Posted By Daniel ~ 11th January 2011
If you are renting an apartment in a Condo or Co-op, your lease signing occurs at the same time as when you fill out the Board Package, as it must be submitted to the board along with all other materials. Once you’ve done so, you will simply need to await final board approval in order to schedule your move in (this can take up to 3 weeks depending on the building), or for notice of your board interview should one be required.
For those of you applying for a rental property….So you’ve submitted your application and supporting documents, the landlord has run your credit report and you’ve been officially approved to rent. Congratulations! You’re one step away to moving into your new home. Typically the lease signing will occur at the landlord’s office or if you’re working with a broker, possibly at the broker’s office.
Q. What should you bring with you to the lease signing?
1. “Bank Certified” Checks for rent and security – Firstly, “bank certified” simply means that the checks were issued by a bank and not a person, therefore they can not bounce. Owners will typically ask that these funds be delivered as separate checks rather than combined in order for them to be deposited into separate bank accounts. Providing the building is greater than a four family house, the owner is required to place your security deposit in an interest bearing account and so long as you haven’t done any damage to the property, at the end of the lease these funds will be returned to you along with some of the interest. (Don’t get too excited, the owner is allowed 1% and you the remainder, which typically doesn’t work out to a whole lot.)
Note – you only need “bank certified” funds for the lease signing. All other subsequent months rent can be paid via personal check, or if your owner has the ability, they might even accept credit card.
2. Bank Certified check for brokerage commission – If you have used the services of a professional real estate broker, the commission for this service is due at lease signing, and only at lease signing. Never before!
Note – If your company is covering this expense as part of your relocation package, you may not be required to bring this. Check with your company relocation manager to see if you are expected to lay these funds out and get reimbursed, or if the broker is to bill your company directly.
3. State or Government issued photo ID – For those of you who are from outside the US, your passport is fine.
Q. What is in my lease?
The lease is the legal rental agreement between you, the tenant, and the owner of the property. Make sure you read the lease in it’s entirety BEFORE signing. Some employers may require you to submit a hard copy of the lease to the company’s legal department to review before they will allow a transferee to sign off, so make sure you know your corporate policy before you go to sign.
Most owners will use a standard form of apartment lease published by either The Real Estate Board of NY (REBNY), or by Blumberg, the legal document company. It is fairly common for the owner to state that the lease “may not be modified” in any way or it will be considered void. Well, that may be what the landlord says, but it isn’t legally correct. A lease is a contract which may be altered as needed to suit the particular circumstances. However, as NYC housing courts tend to be heavily pro tenant, landlords use leases to try and protect themselves from tenant default. So don’t be surprised to find the lease appears to be heavily one sided in the landlord’s favor.
On a personal note, I have many corporate clients who require legal review prior to sign off, and in most cases legal gives their blessing without much of a fuss.
Q. What are riders?
Riders are additional documents affixed to the lease and can include anything either not contained in the lease itself, such as building rules, or as a modification of what is stated in a boilerplate lease agreement. The reason for this is that the riders supersede the lease itself, so no matter what the lease says, if a rider says otherwise, that is the prevailing document. You will also find government riders attached, such as lead paint, window guard, and most recently bed bug riders.
Note – No matter what anyone tells you, get it in writing! If you have agreed to certain terms with the owner that you don’t find contained in the lease agreement, make sure you have it in writing in a rider.
Q. Why must I sign a W-9 form (W-8 for non US citizens)?
As noted above, when your security check is deposited into an interest bearing account of the landlord, you are entitled to anything above 1% interest earned. The owner is thus required to report this interest to the government for tax purposes. This form allows them to do so.