Guides / Glossary: NYC renting and buying terms explained

Glossary of New York renting and buying terms

The words you'll meet renting or buying in New York City and the Hamptons, in plain English. Where a term is a legal or tax rule, it links to the official source; where it's only a landlord's, building's or lender's habit, it says so. Each term links to the tool or guide where it matters.

Last checked 21 October 2026. This is general information, not legal or tax advice.

Renting

Gross rent: The monthly rent written in the lease: what you pay in every month that isn't free. Landlords usually base the security deposit, the income test and any renewal on it. Net effective rent calculator.
Net effective rent: The gross rent with any free months spread over the whole lease. $4,000 a month on a 12-month lease with one month free is $44,000 a year, or about $3,667 a month net effective. It's useful for comparing, but it isn't what you pay most months. Convert either way.
Concession: Something a landlord gives to get a lease signed, usually free months. It normally ends with the lease, so a renewal is priced from the gross rent. More in the renting guide.
The 40× rule: A common New York screening test: yearly income of at least 40 times the monthly rent. It's landlord practice, not law, and buildings vary. See what rent you qualify for.
Guarantor: Someone who signs to pay the rent if you don't. Landlords commonly ask a guarantor to earn about 80 times the monthly rent; that's practice, not law. Rent qualifier.
Guarantor company: A business that acts as your guarantor for a fee. The landlord decides whether to accept one; read what you'd owe if the company ever pays.
Security deposit: Money a landlord holds against unpaid rent or damage. In New York State it can't be more than one month's rent, and it must come back within 14 days of moving out, with an itemised statement of any deductions (GOL §7-108).
Application and screening fees: A New York landlord can't charge you to apply. The only fee allowed is for a background and credit check: its actual cost or $20, whichever is less, waived if you bring a check from the last 30 days (RPL §238-a).
Rent stabilisation: New York City's main rent regulation, covering about a million apartments: rents rise only by what the Rent Guidelines Board sets each year, and tenants can renew (NYC RGB). How to check.
Preferential rent: A stabilised rent below the legal regulated rent. A tenant paying one on or after 14 June 2019 keeps it until they move out (HCR Fact Sheet #40). More.
FARE Act: New York City's broker-fee law, in force since 11 June 2025. A broker working for the landlord, including the listing agent, can't charge the tenant; listings must show every fee; and you get an itemised fee list to sign before the lease (NYC DCWP). Renting fees guide.

Co-ops, condos and boards

Co-op: A building owned by a corporation. You buy shares in it and get a proprietary lease for your apartment, and the board must approve you. Check a co-op board's ratios.
Proprietary lease: The lease a co-op gives each shareholder: the right to live in the apartment, and the house rules.
Condo: An apartment you own outright as real property, with a share of the common areas and your own deed. Buying one usually involves title insurance and, with a mortgage, the mortgage recording tax.
Condop: A building divided into condominium units in which the homes are held as a co-op, often with separately owned shops. The rules mix the two; your attorney checks which apply.
Maintenance: A co-op's monthly charge, covering the building's running costs, property taxes and any underlying mortgage.
Common charges: A condo's monthly charge for running the building. Property tax is separate: each condo unit usually has its own tax bill.
Board package: The application a co-op, and many condos, ask a buyer or renter to submit: usually a financial statement, tax returns, bank statements and references. Each building sets its own list, and a co-op often adds an interview.
Post-closing liquidity: The cash and easily sold assets you'd have left after closing. Co-op boards often ask for enough to cover a number of months of mortgage and maintenance; the figure is the building's own. Affordability and board ratios.
Right of first refusal: A condo board's right, under its bylaws, to buy a unit on the same terms instead of you. Boards usually waive it; you need the waiver letter before closing.
Flip tax: A fee some co-ops charge when an apartment is sold, set by the building: a percentage of the price or the profit, or an amount per share. The seller usually pays. Net proceeds of a sale.
Working capital contribution: A one-off payment into a building's reserves that some condos, especially new developments, ask buyers to make at closing. It appears in the closing-cost estimate.
Recognition agreement and lien search: With a co-op loan, the co-op, lender and buyer sign an agreement recognising the lender's claim on your shares. A lien search on the shares replaces a title search.

