The city that never sleeps offers 3 types of buildings that you can rent in.
I) Rental buildings such as Walk-ups, Brownstones, High Rises, or Luxury Elevator with Doorman are generally owned by 1 individual or a company defined as the Landlord; which offers all units for rent inclusive of commercial retail space and potential parking garage if available.
Open Market or Non Rent Stabilized properties have rents that are based on the laws of supply and demand and the terms of the lease can be negotiated but often established by the landlord’s provisions and requirements. Thus, it is crucial to have your KSI Realty Rental Specialist help you restore the much necessary arm length relationship with the Landlord while educating you on the different options available. We recommend starting your search process no more than 1 month before your ability to sign a lease and put down a deposit as these Open Market listings rent fast. New-York City is currently considered a Landlord city where demand exceeds supply.
Different types of mechanism have been implemented to help alleviate that shortage of properties and to regulate the rental price of these apartments with Rent Controlled and Rent Stabilized laws.
According to the New York City Guideline Board’s website: “New York City has a system of rent regulations known as "rent stabilization." The system was enacted in 1969 when rents were rising sharply in many post-war buildings. The system has been extended and amended frequently, and now about one million apartments in the City are covered by rent stabilization. Rent stabilized tenants are protected from sharp increases in rent and have the right to renew their leases.” [...]
The NYC Rent Guidelines Board sets the allowable percentage increase for renewal leases each year. Current and past guidelines can be accessed here.
Tenants in Rent Controlled or Rent Stabilized buildings have the right to renew the lease indefinitely and the right to sublease the apartment WITH the landlord’s permission, subject to obeying all the terms of the lease. They are thus much more difficult to score and waiting list can often be backlogged for long periods of time.
The usual requirements are income equal to 40-55 times the monthly rent of the property, good credit score (the verification fee may be charged to you by the Broker or the Landlord at your expense), the first month’s rent paid on the day of the lease signature, up to two month’s rent for the refundable security deposit (usually refunded within 30-60 days allowing for all utility bills to settle and to verify that no damages has been disputed between the parties). It is thus essential to have a thorough walk-through checklist to compare the before and after condition of the unit. KSI Realty highly recommends to the tenant to subscribe to a tenant insurance policy to cover them for personal loss against fire and theft of personal effects. A signed copy of the inventory walk-through checklist should be remitted to you and kept with your lease agreement and insurance policy in a confidential and secured location. We highly recommend scanning them and upload them on a cloud base solution.
II) Cooperatives (co-ops) are buildings, which are owned by a corporation where each tenants are shareholders of the building. Each shareholder is entitled to a certain number of shares in the corporation allocated to his or her apartment, but does not own the apartment itself. The number of shares depends on several factors such as the size of the unit, the floor level, and features such as balcony or private elevators on which the apartment is located. The shareholder is given a proprietary lease as a legal right to that apartment. Thus, if you decide to rent into a co-op building, you are subletting from that shareholder, who in turn becomes your landlord.
Identical to Open Market listings the rental prices are governed by the law of supply and demand. Given that Co-op shareholders and their tenants are subject to rules and regulations set forth in the By-Laws of the corporation; it is often considered more difficult to become a tenant as the Board of Directors can impose a series of interviews where very specific financial, professional and personal questions can be asked in the board package. The Co-op Board of Directors has in essence the right of “life and death” on almost anything and everything that concerns the Co-op and must grant permission to the Landlord before they can approve you.
One of the reason behind that stringent selection process could be as described by Investipodia.com : (http://www.investopedia.com/articles/mortgages-real- estate/09/facing-co-op-bankruptcy.asp)
“all Shareholders could become Mortgage defaults are much more serious, because the lender is not receiving payments for the building, as per the original agreement. This is a frustrating situation for shareholders who have diligently paid the monthly maintenance without missing payments. This is often the fastest route towards filing bankruptcy for co-op”
It has also been generally accepted that Co-opt Shareholders are seeking unity, peace and quality of their neighbors.
Be confident that our KSI Realty Rental Specialist will be able to prepare you for a stress-free and smooth interview. Once you have been approved, after the interview and the selection process, a Co-op Sublease Agreement is drafted. Some of our clients elect to have their attorney review it, which is always a sound idea especially when you are signing a written agreement. The lease term is usually for one year with the option to renew based upon the Board’s approval. Generally speaking, most Co-ops have a maximum of two-year sublease period but rules and regulations may vary the length of the lease from one building to another.
As you would have understood by now, the approval process can be lengthy and strenuous so KSI Realty recommends that you should begin your search at least 2 months before you are in a ready, willing and able position to sign the sub-lease agreement. On the other end, one of the many advantages of Co-ops are the fees associated with sublease that can range from $100 to as much as $2,000 in addition to the standard first month’s rent and first month security deposit. In some rare instances, the Board can request prospective tenant to pay for the application-processing fee, a credit check, and a move- in and move-out fees (which are usually refundable). Be aware that more upscale buildings may have moving-in fee, elevator insurance certificate process and other rules that you have to strictly abide to before you can settle in.
III) Condominiums are buildings where individual ownership of a unit in a multi-unit structure occurs such as an apartment building or on land owned in common such as a townhouse
complex or subdivisions (more common to Florida, or suburban areas). A Homeowner (HOA) or Condo Owner Association (COA) that can apply strict rules and by-laws voted by the Condo Board often governs Condos. Bear in mind that these buildings are usually high-rise full service buildings; or luxury doorman building with elevators, which have been built after the 1970’s and are a rather new phenomenon to New York City building landscape. Some condominiums are the result of conversion of old light-industrial loft buildings or C grade and below offices space in areas such as downtown or midtown that have been revamped to become residential housing.
A board meeting is often required as with Co-ops and the process tends to be a little bit faster and easier than Co-ops. We thus recommend that you start your search around 1 and 1⁄2 month before you are ready, willing and able to sign the lease and put down a security deposit. The length of time for approval varies from building to building, but it is usually shorter than the co-op approval process around 2 weeks. As with Rental Buildings and Co-ops the first month’s rent, one month rent for a security deposit, and the non-refundable application fees that can range from $50 to $250 are due at signing. Move-in and move-out fees are also necessary, and they can vary – so be sure to ask your KSI Realty Rental Specialist to find out the bottom line expenses for you.
It is important to keep in mind that each one of these buildings types offer their pros and cons based on your personal lifestyle, individual needs and precise budget. Each have their own set of rules and regulations that are strictly enforced as a mean to keep harmony, and balance for all residents both owners and tenants. It is important to grasp the difference between each building types, as it will impact your property search and determine the place you can soon call “home”.
A KSI Realty Rental Property Specialist can walk you through the different options that match your requirements. It is our pleasure to assist you and treat you as a valued guest. Unlike many other firms that have empty claims, we truly know the meaning of customer service and offer a true boutique experience. Simply give us a call or email us to receive your individualized rental search list.
To sum it up:
As you just found out, not all buildings are born equals in terms of rules, amenities, looks and specifications, etc. thus using the service of a Licensed Real Estate Broker can make a difference; moreover, having a KSI Realty Rental Specialist by your side will enable you to navigate the vast offers that exist in New York City and remove a lot of the frustration and stress that can come with finding the right rental option for you. We are committed to you so we expect you to be committed to us.
New York City attracts a lot of different tenant profiles from domestic nationals to overseas foreigner that are used to different standards and practices. That is the reason why we put together this rental guide just for you. Use it as our gift to you. Knowledge is not private property so please share it with your friends and family along our business card.