Condo rental question: is it normal for tenants to agree to pay all increases in common charges, fees, and taxes? Or to pay all the landlord’s legal fees in case of a dispute?

Then there is this:
“ Tenant must pay for damages and money spent by Landlord relating to any claim arising from any act or neglect by Tenant. If an action is brought against Landlord arising from Tenant’s act or neglect, Tenant shall defend Landlord at Tenant’s expense with an attorney of Landlord’s choice”

I understand why this clause exists—that is, if we do something bad that causes the landlord to be sued, the landlord shouldn’t have to pay to defend herself. BUT, I worry that it opens us up to paying the landlord’s legal fees in case of any kind of dispute, whether it is frivolous or not and whether it is actually related to an ‘act’ of ours or not. Am I misreading this? Should I agree to the clause?

Thank you!

I haven't come across this before. I take it you're renting from an individual owner of a condo rather than from a management company?

ha, seems like owners are now trying to pass all those "benefits of ownership" to renters.

I've never seen that before... I say push back. If their mortgage rate goes up, you don't pay for that either.

I really don't know for certain, but that A and B clause certainly sounds as if the LL is trying to have it all ways - you can certainly ask to have that removed from the lease, as it ould make your rent a very variable number.

Well what are the thresholds for notification of common charge increases? Presumably it's the owner who will get the notice, and not you.

Are you entitled to some kind of advance notice, or can the owner say on the 10th of the month, btw, when you pay your rent to me in three weeks, you've got to add $200 to it because my common charges just went up....?

I think you should demand the same entitlements you would have if you were in a normal rental apt. You should absolutely require a certain amount of advance notice to any kind of increase in your monthly outlay.

As for whether or not you should pay it -- I have no experience with renting condos, so maybe it's considered normal, but it sounds sort of outrageous to me. The owner is laying off the risks of ownership on the renter.

What are you getting in exchange for assuming those risks? Nothing that I can see. You're not accumulating equity, nor muthin.

I would see if they can waive those clauses. If not, see if they'll agree to lower your rent if common charges decrease (my condo fees are actually going down 16% for 2010, which I'm actually not all that thrilled about, but just goes to show you that this can happen, despite what others might tell you). The second clause doesn't seem as unusual to me, but you may want to have a lawyer look this over.

"What are you getting in exchange for assuming those risks? Nothing that I can see. You're not accumulating equity, nor muthin."

Well, you get the benefit of not losing 25% of your "investment".

;-)

Sounds like an IQ test to me.

Can you imagine renting from a traditional rental building and seeing your rent will be adjusted depending upon the price of oil, insurance, and taxes during the year?

BTW, aren't condo taxes going up something like 10% in the new year?

This is nutty. Do you know anything about the taxes or tax history? What about the building finances and common charge history? Is there an abatement? Taxes will be going up, so you are in essence agreeing to a rent increase. Tell them they can ask for a rent increase at the end of your lease -- and can base it on taxes, common charges or the color of the moon if they like, but don't agree in advance to rent increases during the lease.

Clause A is interesting. Given a condo's limitations in how it can pay for, say, a new boiler, new roof, a lawsuit, etc., an assessment could be called an increase in common charges. "Uh, it's about that $20K in additional rent you owe me...."

No idea whether those clauses are standard in condos, but now that it's a renter's market, why enter into anything iffy?

1. yes those clauses are in the boilerplate version on condo leases.
2. i am glad you read the lease as most people do not!
3. The likelihood is that both the broker and the owner may not even be aware of these clauses, I would just tell them that you are crossing them out and are they ok with that. Most reasonable owners would be fine with this..
DO NOT keep it in the lease, everyones taxes are sure to rise this coming year, and if you sign a legal document stating this you will be responsible should an owner decide they want to enforce it.

So I've rented in a condo recently and a co-op (from an individual owner) many years ago.

The broker representing the condo owner was highly reputable. And the owner was very good to deal with throughout the whole term of the lease.

The first clause should come CROSSED OUT on the lease form. Absolutely not your responsibility. You are negotiating a rent and that is what you should be paying. If there is a broker involved in this, if he's representing the owner, he's dishonest. If he's representing you, he's an idiot.

