New York's New Rent Laws: What You Need to Know

The new laws that took effect June 14, 2019 represent a tectonic shift in the status quo, swinging the pendulum towards greater tenant protects in New York state. 

If you are a landlord, it is of upmost importance to be aware of these changes and to speak with an experienced real estate attorney regarding the landmark legislation passed this year.

Below, you will find a summary of the new laws and how they affect the residential real estate market.

Security Deposits

The new law limits security deposits to one month of rent statewide. This law already applies to regulated units. In addition, security deposits must be returned within 14 days of the end of occupancy.

Furthermore, after signing a lease with a tenant, the landlord must offer the tenant a walkthrough to inspect the apartment. If the tenant requests the inspection then the landlord and tenant must execute a written agreement attesting to the property’s condition and damage. 

A landlord must also offer a walkthrough inspection to tenant within a reasonable time before expiration of the lease. During the walkthrough the landlord must itemize the cost of damages and repairs and provide the tenant with a reasonable amount of time to cure such defects. 

Screening Procedures

A landlord may not refuse to rent to a tenant due to past landlord-tenant housing court cases, a practice known as ‘blacklisting’.

If a landlord denies an applicant due to legal actions by a prior landlord or the applicant enforcing his/her rights in a previous housing proceeding, the landlord is in violation of the law.  

In addition, credit check fees are limited to $20.00, or the cost of the actual credit check, whichever is less. 

Vacancy Allowances

The state previously authorized owners to increase rent by 20% when a regulated unit was vacated. This statute has been repealed, along with the longevity bonus which permitted owners to raise rent more than the initial amount based off the last vacancy. 

Lease Renewals

While universal rent control was not included in the legislation, landlords are now required to provide notice in writing if a renewal increase exceeds 5%. 

If a tenant has held the lease for a unit for at least one year, the tenant must receive at least 60 days notice of a renewal increase. 

If a tenant has held the lease for unit at least two years, 90 days notice must be given.

If a landlord does not provide notice within the aforementioned time frames, the tenant can remain in legal occupancy until said notice is given.

High Rent/High Income Vacancy Decontrol

Building owners were previously available to enjoy vacancy decontrol when a unit’s legal rent exceeded $2,774. 

Under the current law, rent stabilized units will remain rent stabilized in perpetuity. 

In addition, regulated apartments became market rate if a tenant earned $200,000 for two consecutive years. This will no longer be allowed.

Late Fees

Late fees in regulated and unregulated units are limited to $50.00 or 5% of the rent, whichever is less. Landlords must provide a 5 day grace period before assessing a late fee. 

Preferential Rents

Owners were previously able to charge a ‘preferential rent’,  a rate less than the established legal rate based on market conditions, for regulated units.  

Owners can no longer raise the rent to the full legal rate when offering a renewal.  However, owners can charge the legal rate once the tenant vacates the apartment. 

Individual Apartment Improvements/Building Improvements

Landlords were previously able to renovate regulated units and collect a portion of the renovation costs to include as rent. 

Landlords can make 3 improvements within a 15 year time frame but only up to $15,000 in compensable costs. 

For owners with 35 units or less, the compensation amortizes over 14 years at 1/168th of the cost, and 15 years for owners with more than 35 units at 1/180th of the cost.

Work must be completed by a licensed contractor without a common ownership between the landlord and the contractor. 

For building improvements, landlords were previously able to increase rent up to 6%–this number is reduced to 2%.

Owner Use of Regulated Apartments

The new laws under which regulated fall restricts landlords and their relatives from using multiple units as their own residences. 

With the new regulations, landlords may only seek 1 unit for themselves or an immediate family member(s). The landlord must also show a ‘compelling’ necessity to house himself or a relative in the apartment. 

Landlords are also barred from using an apartment for ‘owner use’ if the tenant is at least 62 years old, or has been in place for at least 15 years. 

Unlawful Evictions

A new criminal offense of unlawful eviction has been created. Illegally evicting a tenant or harassing a tenant out of a dwelling can lead to a fine up to $10,000 and is now a Class A Misdemeanor. 

Leasebreaks

If a tenant seeks to terminate the lease before the term is scheduled to end, or ‘break the lease’, the landlord must seek to re-rent the unit at fair market value or at the rate agreed to for the lease being breached. 

The new laws represent a monumental shift in the pendulum in New York real estate. It is crucial that you seek the best counsel and have an experienced real estate agent by your side to navigate the best route forward for your rental property.

Whether you’re looking to buy a new home or you’re a landlord seeking a new tenant, many will agree that Dondre D. Roberts is an expert in the complex field of New York City real estate. Having sold and leased $10 million dollars in real estate, Dondre can be counted on for his expertise, drive and tenacity to fight for his clients.​ He has worked for Nest Seekers International, a global real estate firm, large landlords and mom and pop owners alike. In his spare time, Dondre enjoys brunching, dog-sitting, traveling, coffee sipping, and reading the New York Times. He also likes Darth Vader, is a proud Bronxite, and is left-handed.