'Asked to pay $21,000 fees to rent one-bedroom apartment, it should be illegal'
A woman was flabbergasted when she was told she had to pay over $21k to rent an apartment.
Piper Phillips believed she was lucky to have found a coveted apartment in Manhattan, New York. But to her surprise, she faced unexpected additional costs exceeding $10,000, bringing her initial payment to a staggering $21,507.50, apart from monthly rent.
The apartment, which seemed attractive, came with excessive fees, such as application, administration, move-in, and broker's commission fees. Piper shared her disbelief on TikTok, revealing the building's hidden costs.
These costs included charges like a $550 application fee, a $1,500 administration fee, and a $1,500 "move-in" fee. The luxury apartment also demanded a minimum income requirement and various other fees, including an annual amenity fee and digital submission fee.
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The apartment came with huge add-on fees (pipercassidyphillips/TikTok)
Piper was left stunned by the extra fees (pipercassidyphillips/TikTok)Piper told the New York Post: "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 labour searching for the unit."
The additional charges for the apartment were deemed unusually high by experts. The situation even raised questions about the legality and transparency of such fees. Additionally, there was a broker's fee, adding to Piper's frustration, especially given the effort she put into searching for suitable units.
A real estate expert highlighted that the fees exceeded norms, possibly due to recent legislation. Hal D. Gavzie, executive vice president of residential leasing at Douglas Elliman, explained: "We typically see application fees associated with renting a condo unit in NYC ranging between $1200-$1500.
'It confuses me why there are so many fees,' Piper said (pipercassidyphillips/TikTok)
One of the fees included application administration (pipercassidyphillips/TikTok)"Per the Housing Stability and Tenant Protection Act of 2019, credit fees are capped at $20 per applicant. 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."
Some suggested that these charges were intended to deter renters and favour buyers. A source said: "The way to avoid this is to rent in a building that is designed for renters rather than a condo or a co-op. Because each of those boards has the right to make up their own rules about renting in their building. The industry insider summed up the situation thusly: “These buildings are designed to be bought. Find another building — they don’t want ya!"
Piper's apartment search continued amidst challenging market dynamics, with record-high rent hikes and limited options. She highlighted the imbalance of power between landlords and renters in Manhattan's real estate market.
Piper said: "It’s hard because the power dynamic is really uneven. 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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