The second clause - it's hard to get rid of that one. I crossed it out on a lease and lost the lease as a result of it. However, many years ago when I rented from an individual owner in a co-op for many years, and the owner was an attorney, I wasn't knowledgeable enough to even know what to do with a clause like that then, but I did put in a clause that limited my total liability under all circumstances to the remaing value of the lease (consider: plus the amt of security deposit). Frankly it's probably easier to put in a limitation on liability than to cross out that paragraph, and putting in a limitatin on liability (both $ and time) is a good move in any business dealing. Crossing out that paragraph probably makes the owner think you might be trouble.

Thirdly, you didn't ask about this, but at least in the Blumberg lease (there are two standard leases in NYC, one is a Blumberg lease and the other is a least by the REBNY) there is another paragraph you absolutely want to cross out and should be easy to have removed - the paragraph is about the owner's rights to terminate the lease in the even that the owner is selling the apartment. Actually the wording is even more broad than that, doesn't even require an actual sale or bona fide listing but just wanting to sell. Irrespective of the actual language, there is no way you should give this unilateral option to the owner - most don't even expect it. If you are there for one or two years, and the owner wants to sell or does sell, it comes with your tenancy for the term.

Lastly, I'm a little suprised at all of the above people for commenting when they have no experience with this whatsoever.

Good luck.

I am not an attorney.

Good morning everyone, and thanks for your input! It amazes me that some people don't read their leases. I feel like I'm signing my life away so I had better know the details! Anyway, the unit is in a big building with lots of amenities (pool, gym, etc) so I can see how common charges could really go up. And yes, we're renting from an individual owner, not a management company. The lease is a Blumberg lease, so splaken, thank you for bringing that other problematic clause to my attention. I'm going to use the advice you've all given (cross out the first clause entirely, and if that doesn't work, negotiate a limit and some serious advance notice, and then try to limit the second clause) and I'll let you know what happens.

You're reading a standard co-op lease - that's what "additional rent" is (read: special assessments) - not a rental unit lease. It is not a standard condo lease agreement.

AJC10, splaken's post is spot-on.

ajc10, what building is it?
too personal? where in NY is it? UES?

don't have time to read the entire thread but why would someone who has a choice of apartments to rent, prefer to rent a home with worse terms than another home?

I'm amazed at the amount of bad information here and the fact that it continued even after my post.

AJ, don't go in with the assumption that the first and third points I discussed are negotiable. They should be hard points for you. If crossing out, and explaining the rationale, for the first point gets you push back that's any more than short posturing, it's time to go after you politely suggest that the broker involved go back to his office and check with his knowledgeable colleagues.

And stevejhx is wrong too. The type of lease is at the TOP of the lease form in plain English. Unbelievable.

As an owner/resident of a unit in a
condo Building at 150 East 56th St in Manhattan, please allow me to share my personal experience:
Check the web-sites of the N.Y.C. Dept. of Buildings, and the HPD. If you see a history of, and/or open violations or overdue compliance: DO NOT RENT IN THAT BUILDING.

Do not assume that all Condo Board of Managers, their managing agents, and even their attorneys are honest and ethical. Their mis-management will result in higher Common Charges, and will ultimately cause a rent increase to you.

Also check to see if the Building has any lawsuits on it; for the same reasons as above. Even if you are renting from an owner who lives in the Building, don't assume that the owner knows what is actually going on there.

Feel free to check my address, on those web-sites. My Building has been mis-managed for years. Most of the owners don't live in the Building, and many who do are clueless.

Steve--the lease's title is "Lease of a Condominium Unit". Not sure if that helps clarify. I talked to the broker and they are willing to strike the clauses that say we will pay any additional taxes, assessments, fees, and the like (PHEW!) but are not willing to strike the clause wherein we agree to pay the Landlord's legal fees or the clause about terminating the lease in case of a sale (or desire to sell).

