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Welcome to the Neighborhood: Part One

Updated: Aug 29, 2019

It’s Labor Day in New York City – barbecues, last trips to the beach and the glimmer of football season just on the horizon.  It’s also the weekend when college students and young professionals, ever optimistic, again flood our fair city, searching in vain for the Holy Grail of New York rentals: a spacious apartment, say, in the West Village, for around $1,000 per month.

Having found a home, perhaps not a dream home, and undoubtedly requiring some sort of sacrifice in terms of size, location or cost, and having signed a lease, residents the city over (whether newcomers or lifelong New Yorkers) breathe a sigh of relief and begin settling in, hoping for the best, and believing that the worst is behind them.  Perhaps it is.  Or, perhaps the lease is just the first step in an acrimonious relationship between the tenant and landlord that might result in tension, costly repairs and, even worse, litigation.

New York City’s laws and regulations concerning the landlord-tenant relationship are complex and, at times, counter-intuitive.  This blog post, while not a substitute for a quality legal consultation, is an outline of some common problems that arise in the landlord-tenant relationship, ways to prevent the acrimony, and some possible solutions should complete prevention not be possible.

You’ve heard the saying “an ounce of prevention is worth a pound of cure?”  Nowhere is that more true than in the real estate context.  Hopefully, if you’re a tenant, you read your lease with a fine-tooth comb, asked questions, and negotiated more favorable terms.  If not – don’t worry.   All is not lost.  Most residential leases are boilerplate forms purchased from a legal stationery store, or downloaded from the internet.  Their terms, though guidelines for the landlord-tenant relationship, are not iron-clad, and any illegal terms can later be deemed unenforceable – but that’s all for another blog post.

The single most important thing a landlord and new tenant can do together to ensure a happy tenancy (whether short or long-term) is an inspection of the property.  This is a time to walk through the property together, discuss the condition of the unit, point out defects and work out a procedure for repairing any such defects.  At a minimum, even if defects cannot be repaired, the defects should be documented (preferably by date-stamped photograph and/or video) so that the existence of these defects can be made clear to a judge later, should the need for litigation unfortunately arise.

You should also ensure that your security deposit is being charged and maintained in accordance with the law.  Security deposits are generally not required, but are an expected housing prerequisite for the vast majority of renters in New York City.  The amount of the security to be held by your landlord for repairs and unpaid rent should be clearly spelled out in your lease.  Your lease should also specify where the security will be held.  For most buildings in New York (those with 6+ units), a landlord must deposit the security deposit in an interest-bearing account for just that security deposit, and where the security deposit will not be commingled (or mixed) with the security deposits of other tenants or the landlord’s own money.   The landlord must notify the tenant in writing of the name and location of the bank where the security has been deposited, and the amount placed in the account.  The interest earned on this account belongs to the tenant, although the landlord may deduct an “administrative fee” of not more than 1% of the security deposit each year.   Any remaining interest and security deposit principal (the amount originally paid) must be returned to the tenant at the end of the lease (provided that the security deposit and interest earned thereon is not legally retained by the landlord for repairs or reimbursement for unpaid rent).

Inspecting the unit together and having a frank discussion about the amount and location of the security deposit will do a great deal to ensure that landlord and tenant are both on the same page.  In the next post, I will discuss the inevitable issue of repairs, when they are necessary, how they should be approached, and what recourse both landlord and tenant have in the face of costly, potentially dangerous, defects to the premises.

#inspection #lease #securitydeposit

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