Step 9: Rental Process
A lease is a legally binding, written agreement between a lessor (property owner) and a lessee (one who holds property under a lease) that gives the tenant the legal right to reside for a specifically stated length of time (beginning and ending dates)
Commonly Used Terms
Assignment
A lease assignment conveys to another person all the tenant’s rights to occupy the apartment. A tenant may not assign his/her lease without the written consent of the owner, which may be unconditionally withheld without cause. However, an owner who unreasonably refuses to grant permission to assign the lease, must release the tenant from the lease upon request of the tenant upon 30 days notice. If the owner reasonably withholds consent, the lease may not be assigned and the tenant will not be released from the lease.
Broker (BKR)
A state licensed sales agent who acts for property owners and prospective purchasers in Real Estate transactions. Acts as a guide in searching for apartments or homes for prospective renters/buyers.
Co-Broke
When brokers are working on a ‘co-broke’ basis, they are sharing exclusive listings with each other. In a co-broke transaction, one broker will represent the buyer or renter, while the other will represent the owner of the property. The commission is usually split 50/50.
Fixture Fee/Fix Fee
A fee that the tenant pays for the appliances provided in a dwelling.
Guarantor (GUAR)
A guarantor is a person who assumes financial responsibility of a lease for a tenant or tenants who otherwise would not meet the landlord’s financial qualifications. For example, someone attending law school that might not have an income would use a guarantor (often a family member) to satisfy the landlord that rent payment will not be a problem. The guarantor is a ‘backstop’ for the tenants in the event of non-payment. In Manhattan, guarantors generally need to make 80 times the monthly rent in annual income to qualify.
Landlord (LL)
The person who owns the apartment, house, or building; and to whom the rent is paid.
Lease
A lease is a legally binding, written agreement between a lessor (property owner) and a lessee (one who holds property under a lease) that gives the tenant the legal right to reside for a specifically stated length of time (beginning and ending dates) in the property for a set rental rate. Leases in non-regulated apartments may be oral or written, however it is recommended that you only enter into a written agreement. For more detailed definitions of and for other terms, see below, as well as the Glossary section of this website.
Market Rate or Non-Stabilized Building
With a market rate apartment, a landlord, at his own discretion, determines how much monthly rent he will charge on any given apartment. Renewals are not guaranteed unless stated in the lease. Introduced in 1993, “luxury destabilization” is the newest form of a Non-Stabilized Lease. It provides for lease-end destabilization of apartments, which rent for over $2,000.00 per month.
Month-to-Month Tenancy (Tenant-at-Will)
A month-to-month is also a legally binding agreement between a landlord and tenant. A month-to-month agreement should be, but does not have to be, a written agreement. Under this agreement the landlord or the tenant may terminate the agreement for any reason as long as written notification is given 30 days or one rental period in advance, whichever is longer. Notice of a raise in rent requires the same advance notice.
Notarize
To verify the authenticity of a signature by a certified Notary Public. This is often done to certify the authenticity of a lease.
Rental Insurance
You may wish to invest in an insurance policy that covers a renter’s personal property in case of damage or loss due to fire, flood, or theft. These policies are relatively inexpensive and generally include protection from personal liability if a visitor is injured while in your residence.
Rent Stabilization
Rent regulation limits the amount an owner/landlord may charge a tenant for rent and sets guidelines and restrictions on eviction and rent increases. Rent stabilization is a form of rent regulation. Rent control is another form of this governmental rent regulated process. Under rent regulation, owners are obligated to provide certain essential services.
Roommate/Share
A Roommate/Share is an arrangement whereby one rents an apartment with one or more individuals who already live in the apartment. This kind of arrangement may be organized in a variety of different ways where one or more roommates may or may not be on the lease as a tenant or even an occupant. Roommate issues, more common than may be expected, can escalate to costly and annoying legal battles. It is recommended that you take care to thoroughly screen your potential roommate. Make sure to consider the legal implications of having a roommate as well. For more information see the Roommates Tips section of this website.
Security Deposit
A deposit, usually one month’s rent, that a rental tenant will give to the landlord at lease signing as security against damage to the apartment during the course of their tenancy. At the end of the lease term, the landlord will take the cost of any damages caused by the tenant out of the security deposit before returning it. Most of the time the deposit will be held in an interest bearing escrow account.
Sublease
An agreement whereby a tenant grants possession and use of all or part of the leased property to another party, who is known as the (sub)‘lessee’, ‘subtenant‘ or ‘undertenant’. Subletting may be prohibited by the original lease or require written permission from the landlord. In a sublease, the original tenant, who is now regarded as the ‘sublessor’ or ‘over-tenant’, remains directly responsible for making the rent payments to the landlord. In co-ops, there may be rules that prohibit, limit, or otherwise control subletting.
Tenant Obligations
If you sign a lease, you are obligated to pay rent for each month for the full term of the lease. For example, if you sign a 12-month lease that starts in September, you are responsible to pay for all 12 months – even if your plans change and you want to move out in May, after the school year ends. The landlord may allow you to cancel your lease, but there will very likely be a penalty.
Warrant of Habitability
Under the warranty of habitability, tenants have the right to a livable, safe and sanitary apartment. This is a right that is implied in every written or oral residential lease. Any lease provision that waives this right is contrary to public policy and is therefore void. Examples of a breach of this warranty include the failure to provide heat or hot water on a regular basis, or the failure to rid an apartment of an insect infestation. Public areas of the building are also covered by the warranty of habitability. The warranty of habitability also applies to cooperative apartments, but not to condominiums. Any uninhabitable condition caused by the tenant or persons under the tenant’s direction or control does not constitute a breach of the warranty of habitability. In such a case, it is the responsibility of the tenant to remedy the condition.
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