Small Landlord's Guide

Chapter 1: Tenant Qualification

1.1 Income and Credit Requirements

Tenant must earn at least 40 times the monthly rent and have a credit score of 700 or higher. If a guarantor is needed, they must earn 80 times the monthly rent and also have a credit score of at least 700.

1.2 Lease Under LLC

If the lease is under an LLC, a qualifying individual must act as the guarantor.

1.3 Document Checklist

Collect the following from tenants:

Two recent bank statements
Tax returns for the past two years
Employment verification letter with salary details
Government-issued ID

1.4 Credit Checks

Always run credit checks directly. Avoid relying solely on third-party programs like Insurent or The Guarantors, as they carry some risk.

1.5 Responsibility

Landlords should independently verify tenant credentials and not rely solely on condo or coop building approvals.

Chapter 2: Apartment Turnover

2.1 Repairs and Maintenance

Allow adequate time for necessary repairs before turnover. Clearly document and agree on responsibilities for repairs or updates with tenants.

2.2 Condition Standards

Apartments should be in "as-is" condition: broom-clean with working appliances and HVAC. Tenants generally expect apartments to be freshly painted and thoroughly cleaned.

2.3 Painting Guidelines

Avoid touch-ups older than a few months as they are often noticeable. Repaint entire walls when needed. Deliver apartments in white paint for easy re-painting. Tenants can customize but must restore to white upon moving out.

2.4 Documentation

Record the apartment’s condition at turnover, including photos.

2.5 Flooring

Opt for lighter-colored finishes to minimize visible wear over time.

2.6 Technology and Finishes

Avoid installing high-tech or delicate finishes that may require frequent maintenance.

Chapter 3: Security Deposit Management

3.1 Limits and Rules

Security deposits are capped at one month’s rent. Separate pet deposits are not allowed. Deposits do not need to accrue interest unless the landlord owns six or more units in the same building.

3.2 Deposit Usage

Deposits cannot be used for the last month’s rent and should only cover damages or unpaid rent.

3.3 Return Timeline

Return security deposits within 14 days of the tenant vacating. Failure to comply forfeits the right to deduct for damages.

3.4 Pre-Move-Out Inspection

Tenants can request an inspection to address potential issues before vacating.

Chapter 4: Non-Renewals and Rent Increases

4.1 Notice Periods

For non-renewals or rent increases over 5%, notice periods depend on lease duration:

Less than 1 year: 30 days
1–2 years: 60 days
More than 2 years: 90 days

Missing these deadlines delays the notice period.

Chapter 5: Lease Breaks and Mitigation

5.1 Duty to Mitigate

Landlords must make a genuine effort to re-lease the property at market or current rent if a tenant breaks the lease. Advertising the property at a higher rate breaches this duty.

5.2 Outgoing Tenant Obligations

Outgoing tenants may be asked to cover broker fees or turnover expenses, but negotiation before move-out is recommended.

Chapter 6: Condo and Coop Rentals

6.1 Approval Timeline

Condo applications may take 20–30 days, while coops may take longer due to potential board interviews.

6.2 Fees and Delays

Tenants may pay board application fees, but landlords should inform tenants of possible delays in lease start dates due to board approval.

6.3 Lease Renewals

Condo leases often require minor renewal processes, while coops may deny renewals or terminate leases mid-term for tenant violations.

6.4 Managing Agents

Maintain professionalism with managing agents to facilitate smooth processing.

Chapter 7: Townhouse Rentals

7.1 Tenant Responsibilities

Clearly outline tenant responsibilities for property maintenance in the lease.

7.2 Utility Payments

Landlords should ensure utilities are in the tenant's name where possible.

7.3 Repair Plans

Have plans in place for handling routine and emergency repairs.

Chapter 8: Section 8 and Vouchers

8.1 Communication

Accept all legal vouchers. Respond promptly to inquiries: “Yes, we gladly accept vouchers! When would you like to see the apartment?”

8.2 Voucher Types

Visit: https://www.nyc.gov/site/hpd/services-and-information/section-8-voucher-types.page

Chapter 9: Good Cause Eviction

9.1 Applicability

Good Cause Eviction laws limit rent increases in free-market apartments but do not apply to:

Condos, coops, or high-value rentals above specified thresholds
Apartments the owner ceases renting
Non-payment, lease violations, or illegal activity

9.2 Exemptions

Owners with fewer than 10 units in New York State are exempt.

Bonus Tips for Smooth Transactions

Lease Agreements: Use comprehensive lease forms like those from REBNY to comply with New York State laws.
Payments at Signing: Collect the first month’s rent and security deposit at lease signing.
Legal Riders: Use an attorney to draft lease riders to minimize liability.
Tenant Screening: Perform thorough due diligence as New York housing laws heavily favor tenants.

By following these guidelines, landlords can streamline leasing transactions, protect their investments, and foster positive tenant relationships.