Contracts and closing

Contract deposit: The money paid when the contract is signed, typically 10% of the price in New York and counted towards the down payment. It's held in escrow; the contract must name the escrow agent and bank, and the money must be kept separate (GBL §778-A).
Down payment: The part of the price you pay from your own money rather than borrow. Co-ops often set a minimum. Cash needed to buy.
Closing costs: Everything you pay to complete a purchase on top of the down payment: taxes, lender and title charges, attorney fees and building fees. Every line, itemised; the guide.
Property condition disclosure: For a one- to four-family house, the seller must give the buyer a signed statement of the property's condition, including flood questions, before the contract is signed. It doesn't apply to co-ops or condos (RPL §462).
Title insurance: Insurance against hidden problems with the legal title, such as forgery, unpaid taxes or liens. The lender's policy covers the loan and the owner's policy covers the price; the buyer generally pays for both, and rates are approved by the state (NY DFS).
Escrow: Money held by a third party. At contract, your deposit sits in escrow; with a mortgage, an escrow account collects part of each payment for property taxes and insurance (CFPB).
Flood zone (Special Flood Hazard Area): An area FEMA maps as high-risk for flooding. A building there with a federally backed or regulated mortgage must carry flood insurance (FEMA).

Taxes on a purchase

Mansion tax: A New York State tax paid by the buyer of a home costing $1 million or more: 1% of the whole price. In New York City a supplemental tax raises the combined rate in steps from $2 million, up to 3.9% at $25 million and above (NY Tax Department). Closing costs.
New York State transfer tax: 0.4% of the price ($2 for each $500), paid by the seller. In New York City an additional 0.25% applies to homes of $3 million or more (NY Tax Department). Selling costs.
RPTT (NYC transfer tax): New York City's Real Property Transfer Tax: 1% of the price up to $500,000 and 1.425% above, for a house, condo unit or co-op apartment (NYC Finance). In a resale the seller usually pays it.
Mortgage recording tax: A tax on recording a mortgage, on condos and houses (co-op share loans aren't subject). In New York City the total is 2.05% on loans under $500,000 and 2.175% from $500,000; the lender pays 0.25% on one- to six-family homes, so borrowers usually pay 1.8% or 1.925%. In Suffolk the borrower usually pays 0.8% (NY Tax Department).
Peconic Bay tax: A tax paid by the buyer (Tax Law §1449-dd) on East End purchases: 2% for land preservation (§1449-bb), plus 0.5% for housing in East Hampton, Southampton, Shelter Island and Southold, but not Riverhead (NY Assembly). Up to $2 million, the first $400,000 of a home is exempt in the first three towns and $200,000 in Southold and Riverhead; some first-time buyers are fully exempt (§1449-ee).

Mortgages

Loan Estimate: A standard three-page form a lender must send within three business days of your application, showing rate, payment, closing costs and loan features. It isn't an approval (CFPB). Compare your Loan Estimates.
Closing Disclosure: The final version of your loan terms and costs, which the lender must give you at least three business days before closing. Compare it with your Loan Estimate (CFPB).
APR: The annual percentage rate: the interest rate plus points, broker fees and other charges, as a yearly rate, so it's usually higher than the interest rate. Don't compare a fixed-rate loan's APR with an adjustable one's (CFPB).
Points: A fee paid at closing for a lower interest rate. One point is 1% of the loan; it tends to pay off only if you keep the loan a long time (CFPB). When points pay back.
Lender credits: Points in reverse: you accept a higher rate and the lender pays part of your closing costs (CFPB).
Rate lock: The lender's promise to hold your rate until closing, if you close within the lock period (often 30, 45 or 60 days) and your application doesn't change. Extending a lock can be expensive (CFPB).
Debt-to-income ratio (DTI): Your monthly debt payments divided by your monthly income before tax. Lenders, and co-op boards, use it to judge whether you can afford a loan (CFPB). Affordability.
Conforming loan limit: The largest loan Fannie Mae and Freddie Mac can buy, set each year by the FHFA. For a one-unit home in 2026 it's $832,750 in most places and $1,209,750 in New York City, Nassau and Suffolk (FHFA).
Jumbo loan: A mortgage above the conforming loan limit. Fannie Mae and Freddie Mac can't buy it, so each lender sets its own rules on rate, down payment and reserves. Compare example mortgages.
PMI: Private mortgage insurance, which protects the lender, not you. It's typically required on a conventional loan with less than 20% down (CFPB). You can ask to cancel it once you owe 80% of the home's original value, and it generally ends at 78% (CFPB).

Sources

Before you rely on it. Rates and rules change, and your contract, building and lender can change who pays what. Check the figures for your own purchase or lease with your attorney.