Types of Leases
To an unseasoned New York City renter, the various types of leases offered and their legal implications can be confusing at best and intimidating at worst. And in a landlord's market, there is precious little room for negotiation. The following summary, along with government agency contacts, should help you understand the different types of legal rentals that are common in New York City.
- Rent-Controlled Lease
- Rent control was a form of consumer protection implemented by New York
City in response to the postwar rental housing emergency, which regulated
lease terms, rents, services, and such for qualified buildings. Rent control
is no longer in effect in New York City, except where an apartment is
"grandfathered" by continuous occupancy of a tenant carried
over from rent-control status, which terminates when that tenant moves
out. No new leases are available under rent-control regulations. In general,
a tenant must have been in continuous residence since mid-1971 or earlier
to qualify for continued rent control protection.
- Rent-Stabilized Lease
- Most apartments in rent-controlled buildings that were occupied after mid-1971 have converted to rent stabilization, which is a more liberal version of rent control. Over one million apartments in New York City are rent stabilized. Under this status, the city government regulates lease terms, rent increases, rent renewals, required utilities and services, and so on.
- Some key features of a rent-stabilized rental are as follows:
-
- Rent Increases are Regulated by the City.
- Each year, as a result of negotiations between tenant groups and the Rent Stabilization Board, standard percentage increases are set for one-year and two-year leases renewing that year.
- Tenants Have Automatic Lease Renewal Options.
- A landlord may not terminate a lease unless there is due cause to show the tenant has defaulted on the rent, violated lease terms, or caused damage or other disturbance to the property.
- Tenants Have the Right to Sublet.
- Tenants can sublet for a limited period of time-two years within a four year period- with written notice to and approval from the landlord. This option is subject to compliance with article 226B of the real property law which addresses rent stabilized sublet conditions and allowances.
- Decontrol
- A lease on an apartment will become decontrolled upon becoming vacant if the legal rent has surpassed $2,000 per month. At that point, rent increases are at the discretion of the landlord, and all other rights and provisions of rent stabilization are no longer applicable.
- If the legal rent exceeds $2000 a month while a tenant still occupies an apartment, that tenant is still protected by all rent stabilization laws and the apartment does not become decontrolled until it is vacated or unless the current tenant earns an annual income in excess of $175,000.
- A tenant may have their rent decontrolled if their annual income surpasses $175,000.
- Most Manhattan rent-stabilized buildings are walkups or elevator buildings, although there are a few luxury doorman buildings where rent-stabilized apartments can be found. There are also some new constructions that for tax purposes have adopted rent stabilization, including apartments over $2,000 per month that do enjoy the benefits of regulated increases, guaranteed renewals, and so on.
- For more information, you may contact the following New York State and City offices:
| York State Division of Housing and Community Renewal | ||
|---|---|---|
| Central
Office for Rent Administration and Queens Rent Office Gertz Plaza 92-31 Union Hall Street Jamaica, N.Y. 11433 Phone: 718-739-6400 |
Lower
Manhattan Borough Rent Office (South Side of 110th Street
and below) 25 Beaver Street, 5th Floor New York, N.Y. 10004 Phone: 212-480-6238 |
Upper
Manhattan Borough Rent Office (North Side of 110th Street and above) Adam Clayton Powell, Jr. Office Bldg. 163 West 125th St, 5th Floor New York, N.Y. 10027 Phone: 212-961-8930 |
| New
York City Rent Guidelines Board 51 Chambers Street, Suite 202 New York, N.Y. 10007 Phone: 212-385-2934 email: Questions@HousingN.Y.C.com |
||
- Non-Stabilized Prime Lease:
- This is an open market rental, and applies to non-rent-stabilized rental buildings, privately owned homes, co-ops, and condos. A prime lease is given to you as the primary tenant or primary leaseholder.
- Sublet:
- This provides for a secondary leaseholder. The primary tenant is still legally responsible for payment of the rent and fulfillment of the lease terms.
- A rent-stabilized tenant has the legal right to sublet for good cause for a total of two years within each four-year period with written notice to and approval from the landlord.
- A
nonstabilized prime lease tenant must obtain permission to sublet at
the discretion of the landlord.
- Co-op and Condo Leases:
- When you rent in a condo, your landlord is the individual unit owner,
who grants a prime lease just as you would get in a nonstabilized rental
building. A sublet is allowable only at the discretion and approval
of the landlord.
In a co-op, the landlord is a shareholder in a corporation that owns the building, and he/she holds a proprietary lease on their designated unit. They are, therefore, the prime tenant and your lease is technically a sublet. In most co-ops, the board of directors of the co-op corporation must approve all sublets as well as unit sales, so in those cases you must be approved by the co-op board as well as by the unit holder. - A Note About Leases:
- Be aware that a lease is a binding legal contract. It protects your right to enjoy the premises peacefully for the entire term of your lease, regardless of changes in ownership or status of the building. Likewise, you are legally bound to fulfill the requirements of your lease including payment of rent for the entire duration of the lease term.