Showing posts with label landlords. Show all posts
Showing posts with label landlords. Show all posts

Jun 5, 2014

Brewer Writes Mayor to Reject Airbnb's Business Model

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Manhattan Borough President Gale A. Brewer is calling on City Hall to reject Airbnb’s business
model and fight its efforts to legalize the now illegal use of apartments for commercial use.

In a letter to Mayor de Blasio, Brewer warns that using residences as unregulated hotels risks further reducing the number of affordable and rent-regulated apartments in the City – right when they are most needed. The practice also creates unsafe conditions for the renters, neighbors, and visitors, she adds.

"The Administration must not jettison the tenant protections embodied in the current laws and regulations or accept payment on illegal activity that violates tenants’ rights," Brewer writes.

"In addition to the dangers and nuisances posed by Airbnb’s business model, the illegal hotel industry keeps substantial numbers of affordable housing units off the market. Many tenants, seeking additional income, avail themselves of Airbnb’s services and put themselves at risk of eviction." according to Brewer.

In the face of the State Attorney General’s intense investigation and subpoena of their records, Airbnb has recently revealed another strategy: to begin collecting hotel taxes on the transient use of residential apartments. They claim that this revenue will be sufficient to fund the Administration’s plans for the creation of new affordable housing. 

"New Yorkers who have chosen, and by their leases contracted, to live in residential buildings have the right to quiet enjoyment of that condition, and the protection of the laws that define such housing" according to Brewer.


Feb 10, 2014

NY Roommate Law

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Recently a couple of buyers have asked about the "NY Roommate Law" pertaining to "bylaws" rules and policies in a coop. Last year while I attended an exhibit at the Museum of New York about small spaces and the trend around the world of living alone, it was at that exhibit that I first learned it is illegal in NY for more than three unrelated people to live in an apartment or a house. 

The law, for decades part of the city’s Housing Maintenance Code, is little known, widely broken and infrequently enforced. NY has many housing laws that were reforms from the 19th and early 20th century tenements.

A landlord or coop may restrict the number of occupants based on housing/occupancy laws but you can generally take on roommates without having to add them to the lease or even get your landlord's approval.

Recently I've learned of "NY Roommate Law" Unlawful Restrictions on Occupancy Law. A law that entitles a tenant to have a roommate. This law trumps coop "bylaws" regarding the coop's right to approve all occupants living in a coop apartment. 

Roommate Law Explanation: 

If you are the only person who has signed the lease, in addition to your immediate family, NY law allows you to have another roommate who has not signed the lease. The roommate’s dependent children are also permitted. (Note: This law applies if the premises is the tenant’s primary residence)
·     Therefore, any lease provision disallowing a roommate that’s not on the lease (as well as his/her dependent children) is illegal.

·     If two or more people signed the lease you may have additional roommates provided that the total number of tenants and occupants (excluding dependent children) does not exceed the number of tenants on the original lease.

·     To make the above more clear, if 3 people sign a lease and 1 moves out, you can replace that person who moved out with a new occupant.  

      While many RE laws to protect tenants do not apply to co-ops, the roommate law overrides proprietary lease provisions that limit occupancy. 

This law allows tenants with leases to have roommates without interference from their landlords. While many tenant protection laws do not apply to cooperative apartments, the so-called Roommate Law does.

      The roommate law does not allow cooperators to circumvent the coops subletting policies, the coop shareholder must also reside in the apartment as its primary residence in order to benefit from the protection of the roommate law. 

Real Property Law, Section 235f "Roommate Law"

 Legal Disclaimer  - Information in this article is not intended as legal or financial advice and should not be used to substitute for advice of legal counsel.

Aug 22, 2013

Guarantors Co-Signers & Co -Purchasers

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What are Guarantors Co Signers and Co-Purchasers?


Over the years I have sold and rented apartments where a guarantor was needed. I have also sold apartments where parents and/or trust funds bought the apartment outright for an adult child or beneficiary.

A guarantor is simply someone who will cosign your rental lease and in the event you can’t pay the landlord rent or the coop maintenance they can legally go after your guarantor to collect payment.

