Tenant Can Purchase One-Year Rent Guaranty from Insurance Broker

An insurance agency offered landlords a rent guaranty service. Landlords asked the DHCR if the plan would violate the Rent Stabilization Law or Code. Under the plan, the insurer would provide a one-year rent guaranty for new tenants who qualified after a credit check. The insurance plan would allow new tenants, who may be recent college graduates or who may have unusual employment circumstances, to qualify for rentals. In an opinion letter, the DHCR said that there was no bar to such a plan under the law or code. It was not unusual for landlords to ask such tenants for guarantors when signing vacancy leases, anyway. The DHCR noted that although the plan in question offered only a one-year rent guaranty, under the code, landlords still had to offer tenants a one- or two-year lease.

DHCR Opin. Ltr. by Charles Goldstein (7/11/00) [2-pg. doc.]