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Real Estate


I WAS FLOORED BY $21K IN FEES TO RENT A ONE-BED NYC APARTMENT — IS THIS LEGAL?

By Brooke Kato and Mary K. Jacob

August 16, 2023 | 3:45pm

Piper Phillips thought she won the treasure hunt for a coveted one-bedroom
apartment in Manhattan. 


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Then she was hit with jaw-dropping additional costs totaling more than $10,000 —
which would have brought her initial payout, including security and first
month’s rent, to a whopping $21,507.50.

The Midtown condo asked Phillips to cough up thousands in fees — not including
the monthly rent — such as a $550 application fee, $1,500 administration fee,
$1,500 “move-in” fee and a one-month broker’s commission.

The Chicago native couldn’t believe the “ridiculous” hidden costs associated
with the already pricey listing, which would have run her a whopping $5,350 per
month.

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The fees were even described as “well above the norm” by one real estate expert
interviewed by The Post.

“That one was the craziest one I’ve ever seen,” Phillips told The Post, noting
that the apartment’s hefty price tag was already at the top of her and her
boyfriend’s budget.

They didn’t sign on the dotted line

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However, the sticker-shocked marketing director revealed the building’s
additional fees on TikTok, posting a screenshot of the broker’s email, which she
said made her “laugh out loud.”

Piper Phillips was shocked to encounter additional costs totaling more than
$10,000 when she went apartment-hunting.NY Post illustration Last year, Phillips
moved into a one-bedroom flex apartment in NYC with her roommate and
boyfriend.Instagram/Piper Phillips

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Piper’s apartment hunting woes come amid record-high rent hikes, and the average
one-bedroom listed for $4,366.NY Post

While the luxury apartment promised an in-unit washer and dryer — a far-fetched
dream for many New Yorkers — it was too good to be true.

In addition to requiring tenants to earn 50 times the monthly rent, the landlord
demanded a slew of additional costs: a $550 application fee, $1,500
administrative fee, $350 annual amenity fee, $150 credit check, $1,500 “move-in”
fee, $100 “single initiation fee,” $1,000 move-in deposit and $55 digital
submission fee.

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While Phillips didn’t specify whether she would need a security deposit, it’s
standard practice for renters to provide a first month’s worth of rent and a
deposit of the same value — and sometimes even cough up the last month’s rent,
too.

> @pipercassidyphillips
> 
> Do u want my first born child at this point #nyc #nycapartment #manhattan
> #apartmenthunting #bffr #bestcity #newyork #greenscreen
> 
> ♬ original sound – Piper Phillips

Even the broker acknowledged the “high” building fees, advising Phillips to
negotiate with the property owner when submitting an application.

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“How is that legal?” Phillips exclaimed in the TikTok video, which scored over
385,000 views.

The Post has reached out to the broker for comment.

To top it off, tenants would be required to pay an additional 5% of those
building fees for “app admin,” excluding the submission and initiation costs.

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“They don’t even tell you what it means,” she exclaimed of the “crazy” fees. “It
doesn’t make any sense.”

She’s hoping to move into a one-bedroom with her boyfriend later this
month.@pipercassidyphillips/instagram

Then, there’s the broker’s fee — which “feels a little wrong” to pay, admitted
Phillips, who stumbled upon the listing on Street Easy.

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“I have so much respect for people in the real estate industry, but it confuses
me why there are so many fees … when I’m doing hours of manual labor searching
for the unit,” she said.

It turns out the fees faced by Phillips “are well above the norm,” according to
one NYC real estate expert.

“We typically see application fees associated with renting a condo unit in NYC
ranging between $1200-$1500. Per the Housing Stability and Tenant Protection Act
of 2019, credit fees are capped at $20 per applicant,” Hal D. Gavzie, executive
vice president of residential easing at Douglas Elliman, told The Post.
“However, due to the HSTPA legislation of 2019, we may see landlords offsetting
restrictions by adding other administrative fees. The broker fee can range from
zero to 15% of annual rent.” 

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Phillips said she uses Street Easy to find available apartments in the
area.Instagram/Piper Phillips Phillips called the additional fees
“crazy.”@piperphillips/instagram

One high-profile broker, who declined to be quoted on the record, told The Post
that the add-on money grabs likely aren’t broker fees but, rather, condo fees.

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The reason: They want buyers, not renters, and try to discourage the latter. 

All fees, then, would go to the building directly — and not to the brokers.

“The way to avoid this is to rent in a building that is designed for renters
rather than a condo or a co-op,” the source told The Post. “Because each of
those boards has the right to make up their own rules about renting in their
building.”

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The industry insider summed up the situation thusly: “These buildings are
designed to be bought. Find another building — they don’t want ya!”

As if apartment-hunting wasn’t difficult enough.

Phillips said that sites such as Street Easy can “catfish” tenants since the
listings may utilize images taken years ago and, in reality, may actually be
run-down.Getty Images/iStockphoto

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After spending the last year in a one-bedroom flex unit with her roommate and
her boyfriend, Phillips began her search for a new place but was met with
lackluster listings.

“The thing about Street Easy is, they kind of catfish you,” she explained,
adding that the units don’t always live up to their photos online.

She’s toured run-down units in desperate need of renovation, which she claimed
are a far cry from the images available online. But seeing the properties in
person is like a “full-time job,” according to Phillips, who already often works
11-hour days at her job.

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Now, she filters her Street Easy results by “no fees” and has her fingers
crossed that she’ll find a new home before her current lease is up at the end of
August.

What do you think? Post a comment.

Her apartment hunting woes come amid record-high rent hikes last month, and the
average one-bedroom listed for $4,366.

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“It’s hard because the power dynamic is really uneven,” Phillips said of
Manhattan’s real estate market.

“The landlords and the management building know that the demand for these places
is really high again, so it feels like they know that they kind of have the
upper hand oftentimes.”


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Filed under apartments ,  real esate ,  rent ,  rentals ,  TikTok ,  8/16/23
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