for smart Renters
Glossary of real estate terms...
Board/Board of Directors: These are the people who are elected by the apartment owners to run the business of a co-op or condo. In most co-ops, you will need the Board’s approval in order to rent an apartment from the apartment owner.
Condominium: A type of apartment ownership where the owner has an undivided interest of ownership of the common elements of the building. Usually there is no board approval to rent such an apartment. You generally deal directly with the owner or a managing agent who represents the owner.
Co-op/Cooperative: This is a residential apartment unit whose title is held by a corporation. A shareholder in the corporation has a right to live in a specific apartment and holds a lease to the apartment. The apartment can be sublet (rented) to a non-shareholder (you, the renter) according to whatever rules the corporation imposes. The choice of subtenant must be approved by the corporation Board of Directors. These rules vary from co-op to co-op. Technically, you, the renter, are a subtenant of the co-op, not the tenant. The apartment owner is the tenant of the co-op, and the co-op itself is the landlord.
Escrow: Ernest money deposit, such as a security on an apartment for rent.
Guarantor: An individual with a high enough income and good credit who will guarantee the terms of the lease if the renter should default, including making the monthly rent payments until the end of the lease. Students and other low-income renters, or renters with poor credit histories, will probably need a guarantor.
Lease: A written or oral contract between a property owner and a tenant that transfers the right to exclusive possession and use of a property to the tenant for a specific period of time for a stated consideration called “rent.”
Listing: A term used to describe an apartment that is available for rent. This word is used by real estate folks to talk about their “inventory of listings,” i.e. the apartments that they currently have for rent.
Open Listing: An apartment made available to the public by the landlord. Although brokers may also have an open listing, you don’t have to go through a broker to get it. Most NY apartments are open listings - you only have to know about them, know how to get in to see them, whom to contact when you want to apply, and what preparation, paperwork and monies you need to have on hand. In short, you need exactly what NoFeeRentDirect.com provides!
Pre-War Apartment: A building built before World War II. Prewars are usually thought of as having better construction, better soundproofing between apartments, and more character than postwar apartments. While somewhat true, there are many, many exceptions to this rule.
Prime Lease: A lease providing generally the same conditions as a rent-stabilized lease except that rent increases are subject to market forces and are subject to negotiations between the landlord and the tenant. The landlord may raise the rent to whatever he/she feels the market will bear. Most landlords follow the increase of the rent-stabilized leases, but they are not obligated to do so.
Rent Control: A law that determines all the details about the relationship between a renter and a landlord, including how much the rent can be raised each year. Rent Control covers only some apartments with the same tenant in continuous occupancy since 1972. When a tenant in a rent controlled apartment moves out or dies, the apartment is decontrolled and rent can be set at the market rate. No new apartments are rent controlled. Related:, see the definition of Rent Stabilization below.
Renter’s Insurance: A standard insurance package that covers residential real estate against financial loss from fire, theft, public liability and other commercial risks. You need this, especially in a co-op or condo sublet.
Rent Stabilization: A less onerous form of Rent Control. A tenant in a rent stabilized apartment is guaranteed the right to renew the lease each year at a rent increase set by a rent stabilization board.
Subletting: The leasing of an apartment by a tenant to a third party for part of the tenant’s lease term. Also is the legal term for renting a co-op apartment. (See the definition of Co-op/Cooperative above.)
Security Deposit: An amount of money, usually equal to one month’s rent, that is held by the landlord for the duration of the lease. In a rent stabilized apartment, this money is held in an interest-bearing bank account. The interest is payable to the renter and is reported to the IRS on a W-9 form, which you will be asked to sign at the time of lease signing.
Window Guards: Small crossbars that are installed on apartment windows that prevent small children from falling out. These are required by law for every apartment where a child under the age of 10 lives and must be installed by the landlord at no cost to the tenant. At the lease signing, you will be required to sign a Window Guard Form, where you indicate whether or not you wish to have the window guards if you and your roomates have no occupants under 10 yrs. old. The window guards are not strong and should not be confused with window security gates.
Window Security Gates: Gates for your protection against illegal forced entry to your apartment. They may already be on some of the windows when you rent the apartment, but the landlord is under no obligation to install them if they are not already present. Be sure that you buy only NYC Fire Department Approved security gates.
W-9 Form: This is the form used to notify the federal government of the interest earned on your security deposit. You will be asked to sign one of these forms at your lease signing if you are renting a rent stabilized apartment.