I would never sign a condo rental lease with either of those first 2 clauses. Higher maintenance charges, property taxes, etc are risks generally understood to be borne by the owner. Plus, unless you as a renter get voting rights associated with that responsibility to pay higher / lower maintenance charges, why would you agree to pay more if they increase ? What happens if the plumbing needs to be replaced? After all, with these clauses your landlord could vote to have the building entirely refurbished, but you would pay the costs. Also, note that your rent would not go down if taxes and maintenance went down. Of course, landlords will seek to pass on higher ownership costs to renters one way or the other, but the traditional means to do that is via renegotiation of rent at lease renewal.

Don't know if you would want to go this route, but you could find out if you could get a good discount on the rent if you go with the lease termination clause. And if you do go along with the termination clause you should ask for a specified period from notice to termination (90-120 days?)

Splaken--you're a star. We did get them to agree that they will give 60 days notice if they "want to sell" the apartment, rather than the 30 days that the Blumberg lease specifies. so that's a little better.

The building is on the UWS. It's good advice to see about violations or overdue compliance. Thanks, Truth.

"The type of lease is at the TOP of the lease form in plain English."

That's not what I mean. I mean that those clauses are included in co-op leases. They are negotiable in condo leases.

Remember, when someone hands you a legal document, that is simply the first phase of negotiation that is drawn up to benefit that party the most. This is no big deal, don't get upset. Simply go through the lease with a fine tooth comb, scratch out what you choose, initial, add in language you choose, initial, and send back. Easy peasy, lemon squeezy. Then the negotiation begins. Leases are to be negotiated just as rental rates are.

"Easy peasy, lemon squeezy"

OMG.

You really want to allow the owner to kick you out because he's selling? What then do you actually get by entering into a lease? It's entirely absurd for a renter to agree this. I can only hope you are getting a significant discount from a comparable apartment in a rental building because of the potential for you to be out and inconvenienced.

If you must agree some provision, minimum 2 calendar months (not 60 days) from the time that the owner enters into (ie signs) a listing agreement with a broker for a sale ... but even ask, why do you need to be out before a sale is transacted just because a listing is in effect? This right granted the owner can not be during the first 6 months of the lease (if the owner is planning on selling now, he should know and you should be told). If this occurs within the first 12 months of the lease, your moving expenses are paid including reimbursement of any brokerage fee (not that I advice any renter to pay a brokerage fee) and any fees that you paid to the condo for the application and your security deposit is returned in full on the date that you vacate, no later. Oh, and look the owner in the eye at the time of signing, and ask him flat out, are you planning on selling within the next 12 months.

This may have have discussed early, sorry, but. I leased a vacation property years ago with a sale provision. You want to put in strong language to protect you during times of showings. Clearly spell out how many showings, times of day, days of week, required notice...etc..etc..

Also, the things that Truth talked about are irrelevant to you.

And I hope you aren't paying a brokerage fee.

Remember that many condo owners are a bit desperate right now. Obviously you want a good relationship with the owner because under normal circumstances you should have a 12-24-longer relationship with this person. But don't be afraid to walk away if terms aren't to your favor.

By mid January, unrented units across the board will be knocked down somewhat: driest season for entering into leases is mid-Jan through April and October and November

cross it out or move on - this isn't Mayberry and you have 1 apt and 53 jillion people are vying for it. who would agree to this?

Well there you go.

Remember, you probably negotiated the rent (or just agreed the listed rent) assuming these clauses (1 and 3) didn't exist.

AJC10, leaving the clause in there is a joke: it's a standard cross-out clause in the Blumberg lease. From the fact that they wanted to leave it in there, it seems like the owner is seriously considering selling in the next year or two. Is the unit currently listed for sale as well? Regardless of the clause, do you want to get yourself in a situation whereby you'll likely need to move in a year? Use this issue to play "cold" on the place to get the clause back in there, but consider the issue regardless. One of the most important issues I consider when I have leased places is the term of the lease and the owner's general intentions with the place. I would never move into a place where I thought the owner is considering a sale in the next year.

Thanks again all--I'm frankly exhausted by all of these little issues. It seems like some bizarre New York rabbit hole wherein renters are given leases with many clauses that are absurd and have to be crossed out. I'll go back to the table about the clause that enables the owner to kick us out if they "want to sell" the apartment. But there are several other clauses that I think I just have to live with, like the one indemnifying and holding harmless the Board,the Building, and the Landlord for any act, including negligent acts. Or paying their legal fees.

