I'm signing a lease to sublet in a co-op for $1,500/month, and would be charged $1,500 for security, one month's rent, and a broker fee. But they're also asking for another $1,500 as a "management" fee. So essentially, I'd be paying four months rent up front, which is a huge amount of money. Is it at all standard for a building to request this?
While it's standard for landlords to require first month's rent, last month's rent, and a security deposit, you're right to think that an extra month's fee is excessive and out of the ordinary, say our expert.
"No, it's not standard," says Sotheby's International Real Estate broker Gordon Roberts. "I'd ask what it's for, and why you weren't informed of it earlier."
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Usually when you're renting in a co-op, says Roberts, the cost of property management is baked into the monthly maintenance fee, which should already be covered by your rent.
And while there's likely a lot of competition for a $1,500/month apartment—a rare entity, even in today's cooler rental market—it's a good idea to tap the breaks and review what, exactly, you'll be signing on to. "The pressure is often on for you to make snap decisions, and pony up, last-minute, additional charges," he says. "Despite the fact that this is a rare, super-low-end rental, it still represents an $18,000 'purchase commitment'."
The fact that this apartment is in a co-op—and therefore probably subject to board approval—works in your favor here, since it can decelerate the rental process that might otherwise be moving at a breakneck pace. "I would advise renters in Manhattan to slow down and demand, up front and in writing, what your fees are going to be, as well as the mandatory NYS Agency Disclosure form," says Roberts.
And before paying anything beyond the application and/or credit check fee, he recommends reviewing the lease with an attorney or your own real estate agent to make sure you're getting a fair deal. While it can be easy to give in to pressure and agree to anything a landlord asks, with this much money at stake, it's best to take a deep breath, step back, and make sure you have confirmation—in writing—of exactly how much you will be paying, what the money is going toward, and what will be given back to you at the end of your lease.
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