What are the differences between these contracts?
To an unseasoned New York City renter, the various types of leases offeredand their legal implications can be confusing at best and intimidatingat 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 NYC.
Free Market or Prime Lease
This is an open market rental, and is the most common lease you willencounter. Previously known as a Prime Lease, it applies to non-rent-stabilized rental buildings, privately owned homes, and condominium rental lofts. A prime lease is given to you as the primary tenant or primary leaseholder. Rent prices and lease renewal increases are often determined by the price that the market will bear. Although landlords who have Free Market apartments for rent are not subject to rent stabilization guidelines, some follow the rate increases determined by the rent stabilization board which meets yearly to determine what the renewal rates will be.
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 Free Market lease tenant must obtain permission to sublet at the discretion of the landlord.
Co-op and Condo Leases
When you rent in a condominium, your landlord is the individual loft apartment owner, who grants a Free Market lease just as you would get in a non-stabilized rental building. A sublet is allowable only at the discretion and approval of the owner of the apartment.
In a cooperative, 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.
Rent-Stabilized Lease - It is extremely rare to find a rent-stabilized loft apartment.
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 for a limited period of time with written notice to and approval from the landlord.
- Once the rent surpasses $2,000 per month, the lease becomes destabilized when the apartment is vacated. 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 a tenant in occupancy since mid-1994 earns an annual income in excess of $250,000 for two years in a row, the landlord may de-stabilize the apartment rent. A tenant in initial occupancy since 1997 may have their rent de-stabilized if their annual income surpasses $175,000 per year.
- If a building converts to co-op, rent-stabilized tenants may be evicted after three years if they choose not to purchase their apartment.
- 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:
New 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. 11422
Phone: 718-739-6400
Lower Manhattan Borough Rent Office
(Shouth 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
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.