Renting With Bad Credit
Q. In 2010, I lost my full-time job and began freelancing. By 2012, my financial situation worsened and I was unable to make payments on my co-op apartment. To avoid foreclosure, I sold my apartment in 2013. I used the proceeds from the sale to pay off my federal tax lien, leaving me with about $200,000 cash. However, my credit rating is poor because of the mortgage delinquency and at age 43, I am a freelance graphic designer, with no steady income. I have been trying to find a rental apartment, but my sizable savings do not help. Landlords are unwilling to negotiate if I do not have a good credit score and verifiable income 40 times the monthly rent, or a guarantor. My family cannot co-sign and landlords will not accept a sizable cash deposit as an alternative. My options are looking glum. What can I do?
Windsor Terrace, Brooklyn
A. Your story of financial unraveling is a common one. Nearly half of American households do not have enough savings to shield them from financial ruin in the event of a job loss, and 56 percent of Americans have subprime credit, according to theCorporation for Enterprise Development, a nonprofit group. As you have learned, poor credit is an albatross that can affect your chances of finding a home, buying a car and, in some cases, getting a job.
“These situations are common because people don’t know how to plan for the unexpected,” said Alexa von Tobel, founder and chief executive officer ofLearnVest.com, a personal finance website.
Devise a short-term and a long-term plan. In the short term, you need a home. In the long term, you need financial security.
To find an apartment, widen your search area. Look to less desirable locations, like an apartment that is not on a subway line or one that is a far commute from Manhattan. A landlord with a difficult rental might be more willing to overlook a poor credit score, particularly if you have cash. Consider a sublease or a roommate, situations that might involve less stringent credit requirements. It might be hard to move farther afield or double up, but your housing costs might be lower, giving you time to build more savings.
“People around the country would think you’re rich” with $200,000 cash, said Harvey Epstein, director of the community development project at the Urban Justice Center. “But in New York, you’re working poor.”
Next, begin to plan for the long term again. Hire a lawyer who specializes in consumer law to review your credit history and make sure there are no errors harming your credit. Add your name to lists for new affordable housing developments that will be complete several years from now. Provided your credit score has improved by the time your name comes up, you could be eligible. As a freelancer, keep careful records of your income each year, so you can apply for a mortgage down the line or qualify for a more desirable rental. Above all, continue to save for both housing and retirement so you have security and better options as your credit improves.
Dispensing With Window Guards
Q. I live on the second floor of a large, brand-new apartment complex in Manhattan, in a rent-stabilized studio apartment facing a courtyard with no fire escape. My windows have window guards on them, yet I have no children. Can my landlord force me to keep window guards installed on my windows — restricting the windows to openings of just one to two inches — despite the fact that I do not have any children, nor will any children ever be entering my apartment?
Hell’s Kitchen, Manhattan
A. If children do not live in your apartment (or even visit it), I can understand why you would not want unsightly bars covering your windows and limiting your air.
The city law exists because window guards save children’s lives. It requires landlords of buildings with three or more units to install window guards in apartments with children who are 10 years old or younger, or when the tenant requests them. The law does not, however, authorize a landlord to compel a childless tenant to install guards.
So, in theory, you should be able to remove them. But here is where you might run into trouble: Most leases include a provision that requires a tenant to get written permission from the landlord before making any alterations to the apartment, which theoretically includes removing window guards.
Write the landlord a letter requesting permission to remove the guards. If you get a green light, problem solved. If the landlord refuses your request, and you have the stomach for a fight, you could remove them and see what happens. If the landlord sends you a notice to correct the lease violation, you could either put them back in and resolve the dispute or let him take you to court and see how a judge rules.
“The tenant would have a good chance of prevailing by arguing that it is either not an alteration at all” or that it is a trivial lease violation, said David Hershey-Webb, a lawyer who represents tenants.
If a judge sides with the landlord, you would have to reinstall the guards, which would not be a terribly difficult task to accomplish. If the judge sides with you (which is certainly possible) then you would get to keep your window-guard-free view.
Rules Designed for a Board President
Q. The board of directors of my co-op recently changed the bylaws to allow the board president to remain on the board after subletting his apartment and moving to another state. Previously, the bylaws stipulated that board members had to be residents. Although he apparently recused himself from the vote, isn’t a vote by a board that specifically benefits another board member illegal? The board also neglected to inform the shareholders of the board member’s absence and of the bylaws change.
Manhattan Valley, Manhattan
A. I’ve heard of carpetbaggers moving into town to win elections, but never the other way around. As absurd as this new arrangement might seem, it is probably legal.
Most co-op bylaws give the board the power to amend the bylaws with a vote of the board of directors, so long as proper procedure is followed. Surprisingly enough, boards are often not required to inform shareholders of changes to the bylaws (although it is in their best interest to do so in the event that the rule is ever challenged in court).
If you and your fellow shareholders find the new arrangement appalling, bylaws usually include a procedure to call a special meeting of the shareholders. At the meeting, you could propose an amendment to reverse the new rule. The board would have to live with it because a bylaw adopted by the shareholders cannot usually be undone by a vote of the board.
Of course, you could also embrace the democratic process and hold an election. “The quickest and most economical way of reversing this is to vote in a different board and have them reverse the rule,” said Ronald J. Gold, a lawyer who represents condos and co-ops.
You might be able to run a successful campaign. After all, with the president living out of state, he will have a hard time campaigning from afar.