Guest post: 10 rules for renting your condo right

by Ron Gitter

What appears to be the beginning of a beautiful landlord-tenant relationship can turn ugly faster than you think.  So notes lawyer Ron Gitter, whose sage advice has graced this blog before and whose Web site contains much more valuable information.

Perform your due diligence when you intend to hand over your precious property to a stranger, or even a friend or relative, he counsels.

For your peace of mind and financial security, consider all the issues that might have an impact the tenancy.  Be upfront about any conditions in the apartment that may be of concern to the tenant.

At the same time, there is no reason for your relationship with your tenant to be of the love-hate variety: He or she gets to live in a great apartment in the Big Apple and you receive a significant and, sometimes, obscene amount of rent.

Where we live, that’s peaceful coexistence.  The 10 or so suggestions below should ensure that war doesn’t break out:

(Flickr photo added by Mr. Wright)

1. Comply with all condo rental requirements: You must submit a rental application to the managing agent.  Even before the lease is signed, make sure that your proposed tenant understands that financial disclosure, various documentation and a background check may be required prior to the building’s approval of your tenant.

2. Check the creditworthiness of your tenant: Be sure to assess the background, references and credit history of your proposed tenant.  A credit report, which can be obtained with the consent of the proposed tenant, should be reviewed as part of the process. If you are not 100% comfortable with your proposed tenant, find someone else.

3. Use a rental broker to find a tenant: The rental broker will advertise the apartment, screen the applicants and collect a fee (in most cases) from the tenant.

4. Require the tenant to obtain “renter’s” insurance: Although rental coverage will usually be provided under the condo owner’s policy, it is important for the tenant to maintain his or her own insurance to protect against personal injury and property loss, including damage to the tenant’s personal property, and to add the condo owner as an additional “insured” under that policy.  The condominium may have additional insurance requirements for a proposed tenant.

5. If the apartment is furnished, list the contents: An owner of a furnished apartment should attach an itemized list of all personal property and indicate the condition. Taking photographs or making a video of the apartment also is a good idea. The tenant should initial the list so that there are no disputes in the event of damage or loss.

6. Restrict the right to make alterations: A tenant should not be allowed to alter or modify the apartment.  If you intend a long term rental relationship, permitting minor cosmetic changes to the apartment can be considered–cautiously.

7. Specify who will live there: The lease should specify the permitted occupants. Given the opportunity, renters can produce roommates in quantities that would put rabbits to shame. If you don’t want, say, boyfriends or girlfriends living there, the lease should say so in no uncertain terms.

8. Detail your policy on pets and smoking: The lease should make clear whether furry friends may join the tenant.  If so, the lease should provide for the removal if the pet causes damage to the apartment or to the building, or proves to be dangerous.  When a pet is permitted, it’s fine to obtain additional security (sometimes called a “pet deposit”).  Find out what requirements and restrictions the condominium may have, too.  As for smoking, see that the lease outlines your agreement with the tenant.

9. Get a sufficient security deposit: Although leases usually require one month’s security, two months’ security is much better if you can get it.  When a lease nears an end, tenants often request that the last month’s rent be taken out of the security deposit.  Uh, uh.  The deposit should be held until the tenant departs and removes everything, and you inspect the premises.

10. Retain a property manager if you’re inexperienced or live out of town: Usually for a percentage of the monthly rent, a property manager can attend to repairs or other problems that may arise during the rental.  But do check the manager’s references.

Lawyer that I am, naturally I can’t resist offering some other pointers:

A.  Ask an attorney for help. Let someone who knows what he or she is doing prepare the lease.  That’s what attorneys are for.  If the broker generates the lease, provisions such as renewal rights, brokerage payable in connection with the lease and if the tenant purchases the apartment, as well as other material terms, should be carefully drafted and reviewed.

B.  Don’t forget to have the lease properly executed. I’m stating the obvious, but you may be surprised to learn how often it doesn’t happen or how inadequate some written leases can be for particular situations.

C.  When it comes to residential reality, live and let live. For the nitty-gritty on this topic, please see “A Checklist for Renting Your Condo.”

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
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