Piper Phillips thought she had struck gold when she found a desirable one-bedroom apartment in Manhattan. However, her excitement quickly turned into disbelief when she discovered the jaw-dropping additional costs associated with the rental, totaling over $10,000. This would have brought her initial payout, including security and first month’s rent, to a staggering $21,507.50. The Midtown condo demanded various fees on top of 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. These fees were deemed “well above the norm” by a real estate expert interviewed by The Post.
Phillips, a Chicago native, was shocked by the exorbitant hidden costs tied to the already expensive listing, which would have amounted to $5,350 per month. She deemed it “ridiculous” and considered it the craziest case she had ever encountered. With the apartment already stretching her and her boyfriend’s budget, they made the decision not to sign the lease.
Nevertheless, Phillips took to TikTok to share her sticker-shock experience, posting a screenshot of the broker’s email, which she found amusing. Her video garnered over 385,000 views. Phillips’ apartment hunting ordeal occurred during a time of record-high rent hikes, with the average one-bedroom apartment listed for $4,366.
The luxury apartment that enticed Phillips with its promise of an in-unit washer and dryer turned out to be too good to be true. Besides the requirement of tenants having an income 50 times the monthly rent, the landlord imposed several additional costs, including a $550 application fee, $1,500 administrative fee, $350 annual amenity fee, $150 credit check fee, $1,500 “move-in” fee, $100 “single initiation fee,” $1,000 move-in deposit, and a $55 digital submission fee. Although Phillips did not specify whether a security deposit was also necessary, it is customary for renters to provide a first month’s rent and a deposit of equal value, sometimes even requiring payment for the last month’s rent upfront. Additionally, tenants would be responsible for an extra 5% of the building fees for “app admin,” excluding submission and initiation costs. Phillips found these fees absurd, lacking transparency and logic.
Among the fees, the broker’s fee stood out as particularly questionable to Phillips. Despite having respect for professionals in the real estate industry, she found it confusing why multiple fees were imposed when she had spent hours searching for the unit herself. She referred to the fees as “a little wrong.” Real estate expert Hal D. Gavzie explained that while application fees in NYC typically range from $1,200 to $1,500 for renting a condo unit, credit fees are capped at $20 as per the Housing Stability and Tenant Protection Act of 2019. However, landlords may offset restrictions by adding other administrative fees. Broker fees can range from zero to 15% of the annual rent.
One prominent broker suggested that these add-on costs likely originate from the condo rather than the brokers themselves. The reasoning behind this is that the buildings aim to attract buyers rather than renters, thus trying to discourage the latter. As a result, all fees go directly to the building and not to the brokers. They advised potential renters to choose buildings specifically designed for renting, as the rules regarding rentals within condos or co-ops can be arbitrary.
Apartment hunting is already a challenging task, and Phillips found that online platforms like Street Easy can be misleading. Listings often feature outdated images that do not represent the current condition of the unit accurately. Phillips had visited run-down units that required significant renovations, which were far from what was advertised online. Viewing these properties in person became a full-time job for her, adding to her already demanding 11-hour workdays. As a result, she now filters her Street Easy results to exclude properties with additional fees and hopes to find a new home before her current lease expires at the end of August.
The real estate market in Manhattan presents unique challenges, with landlords and management companies aware of the high demand for properties. This unequal power dynamic often leaves renters feeling at a disadvantage and subject to exorbitant fees.
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