Real Estate Definitions
Before signing your lease for, or buying, an apartment, it's important that you read and understand all of the documents. This helps both you and your landlord or seller, so that there will be no misunderstandings once you've moved in.
Below is a list of common real estate terms that you may encounter during your search for an apartment, or on the lease or mortgage itself. Remember, it's always a good idea to ask questions about the apartment you’re considering if you're uncertain about any of the terms or conditions, or in your search.
If you're looking for the definition of different apartment types, such as Garden Apartment, Junior 4, Classic Six, Convertible 2, Flexible 3, etc. you should refer to our Apartment Size and Type page. If you're looking to decipher all of those abbreviations you see in classified ads, you should check out our exhaustive list of real estate abbreviations.
Common Real Estate Terminology
Addendums - Attached to your lease for an apartment may be any number of addendums. Rental lease addendums are as legally valid as any language found the lease proper, and can cover a huge range of topics, from no-smoking clauses to lock-out fees to roommate regulations to laundry room policies, and so should be read thoroughly, and understood completely before you sign your lease. Addendums on rental leases are also sometimes called riders, or appendices.
Board, or Board of Directors - Because sometimes you'll find rental apartments that are, in fact, sublets within a condo or, less often, a co-op building, it's a good idea to understand the role of a building's Board of Directors. Both condominiums and co-op buildings can have a Board, which is essentially a governing body of fellow condo tenants or co-op shareholders, elected by the other tenants or shareholders. In both case, the Board's duties include overseeing the maintenance, financing, and staffing of, as well as improvements to, such common areas as hallways, storage and laundry facilities, elevators, heating systems, stairwells, lobbies, and the building's exterior.
Board Package - If you're buying or subletting an apartment within a condo or co-op building, you may have to submit a version of a Board Package to the building's Board of Directors. A Board Package details your complete financial history and current worth and earnings, with supporting documentation, and includes your job and salary history, investment portfolios, personal and professional recommendations, tax returns and credit reports, and more. A Board Package is generally more extensive than the screening done by a property manager for a rental building.
Broker Fee - New York City (and a select few other cities) real estate brokers charge a fee for their services in finding you a rental apartment, which usually consists of finding and showing you apartments, and helping with paperwork. Broker's fees are usually around the equivalent of one to two months rent (the range is 10-17% of the entire year's rent), payable when you sign the lease of a regular "fee" apartment.
Condo, or Condominium Apartment - Some apartments for rent (and most apartments for sale) are available in condominium buildings, which often allow owners of condos to sublet their apartment to anyone they want. Because Condo Apartments are discrete pieces of property that, though they are physically part of the building, come with their own deed, are taxed individually, and are wholly owned by an individual, there is no need to go before a Board of Directors to get approval (except in rare cases). Condo apartments for sublet can be found in newly constructed or gut-renovated buildings, including many of those gorgeous contemporary, luxury buildings that popped up all over this past decade.
Condop - Occasionally an apartment for rent can be found as a sublet in a Condop building. The legal definition of a Condop is not simply a co-op that operates under the looser rules of a typical condo (no board interview; owners can sublet without restriction). Rather, a Condop refers to a building that is part residential and part commercial, in which the residential apartments—for example, the one which you may be interested in subletting--are part of a cooperative (with all of the usual pros and cons of co-op subleasing), and the commercial units are sold outright to developers, similar to how a condo works.
Co-op, or Cooperative Apartment - Apartments for rent (and sometimes for sale, depending on the city) are occasionally in Co-op, or Cooperative buildings, which sometimes allow residents to sublet their homes, but not without Board approval. Co-ops dominate the Manhattan apartments-for-sale market; as many as 85% of non-rental homes are found in Co-op buildings (an exception would be if you're looking at new construction, which lately tends to be condos). If you buy a Co-op, you, doesn't actually own the apartment itself, but rather a certain numbers of shares in a corporation that in turn owns the building. Usually the number of shares is determined by the size of the Co-op.
Green Building - A structure that is built using processes that are environmentally responsible and resource-efficient throughout a building's life. This includes the design, site preparation, construction, maintenance and operation, and renovation of the building. It also includes the types and sources of construction materials used. Green buildings may apply for LEED certification.
Guarantor, or Co-signer - If you have a poor credit rating or no current income (because, for example, you are a full-time student), many landlords or property managers of apartments will accept a co-signer, or a guarantor, on a lease. This means that a person other than yourself--the guarantor--becomes responsible for all the terms of your lease if you should not pay your rent, and is legally liable for the entire rent on the apartment, even if you are sharing the space with a roommate. For more information on Guarantors, please see our Bad Credit and Lease Guarantor page.
Housing Court Check - In addition to a credit check—and especially if a credit history is somewhat spotty--many owners and property managers of apartments (particularly in NYC) will also run a Housing Court Check on prospective tenants, at said prospects expense. If you've ever been evicted, sued for unpaid rent or other issues related to the terms of your lease, or sued your landlord over an issue in Housing Court, a housing court check will uncover it. All the report shows is if you have been involved in a case, not if you won or lost. Some landlords consider the fact that you were in housing court as a red flag, regardless of the reason, and regardless of whether or not you won your case.
Lease - New tenants moving into a NY apartment must sign a Lease with the property's landlord. A NYC rental apartment Lease is a legal contract between yourself and your landlord which states that both parties agree to the terms of the property, including the amount of the monthly rent, regulations on pets, roommates, security deposit and such, as well as a fixed length of time for which you agree to the terms. The standard New York City lease is usually for 12 or 24 months.
LEED Certified - For an apartment building to be officially declared LEED certified—and therefore also referred to as a green building--it must be designed, constructed and maintained in accordance with the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. The LEED standards, which are far tougher to meet than most cities standard building code for safety, engineering soundness and energy efficiency, were developed by the United States Green Building Council, and have since been adopted by more than 14,000 construction projects in the U.S. and 30 other countries worldwide.
