Asked and Answered
My closing is in December, but the lease for my apartment does not expire until the following March. What do I do with my lease?I get this type of question frequently and the answer depends on the particulars of your lease, market conditions, the reasonableness of your landlord and a host of other factors.
Regulated Leases
If you happen to be fortunate enough to have had a rent stabilized or rent controlled lease, and your monthly rent is sufficiently below market, in most cases, your landlord will be eager to get the apartment back so that he or she can impose a vacancy increase on the new tenant. The more notice you can give your landlord relative to your plans, the easier it may be to terminate the lease. If you’re buying a co-op and have to wait for Board approval, notifying your landlord that you intend to leave is geometrically more complicated, particularly if you are subsequently turned down by the Board after you have given notice.
Market Rents
If you are renting from an individual condo owner or have an unregulated lease, your landlord may not be thrilled about the prospect of re-letting the apartment. Most leases will not allow the tenant to break the lease. In those cases where the tenant can terminate the lease, there is usually a fee charged for the privilege of terminating the lease and the tenant will still be responsible for paying the rent until a new tenant is identified and a new lease begins. As the rental market appears to be improving at the moment, locating a new tenant may not take as long as it would have a year ago. If you know you’re leaving, the sooner you start the search for your replacement, the better.
The Sublease Option
Tenants in New York in buildings with 4 or more residential units, have the legal right to sublet pursuant to the provisions of Section 226-b the Real Property Law of New York. Finding a subtenant for the balance of the lease requires the consent and cooperation of your landlord. That being said, as the law provides, a landlord cannot unreasonably withhold consent to a sublet request that otherwise satisfies the requirements of the statute. Since you remain liable for the rent while your subtenant is in occupancy, it is important to find a financially appropriate subtenant, with a good credit score and positive references. A bad subtenant is as much your problem as it is for the landlord. Taking the liability issues into consideration, it probably makes more sense to find someone to take over the lease, so that you can exit the situation without any continuing responsibility. Whether that person can be identified within your time schedule and whether that person will be acceptable to the landlord, are more complicated questions.
Adding a “Roommate”
Pursuant to Section 235-f of the Real Property Law of New York, as long as the tenant is occupying the apartment as his or her primary residence, a tenant is permitted to have an additional occupant in the apartment without the consent of the landlord. Sometimes folks will attempt to add a roommate, even though they are leaving the apartment for their co-op or condo. Creating the fiction of a roommate has its own concerns, as someone who has no liability to the landlord will be occupying the apartment, while you go on to your new home. In essence, you are allowing a squatter to occupy the apartment for the balance of the lease term and you will be liable for the actions or omissions of that person, including his or her refusal to leave the apartment when your lease expires. If you know the person or if it’s a family member, allowing someone to ride out your lease can work. That being said, whenever you knowingly breach your lease, there can always be unintended and costly consequences. From a lawyer’s prospective, I think it’s a horrible idea and should not be done…period.
What if the Closing is Scheduled After the Expiration of the Lease?
It’s fair to say that scheduling the closing around the expiration of a lease, is one of the great anxiety generators of the closing process. Sometimes the landlord has flexibility and sometimes not. No one wants to face the possibility of putting stuff in storage and sleeping on a sibling’s couch or in a hotel, but it happens. Simply stated, the expiration date of a lease has to be factored into the process when you decide to buy an apartment. There are many parties involved in a closing and getting everyone to go along with your personal logistics is always a challenge.
Residential Reality: Give Yourself a Month and Chill
Co-op and condo purchasers abhor the possibility of having to pay rent after the closing takes place. When parties attempt to dovetail a closing with the expiration of a lease, it almost always does not work out. Since folks usually paint or do the floors before moving in, having an extra month or so to ready the apartment is a much more reasonable approach. Applying the "Twenty Year Rule", picking up an additional month rent doesn’t mean much over the long haul. The co-op and condo process is not designed for deadlines. Bear that in mind as you start the process of finding your new home.
