big security deposit--normal?

I would say the market rate is defined by what price the market would bear, which in this case appears to be $1450. I have rented apts where they asked for 2x monthly rent as deposit, but never the argument stated above.

Is this apartment in Battery Park? That's the only place that I can think of where they have this "market rate" concept apart from the actual price of the apartment. Even in Battery Park though, you should just be depositing the "market rate" - the concession.

http://downtowny.blogspot.com

That's excessive, bizarre and potentially shady. If 'market rate' is $3,220, then why are you paying $1,450? You ARE the market.

And how does the landlord arrive at the $3,220 figure? It's not two months rent, it seems to bear NO relation to your agreed rent.

As you clearly are, I'd be a little concerned about putting this amount of money into my landlord's hands when it's so outside the norm. Maybe someone else has a good explanation for it.

Yeah, as long as your credit score is above 650 (or even 600 these days) you should only have to do one month. If they wanted an extra month it should only be because they have legitimate credit concerns. But no, I have not heard what they are pitching. And the deposit MUST be held in escrow, and you get the interest, not them, so it should not matter.

Thanks, guys. I thought it seemed weird, so I'm going to go back to the landlord and say that I don't feel comfortable doing this way unless they have a pretty great reason. I'll keep you posted!

And, no, the apartment's not in Battery Park, it's on the UES.

laura....can you please tell me how you found an apartment for $1450...help!!!

Well, it's a studio and 5th-floor walkup...so there's that...but I'm happy (I'll be happier once the security deposit thing is straightened out). I don't know, lots of Craigslist looking. I had my paperwork ready, saw two absolutely awful ones, and when I saw this one and liked it I just jumped and submitted the application.

I bargained down to $1450 from $1495--by bargained I just mean I said that's what I'd offer. Maybe I could have gone lower, but the girl who lives there now is paying $1725...and I'm a wuss...

congrats that you were able to bargain from $1725 to $1450...it confirms what everyone is posting..rentals are way down. Thanks for your help and good luck with the apartment.

Oops, no, the apartment was listed at $1495, less than she's paying now, so I guess that they have some idea of the market. I just got them to knock off $45 more.

Good luck with your search--where are you looking?

julia - what/where/how much are you looking to rent?

laura - security deposit request sounds unreasonable (and odd).

hi uwsmom...i'm looking everywhere but my favorite area would be upperwestside...my current lease isn't up till the fall and i get one or two (not sure) free months so i have time. I'm currently paying $2495 for a non-doorman small one bedroom and I want to bring it down to $1800, if i can. Did you get the apartment?

>>Well, it's a studio and 5th-floor walkup...so there's that...but I'm happy (I'll be happier once the security deposit thing is straightened out).<<

Then the so-called "market rate" is NOWHERE NEAR $3220. Ain't NO place anyone's gonna be paying $3220 for a 5th-fl walk-up studio. Your LL is full of BS.

Yeah, even in early 2007 a walk up on the UES? No way, not even if it was lennox hill.

Yeah, keep us posted. I want to hear this ...

I will let you guys know what they say. Glad I haven't written any checks yet! I really like the apartment, so I am not sure what I'll do if they say I do have to pay that amount as a security deposit...?

Look, if you really love and want the apartment you can tell them you'll put down two months' security deposit, which is more than ample for any apartment. Frankly, I'd also consider asking for a concession, like one month's free rent or a reduction--$1450 for what you're describing simply isn't a very good deal, IMO.

Just curious--is this an individual apartment owner or does the LL own the entire building? It just seems bizarre that he/she is so out of touch with reality...

By the way, I've never, ever heard of security deposits being based on some undefinable "market rate". They're based on the monthly rent as it appears in your lease.

As others have posted (and you might remind the LL of this) "market rate" means what the market will bear, IE, what the apartment will rent for today. YOU are the market, in this case.

