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Just about anything is legal on the conditions of a rental as long as it cannot be specific to any sort of class. So much of NYC real estate is in a loan limbo where the note has to be paid to the percentage it is occupied and the rest is rolled over to the final payment. All unpaid parts are due at the end of the loan. At the end of the loan, the owner, if he has had a few good tenates and alot of empty rooms has a value gain on the property and has not reduced the principal, but the equity is worth many times the inital value. So 20% down the first 10 years and the owner never really has to come up with any of their own money no matter how badly it is managed. They might not ever get any profits other than bullshit fees, but they are investing in NYC real estate like the call option with a really cheap roll over. The banks are really profiting for the risk of the default where they get a real estate inflation return on properties after the first 20%, but the insurance risk for those years is the lendee. This tends to have the entry fees be the majority of the monthly profits. The building with enough units for 3-10 turnovers a month sell at top prices. A 6 unit apartment building is dog shit per square foot, but a 24 unit apartment is valued like a 240 unit one. The city is also standing there with their hand out with many fees not that different between 6 and 24 units.

It all works if rents go up faster than actual carry costs and the inflated repairs do not eat the owners lunch. Not enough bankers are ready to say goodbye to that customer type as loans are on the asset side of a banks balance sheet. Nyc real estate under loans give people an inflated statement of personal wealth, allowing more lending, it is not liquid and the risk is not appreciated by the lenders until it all busts out in a quarter.

You owe the bank one million dollars and they own you, You and your buddies owe the bank one trillion dollars and you own the bank, and the loan officer buys you dinner.