Lessee - In a legal contract setting down terms of tenancy between a tenant and a landlord, the tenant is the Lessee, and the landlord the Lessor.
Lessor - In a legal contract setting down terms of tenancy between a landlord and a tenant, the landlord is the Lessor, and the tenant is the Lessee.
Letter of Employment - When looking for an apartment in NY, you should have all of your paperwork ready, so when you see your dream home you can take immediate action. Most landlords or property managers require a Letter of Employment One, a signed (and, better yet, notarized) note on your employer's letterhead that states your current salary, current length of employment, and the prospects for keeping your job in the near future.
Luxury Apartment - While not a legal term, a luxury apartment generally refers to a home within a building that either offers an unusually opulent array of amenities and services--health club, swimming pool, playroom, parking garage, roof deck, etc.—and/or, especially in luxury pre-war co-ops, a 24-hour staff and grand individual apartments with top-of-the-line finishes. For more information, see our page on Luxury Apartments.
Pre-war - Apartments in NYC (and sometimes other cities) are often divided into two categories, those that are in "pre-war" buildings, and those that are not. At its most basic level, a building that is called pre-war was built prior to the Second World War, but the label also implies a certain style: made from brick and stone with decorative details on the outside, and high ceilings, solid plaster and lath walls (not sheet rock), and often with details such as sunken living rooms, crown molding, picture-frame molding on the walls, archways, wall sconces, and more within.
Pressurized Wall - The interior layouts of New York City apartments are commonly reconfigured using pressurized walls. These temporary walls can be erected within an apartment using only sheet rock screws attaching a pressurized wall to floor, ceiling, and permanent wall studs, maximizing stability while minimizing structural or architectural damage. These walls can be removed at any time, returning the apartment to it's original layout and condition. Pressurized walls are most commonly used to create an additional small bedroom in the apartment.
Prime Lease - This is also know as a market rate lease. Basically, the the rental price for the apartment was agreed upon by the lessor and lessee, and was a function of supply and demand, e.g. market conditions. This is in contrast to a rent stabilized lease.
Rent Control - Rent control exists in many cities. Implemented in New York City in 1943 as a consumer protection act, to help ensure that soldiers returning from World War II would be able to afford a place to live, even as demand for rental apartments exceeded supply, Rent Control limits the amount a landlord can charge for rent--both at the initial lease signing as well as in subsequent renewals--and also regulates the services a landlord must provide. The law has changed over the years... today the only NYC rental apartments that qualify for Rent Control are those that have been continuously occupied since 1971. If a Rent Controlled NYC apartment is vacated, in most cases the unit becomes Rent Stabilized (see below). Rental apartments become completely de-regulated, and the landlord may charge market price, if the regulated rent exceeds $2,700 and an apartment is vacated, or if the lessee's household income rises above $175,000. Other cities have similar rent control/rent stabilization rules.
Rent Stabilization - More than one million NYC rental apartments are considered to be Rent Stabilized, which means that the landlord may only raise the rent with each one- or two-year lease renewal by a certain percentage, dictated each year by city government after negotiations between tenants groups and the Rent Stabilization Board. Tenants in Rent Stabilized apartments also enjoy an automatic lease renewal option, and must be allowed to continue to live in their home unless the landlord can show cause that the tenant has violated the terms of the lease. Rules in other cities may vary.
Renters Insurance - Insurance that covers the value of the property within your rental apartment--your furniture, jewelry, art, clothing, etc., etc.,--rather than the piece of property itself, which the landlord owns and, presumably, insures. Some landlords may require that the tenant purchases renters insurance, however most do not. For more information, see our page on Renter's Insurance.
Security Deposit - The vast majority of apartments for rent require that tenants put down a security deposit—ranging from just a couple of hundred dollars, to two months rent—to be held by the landlord for the entire time the lessee lives in the apartment. By law in most areas, the landlord generally holds the security deposit in a savings account, and gives any interest earned on the deposit to the tenant on an annual basis. The landlord can use the security deposit to repair any extraordinary damage within the rental apartment once the tenant moves out. If there is nothing beyond normal wear and tear at the time of the tenant's departure, the landlord returns the entire security deposit. Contrary to popular belief, by law a security deposit is not to be used as the last month's rent (although some landlords may informally agree to do so).
Sublet - Fairly common in many cities is the subleased rental apartment, or sublet. A sublet apartment rental means that the original holder of the lease from the landlord offers the apartment--or, subleases the apartment--to a third party. The original lease holder is still responsible for monthly rental payments to the landlord. Sublet rental apartments are sometimes offered for a shorter duration--for six months, for example, or for the summer--than the standard one- or two-year rentals. For more information, see our page on Sublets.
Super, or Superintendent - A New York City's building superintendent—most commonly known as the building's super—is the first point of contact for a tenant needing or requesting any sort of maintenance or repairs, either within an individual apartment or in a building's common areas. In larger buildings, the super manages a staff of individuals, and is expected to handle minor issues on the spot, and to contract and supervise the work of outside vendors for larger or more specialized repairs or services. In a small building, you may know your Super personally. In larger buildings, you may only interact with the managing office employees, and rarely meet the Super or his staff.
Walk-up - An apartment for rent in a "walk-up" simply means that building doesn't have an elevator, and so you'll have to walk up stairs to get to your home. While laws can vary by jurisdiction, the vast majority of walk-up buildings are five stories high or less. In NYC, a walk-up building cannot exceed 6 stories. Although most walk-ups in NYC are only 5 stories tall, we have seen a few that are grandfathered in with 7 stories!
See any we missed? Please let us know.
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