Luckily, the owner just bought the apartment, so maybe that means they won't flip it.

I'm disinclined to walk and keep looking--I looked for two months, mostly at apartments that were quite expensive and really not that nice. The one we've settled on is the best of the middling options, not something special. And while I've dealt with a couple of quite lovely and seemingly honorable brokers, I've had my share of the weasels and the liars.

We agreed to a 1-week broker fee. I don't like it but I don't hate it enough to walk away.

I'll let you know what happens.

splaken: The things I mentioned are relevant and important for AJC10 to know about. No renter should risk getting stuck in a Building where the Condo Board of Managers, and their managing agent are out of control. Wasting the Condominium's cash reserve funds with: frivolous lawsuits against owners; paying penalties imposed by the DOB and/or HPD. Also, the violations could be Building-wide; or in the apartment that you are renting (or the surrounding apartments ).

We signed the lease! Splagen, thanks again for your excellent advice and for alerting me to that clause about what happens when the landlord "wants to sell" the apartment. We were successful in striking it. And thanks to everyone else who gave me the backbone I needed to go back to the table repeatedly over these funny provisions. I really appreciate it!

Great to hear, AJC10, and congrats on your new home!

I'm glad it worked out

bump!

wow, I think AJC10 owes splaken a beer or 3

rent somewhere else -- the $ for $ pass on does not make sense -- rents are going down; cost of owning is going up --- do nor let the owners pass that burden onto you...

Manhattan, read my posts in this thread.

And just because an initial lease agreement isn't to your favor doesn't mean you should walk right away. If you know the points to negotiate, start there. See my posts above. Seriously.

Splaken, beers are on me. Sheesh, I haven't had a beer since college. Thanks, too, to the others of you who backed up the argument (graffiti grammarian, brokerdax, inonada, bjw2103, ph41, cmtsuk, et al)!

Do the rest of us at least get to share one of those beer samplers with the six mini-glasses of beer?

splaken, et al -
any advice on locating these sub-leases? CL is simply atrocious.
Also, there seem to be so many listings seemingly off the mkt at the moment -one would think these sellers would like to find renters.

thanks. great thread!

A nice spawn off this thread would be a discussion of people who rent in brand new Condos enjoying the brand new amenities and sometimes masquerading as owners to the other residents and staff.

Riversider, that last statement REEKS of snobbery. When you rent in a new building you are paying big bucks (certainly not low-income housing prices) and of course should be enjoying those amenities just like the owners. Why is it anyone's business whether you are renting or own? Not that I would "masquerade" as an owner, but I wouldn't react kindly to any busybody's inquiry since an owner is no better than a good renter. Half the owners never even intend to live in these apartments, they're just in it for the investment, so in those cases it is more the renter's home than it is the owner's.

helenwaite, search streeteasy.
Riversider, I said before that I lived in a condo, although an established one and the percentage of rentals was low. I don't think I was treated any differently by anyone.

Another relevant point I just posted elsewhere:

For a condo board itself, you'll have a managing agent to work through, plenty of paperwork including in some circumstances bank statements and references, and the fee is one of their bonuses, and the timing and it will at least have to make it to the board. Take into account the fee in your calculation, $600 is worth $50 per month.

My recommendation on approvals is to make sure that the owner has previewed his intent to rent with the board so that the approval can be speeded, and for the renter to consider negotiating a drop dead date in the lease agreement, e.g. this lease agreement will have no force or effect if the condominium association's right of first refusal is not waived by [date]. And negotiate a date with the owner that does not allow for the full lazy time. Approval should be really quick, just a signature by the board president, so don't let people sit on paperwork and have someone else be in control. Make it the condo owner's problem to get it through, quickly, as he's in the best position to do the work in advance and push it through. This should not be a point of antagonism, but one that is in both sides best interests, and will also give you a sense if the owner is in good graces with the board or not which is more of an issue with older more established condos.

i signed the lease in 2009 a two year lease never removed that clause now going to my third year when i renewed she then asked me for 3k bc of property tax increase. i believe on clause for lease it states tenant has to pay in the fiscal year i dont believe she can bill me 20days before my third year going into my third year renewing. Any advice