Q. Yesterday I met with my broker to sign the lease on an apartment in the West Village. I gave her certified checks for the first month’s rent, security deposit, and the broker’s fee. The landlord wasn’t there to counter-sign the leases but insisted I hand over the checks nonetheless. I’m now concerned because I have turned over roughly $20,000 in certified checks and don’t have a signed lease to show for it. The landlord’s broker promised that we will receive the leases back in a day or two. Should I be concerned?
A. It is not uncommon for lease signings to occur without the landlord present. However, in the case of a small landlord, your broker would ideally hold the original certified checks in her possession until the leases have been countersigned.
In the interim, she should let the landlord know that she has the originals and provide him with copies. Once the landlord has countersigned the leases, she can deliver the original rent and security deposit checks in exchange for the fully-executed lease.
Large management companies commonly insist that brokers turn over original certified checks while awaiting a countersignature. You will need to comply with those procedures if you wish to rent there. However, some comfort can be taken from the fact that a large landlord or agent is generally not in the business of absconding with rent deposit checks, and from the fact that the checks can be tracked down and identified if there is an issue.
In the case of a condominium or co-op rental, your broker should hold the original certified checks until the board has issued their waiver of their right of first refusal (in a condo) or approved you (in a co-op). Copies of the checks should be provided to the listing broker.
Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. He is also the publisher of the Greenwich Village blog VillageConfidential.
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