In a condo it is very simple. A parent can buy for an adult child. A corporation and or a trust can buy a condo. Some condos have applications but many don't or have very simple applications. I  had a condo transaction where the couple obtained a mortgage from their parents. As far as the seller, listing agent and the condo were concerned it was a Cash Sale. Proof of funds  were shown with offer. A condo may require documentation but they can't reject a buyer. They can only exercise their "right of first refusal" and purchase the apartment for the same price and terms of offer.

It becomes more difficult purchasing a coop and even renting in certain Manhattan buildings. Most coops will not allow a parent buying for their adult child. Some coops will allow co-purchasing or a guarantor for working adult children. Some will not allow guarantors. In some coops even if the parents pay for the apartment, the coop will want the adult child residing there to be working with their own income and be responsible to pay the monthly maintenance and/or mortgage payments. The monthly housing costs can not exceed 25-30% of the adult child's monthly income.

Some rental buildings may require the parent to be on the lease. Some may not accept out of town guarantors and/or may require a few months of rent up front and additional security deposit. 40x rent in annual income is required by applicant and 80x rent is required to be a guarantor.

The coop will want full financial disclosure from both the guarantor and the applicant and from both applicants if a co-purchase. A guarantor letter and a gift affidavit is usually required as well.

An alternative to a condo purchase is purchasing a sponsor coop apartment. The sponsor is usually the developer or owner of building that has "unsold shares" in the cooperative corporation. I recently sold a coop sponsor apartment to parents in Ohio for their son that recently graduated college here. Purchasing a sponsor apartment in a coop is buying "unsold shares" there is no board approval process. However once purchased the shareholder has to adhere to the coop rules, enjoys the same "quality of life" as other shareholders but when unit is re-sold there is board approval and a board package is required.

I have worked with corporations looking for a rental apartment for corporate use. While the corporation has excellent financials, documented assets and cash flow, landlords will often require a personal guarantor.
 
While the Supreme Court of the United States ruled that a corporation is a person, New York landlords think otherwise. They want a personal guarantee from a person.

Lease "Good Guy" Guarantees:  

A good guy guarantee is a limited personal guarantee often written into a lease when a tenant is a business entity such as a corporation, partnership or limited liability company.

The guarantee, generally signed by a principal of the business entity, enables a landlord to bring an action against the guarantor in the event the tenant stops paying rent and continues to occupy the space.  A good guy guarantee is not necessarily onerous to a tenant. Although after a default, the landlord is free to pursue the tenant for unpaid rent (if there are any assets left in the business entity) the guarantor is released from its obligation to pay rent once the tenant vacates the space.  From a landlord's perspective, a good guy guarantee is an insurance policy against the amount of time it can take to evict a non-paying tenant (something that often takes a year or more).

Lease Guaranty Insurance:  

In many instances, individuals are unable to rent apartments they would like without a co-signer/guarantor, additional security or prepaid rent.

When a guarantor or co-signer is required, it is often difficult for a renter to find a third party that is acceptable to the landlord. For example, the prospective co-signer or guarantor may live out of state, or may not have the financial resources or credit to meet the landlord’s requirements. Recently an insurance company began a lease guaranty program.

The Insurent® Lease Guaranty Program was created to serve renters, landlords, condo/co-op owners,  by offering the first institutional guarantor of residential leases. The Insurent® Lease Guaranty Program is underwritten and issued by Argonaut Insurance Company, a property and casualty insurance company.

Instead of looking for a guarantor or co-signer, or having to pay a significantly larger security deposit or prepaid rent, a renter may utilize the Insurent® Lease Guaranty to satisfy the landlord’s financial and credit requirements if the landlord or coop will accept this new form of guaranty insurance.

 How to Rent an Apartment in Manhattan
 Buying A coop - Be Prepared and Qualified 
 Coop Board Requirements - What do Coop Boards ask For?

 
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This blog site is designed and published as a consumer service by local real estate broker to help Manhattan, New York City buyers, sellers and renters make informed real estate decisions. This site and its feeds are owned and operated by Mitchell J Hall, a NY State licensed real estate associate broker associated with The Corcoran Group and member of the Real Estate Board of New York.

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