Property Management: What the NY Real Estate Exam Tests

Property management questions cover lease types, the landlord-tenant relationship, security deposits, and NY-specific rules like rent stabilization.

Expect 3-4 questions. Lease types and security deposit rules are the most common topics.

Types of Leases

A gross lease means the tenant pays a flat rent and the landlord pays operating expenses. A net lease means the tenant pays rent plus some or all operating expenses (taxes, insurance, maintenance). A percentage lease adds a percentage of the tenant's gross sales to the base rent, common in retail.

Security Deposits in NY

In New York, landlords must hold security deposits in a separate interest-bearing account at a NY banking institution. The landlord must return the deposit within 14 days of lease termination, with an itemized statement of any deductions.

Eviction Process

In NY, eviction requires a court proceeding. A landlord cannot use self-help eviction (changing locks, removing belongings). The process starts with a notice (pay or quit, cure or quit, or unconditional quit), followed by a court petition if the tenant does not comply.

Rent Stabilization

Rent-stabilized apartments are subject to limits on how much rent can increase each year, set by the Rent Guidelines Board. Tenants have the right to lease renewal. Stabilization generally applies to buildings with six or more units built before 1974 in NYC.

Sample Exam Questions

Lease Types

1. In a triple net (NNN) commercial lease, the tenant pays:

ABase rent only. The landlord pays all expenses
BBase rent plus utilities only
CBase rent plus property taxes only
Base rent plus property taxes, insurance, and maintenance

NNN (triple net) leases require the tenant to pay all three 'nets', property taxes, insurance, and maintenance costs in addition to base rent. The landlord's net income is very predictable.

Security Deposits

2. Under the NY Housing Stability and Tenant Protection Act (HSTPA) of 2019, the maximum security deposit for most residential rentals is:

AFirst and last month's rent
BTwo months' rent
One month's rent
DThree months' rent

The HSTPA of 2019 capped security deposits at one month's rent for most non-rent-stabilized residential apartments in New York State.

Eviction

3. A landlord changes the locks on a tenant's apartment after the tenant falls two months behind on rent, without going to court. This is:

AA permissible immediate eviction for non-payment
A self-help eviction, which is illegal in New York
CLegal if the lease includes a lock-out clause
DLegal after 30 days of non-payment

Self-help evictions, changing locks, removing belongings, shutting off utilities, are illegal in New York regardless of circumstances. The landlord must pursue formal eviction proceedings in Housing Court.

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Key Terms to Know

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