Rent Coach: Bad credit blues, roommate swap out
Q. I have a great job and a steady income, but nobody will rent to me! I made careless financial decisions straight out of college and am still paying for them. Am I doomed to live with my parents for years until my credit score is back up?
A. There are several options when your credit score makes renting an apartment in the city difficult. First, consider using a guarantor. A guarantor signs a contract to agree to be financially responsible for the apartment should you default on your obligation to pay rent. The guarantor will need to qualify as well, often by having an annual salary equal to at least 80 times the monthly rent of your apartment, having good credit, and having sufficient liquid assets. Sometimes landlords require that they be based in the Tri-State area.
You might also consider offering to pay the landlord a larger security deposit. Depending on other details in your application such as your annual income and assets, you should expect to pay anywhere from 3-6 months in security should the landlord be willing to go this route. Lastly, consider looking outside of Manhattan where the qualification standards are often more lenient or sharing an apartment with a roommate who has already qualified with the landlord and is willing to allow you to move in.
Q. My lease doesn’t end until eight months from now, but I need to move much sooner than that and won’t be coming back. Can I find another tenant to take over my lease with the landlord?
A. Maybe. This called an assignment and if your landlord fails to respond to your request or denies it “unreasonably” or without any reason at all, you have the right to cancel the lease within 30 days from the date you requested to assign it.
Make sure you make your request in writing and provide an application for the new tenant. The landlord is permitted to deny your request if they have a “reasonable” reason, such as the proposed tenant having bad credit or insufficient income. Speak to the landlord or the managing agent before submitting your written request to ask what application materials they will require.
You might consider hiring a broker to locate the replacement tenant. A good one should be able to offer your apartment to a wider pool of applicants than you can and they will be better at qualifying the prospective tenant and presenting the application to your landlord to ensure that it’s approved. In Manhattan, you can typically expect the new tenant to pay the broker’s fee.
However, lease assignments can be difficult given that exact procedures must be followed to maintain your rights and that the definition of “reasonable” is not always agreed upon. You may want to consider speaking to an attorney before making any decisions and if your landlord agrees to release you from the lease, make sure you get it in writing.
Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. Rent Coach also appears in AM New York's Thursday real estate section.
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