To my knowledge and recent experience in signing a lease, none of the big established landlords (Rose, Related, etc.) ask for anything more than one month of the actual rent. And these are the guys with all the lawyers so you can't help but think that if they could ask for more, they would. Lots of property owners are sorry that prices have dropped, but they have and with them, so have the security deposits. I'm skeptical of what you're being told and if it were me, I'd be very cautious about going forward.

tell them $1,100 a month + one month security...take it or leave it.

Back when the NY State Senate was controlled by the Democrats, there was serious talk of amending the Rent Control Laws for NYC. I'm wondering if the Legislature may be thinking of adding a clause saying that if an apartment has never been rented out at actual market rate (i.e. the "preferential rate" vis-a-vis the "legal" rate) then the apartment would again become rent controlled. I'm left wondering if perhaps the landlord wants to keep a copy of a check from the tenant for the "legal" rent so they can claim that the apartment rents at the "legal" or market rate?

that's nice but this is a fifth floor studio walk up....this baby has never been nor ever will have a market rent of close to $3K.

nick, the legal rent isn't difficult to figure out. There's a state department, something like the initials DCHR or DHCR who keeps a listing of what the legal rent is on an apartment and sends out a form to the tenant and the landlord every year.

splaken.

To clarify. I've heard rumors that the Legislature will try to raise the current level at which an apartment moves out from rent control (aka stabilized) to become market rate. Under present vacancy decontrol, excluding a couple other factors, when the legal rent goes above $2000, the apartment becomes a market-rate apartment. The legislature will probably try to raise the level from the current $2000 to at least $2500. I've heard rumors that the legislature may try to go as high as $3200, in which case the $3220 deposit, which goes essentially into escrow in a public record bank account makes some sense. I don't know all the ins and outs of how these records are kept, but I am guessing that with a rent deposit check for $3220, it would be easier for the landlord to present paperwork to the state alleging that the apartment was rented at $3220.

I'm not a complete expert but I don't know if the paperwork you refer to is applicable to "luxury decontrol" apartments. Under current law, once the "legal rent" goes above $2000 after a vacancy and becomes market rate (again other conditions do apply) I think DHCR stops keeping records on the "legal rent" since essentially ANY rent becomes legal. However, depending on how the legislature attempts to put the genie back in the bottle at some point on decontrol and raises the decontrol rate, the "actual" rent might come into play. I'm guessing that having bank records showing a deposit of $3220 could be useful to a landlord trying to keep an apartment rent decontrolled if and when the law changes. I could be wrong, but I haven't heard any other logical hypothesis on the high deposit request that started this thread.

Hi everyone, This has actually turned into a pretty interesting discussion! I've told the landlord (via e-mail and voice mail) that I'm not comfortable paying the $3,220 deposit, and they haven't gotten back to me yet but hopefully I'll hear today.

Nick, regarding the check--they said they'd accept just one check for both the security deposit and the first month's rent ($1450), so I'm not sure how the paperwork record would end up working out for that.

Bottom line--I'm not going to be paying that big deposit. I like the apartment, but if I have to let it go there are others out there. I'm so glad I talked to you guys!

i've been told that it's illegal for the LL to accept one check...security deposit must be put in an interest bearing account...something doesn't seem right.

This landlord is planning on stealing from you at the end of your lease.

Update:
Finally got a call back from the landlord saying they still "weren't exactly sure" what the security deposit should be. So I withdrew from consideration.

Again, everybody, thanks for your help--I feel saved from a sticky situation. And, in the meantime...I'm looking for a studio (or 1 BR!) $1500 or less for August 1! Let me know if you hear of anything. :)

if you can stretch the rent...The Helena on west 57th street, green bldg. doorman,etc has a studio for $1774. In this market they'll probably negotiate.

What it "should be"? WTF? This is someone trying to take advantage of you. You're SOOOOO right to walk away. You'll find a better place ... and an honest landlord.

best you're moving on - very dodgy on the one check thing.

What is your e-mail address? Might have a lead (from when I rented).

mdasch, my e-mail is laurahazardowen [at] gmail dot com.
Laura

>>Finally got a call back from the landlord saying they still "weren't exactly sure" what the security deposit should be. So I withdrew from consideration.<<

Very savvy move. These guys sounds like complete hacks.