MCNY RENTAL GUIDE
What Documentation Do I Need?
- Along with a completed & signed application, please include the following:
- Employment verification letter (on letterhead and signed) stating: a. Position b. Length of employment c. Annual salary (plus any bonus or commission)
- **If self-employed, instead of #1 above, please provide letter from CPA (on letterhead and signed) stating: a. Nature of business, length of time in business, position, and last years’ income and this years projected income.
- Two most recent pay stubs (If not self-employed)
- Recent bank statement (checking and savings/investment)
- Copy of photo I.D. (plus any Visas if applicable)
- W-2 and 1st two pages of last tax return (signed)
- If currently renting: Letter from landlord stating address and rent amount and that applicant was in good standing (paid rent on time, was good tenant…)
*** Along with a good credit rating, a prospective renter must earn a minimum of 40x the monthly rent as an annual income. Example: Rent is $2,500 per month the annual income of the renter should be $100,000.
**** If income or credit are lacking, guarantors are usually allowed, with a minimum of 80x the monthly rent as an annual income. ***** If using a guarantor, they must fill out an application AND supply items 1- 5 above.
Impress The Landlord
If you find a great apartment, fend off likely competitors by being prepared.
- Check your own credit history and bring along a current credit agency report.
- If possible, ask your previous landlord to write a favorable letter of reference
- Also ask your employer, co-workers, and friends if you can use them as character references (bring a list with names and telephone numbers)
—Fees and Deposits. Find out exactly how much you are expected to pay up-front to rent the apartment. Note: security deposits may not be more than one month’s rent in stabilized units; fees to superintendents or doormen, commonly called “key money,” are illegal.
— Ask for a Lease. Leases provide many important protections for unregulated tenants such as a fixed rent for the duration of the lease. Unless you have a lease, your landlord can also evict you without giving any reason (after 30-days written notice). However, if you want the flexibility of moving on short notice, you may not want a lease.
— Read your Lease. It is important that you examine your lease carefully. Once you and your landlord sign it, the lease is considered executed and you have in effect agreed to every provision inside it. Check for the following:
- Does the lease state the correct rent, address, and landlord?
- Does the lease mention all the amenities agreed upon? Be sure to write down any oral agreements.
- Check your lease to find out the due date for your rent each month, as well as what late charges apply if you miss the deadline.
- Check to see if utilities are billed separately or are included in your monthly rent.
- Are there any special building rules? Find out if your new building is: pet-friendly, has limits on guests, has restrictions on running a home business, etc.
- What happens at the end of the lease term? Can you renew automatically? What happens if you break the lease? Can you sublet or assign (transfer) the lease?
— Who is on the Lease? If you are a renter, having your name on the lease gives you more protections and rights than any unsigned tenants. If you want your partner, child, spouse, roommate or relative to have lease protections, it is a good idea to put their name on the lease at the outset (later additions may trigger a vacancy increase in stabilized apartments). But also be aware that more names on the lease may mean more complications in the future if relationships change.
— Roommates? If you are joining a household as a roommate, try to find out what the primary tenant’s plans are. If the primary tenant leaves and you are not on the lease, you have no right to stay in the apartment. If you would like to stay at your discretion, see if you can add your name to the lease, although this may trigger a substantial rent increase in stabilized apartments.
— Rent-Stabilized? If your apartment is rent-stabilized, be sure to keep the following in mind:
- Ask for the Rent Stabilization Rider. The Rider describes the rights and obligations of tenants and owners under the Rent Stabilization Law. It also states the previous rent for the apartment.
- Ask if the building is operating under the 421-a or J-51 tax incentive programs. If the building was built with the aid of a tax exemption, your rent is regulated for the period of the exemption (usually 10-20 years). At the end of this period, your landlord can charge “market” rates.
- Are you the first tenant in a decontrolled unit? If you are the first tenant in a previously rent-controlled apartment, the owner should have negotiated with you before charging a rent. You have 90 days from the first day of receipt of notice (called the RR-1 form) to file a “Fair Market Rent Appeal” (FMRA) if you want to challenge the new rent.
— Landlord’s Right to Access. If you are concerned about privacy, be sure to ask for wording in the lease limiting the landlord’s ability to enter your apartment (except during emergencies). Tenants in multiple dwellings also have the right to install and maintain their own locks on their apartment entrance doors, but you must provide the landlord with a duplicate key upon request.
— What Happens if Your Landlord Leaves? Landlords must notify tenants, by registered or certified mail, of the name and address of the new owner. New owners of rent stabilized buildings are responsible for returning any security deposits and interest. This responsibility exists whether or not the new owner received the security deposits from the former landlord (When a building is sold, the landlord must transfer all security deposits to the new owner within five days, or return the security deposits to the tenants). Foreclosure of the building also does not affect your lease.
A guarantor is someone who is willing to co-sign a lease on your behalf. They are responsible for all the terms of the lease. A guarantor can be a family member or an unrelated individual. However, they do have to qualify financially. In the event, you do not meet the financial or credit requirements, a guarantor may be a good option. Most landlords are comfortable with the guarantor living in the tri-state area (New York, New Jersey and Connecticut) although there are exceptions. Landlords typically require that guarantors earn a gross income between 75-100 times the monthly rent. For example, if you are renting an apartment that is $3,000/ month, the guarantor will need to make $225,000 per year. They will be required to produce the same paperwork as a potential tenant.
If you think you will require a guarantor, speak with them in advance and confirm they are willing to sign as a guarantor and disclose their financial information along with the documents necessary to secure a lease on your behalf.
APPLYING FOR YOUR NEW NYC HOME
You’ve found the perfect apartment. Now what? Your Michael Charles New York agent will guide you step by step through the entire application process. The first step is to fill out the landlord’s application or a MCNY application. Your MCNY representative will advise you of the necessary paperwork required for a specific owner to move forward. You will also be required to pay credit check fees and applications fees at this time. Once all of the appropriate paperwork is gathered, your representative will present your information to the landlord and oversee the approval process including any negotiations. The rental process moves fast so be prepared.
If you are renting in a cooperative (coop) or condominium (condo) you will need to prepare a board package. Please take into consideration coop’s can take 30 days or longer and condos can take several weeks for the waiver of first right of refusal. Speak to your MCNY agent about the coop and condo approval process and the specific requirements for any buildings you would be interested in.
SIGN A LEASE AND SECURE YOUR NEW NYC HOME
Once your application is approved, a lease signing will be scheduled shortly thereafter. At this point all funds are due in the form of certified checks. Sometimes the funds are due at application signing and an answer comes after. Your representative will advise you on the appropriate fee amounts which, where applicable, typically include the first month’s rent, a security deposit (i.e. one month’s rent or more) and the broker’s fee, all due at the lease signing.