you'll need to figure out your gross rent is 1) the net effective rent, 2) the length of your lease, and 3) how many free months your landlord is offering. [Hint: Bookmark this page for easy reference!]
To learn more about net effective versus gross rents, read What does 'net effective rent' mean?.
If the landlord is offering partial months free, enter it with a decimal point. For example, 6 weeks free rent should be entered as 1.5 months.
3. Security deposits
Make sure the security deposit amount is detailed correctly on the lease. The security deposit is now capped at one month’s rent so you cannot be asked to pay additional rent in advance.
If you request an inspection of the apartment to document its condition before you move in, you must be given a walkthrough to observe the condition of the unit and any existing damage. When you move out you can do the same and the landlord needs to give you an itemized statement of any charges within 14 days, or he or she could be liable for damages up to twice the amount of the deposit. The deposit must also be returned to you, minus any itemized cost for damage, within 14 days of vacating the apartment.
Some landlords—especially in buildings where apartments aren't separately metered or sub-metered—may 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.
“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 what is required.”
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Not everyone loves animals, and having a dog or a cat can be a potential obstacle—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.
Even if pets are allowed, be sure to find out whether there is a weight 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 as it becomes full grown.
“Most owners will ask the breed, not just the weight, because 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, or because the building is landmarked.
In addition, adds real estate attorney Steve Wagner of Wagner Berkow & Brandt, “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 the units.
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 Wolfe.
It’s important to have this spelled out in the lease, because if it is 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, a landlord cannot 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 unreasonably denied, you are allowed to cancel the lease. If there is a possibility you will need to 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,” 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 says.
You are still financially liable for the entire rent. “If your subtenant doesn’t pay, you still need to pay,” Malin says.
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?”
Although it is uncommon, damages can occur while the apartment is being shown, and you want the landlord responsible for that. “You want to make sure you have ample protection,” Hakim says.
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. There are providers who offer furnished apartments for a business, and there’s a different standard lease.
“Most are month to month, and include cleaning services and utilities,” Hakim says. Still, review the same clauses as you would for an unfurnished rental.
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