We are here to address your concerns regarding the new Landlord/Tenant laws that went into effect on June 14, 2019. Here is a short summary of the key aspects to be aware of:
- Eliminated the emergency nature of the rent regulation; no longer expires every 4 years
- Elimination of Vacancy Increases in the law and the Rent Guidelines Board
- Preferential rents apply to the tenant throughout his or her tenancy; owner may revert back to the Legal Regulated Rent upon vacancy
- Elimination of Deregulation
- Simple failure to register while charging the Legal Regulated Rent will not remove a rent freeze until the registrations are filed. Owner liable for treble damages retroactively and prospectively
- Elimination of “Safe Harbor” of making a voluntary refund with 9% interest within the first 30 days to answer a Rent Overcharge complaint
- Clear statement that both DHCR and Courts of Competent Jurisdiction have concurrent jurisdiction of Rent Overcharge claims
- New look back of 6 years rather than 4 years
- Most recent reliable registrations shall be used to set the rent
- Reiteration that registrations must be served on the tenants, as well as filed with DHCR
- Treble damages expanded from 2 years prior to filing a rent overcharge complaint to 6 years
- Expand record keeping from 4 years to 6 years
- Expands data for determining rent
- Evidence of a fraudulent scheme-unexplained increase in register rent or leases
- Mandatory Attorney’s fees and reasonable costs will be assessed against owners in Overcharge proceedings
- Cap on Rent Controlled increases
- Eliminated Fuel Cost increases for Rent Controlled tenants
- Owner Use-a) only one housing accommodation per building; b) new test: immediate and compelling necessity; c) cannot evict anyone who is 62 years or older, who has resided in the building for 15 years (reduced from 20) with an impairment d) plus new cause of action for fraud by owner
- Eliminate Temporary Exemption for government-funded, not-for-profit organizations for the homeless, persons with disabilities or vulnerable individuals; subtenants shall be deemed to be tenants
- IAIs are now temporary-must be removed in 30 years; less than 35 units- amortize costs by 168 months (or 14 years); more than 35 units- amortize over by 180 months (or 15 years)
- IAIs capped at an aggregate of $15,000.00 for 15 years; no more than 3 separate IAIs, with a “reasonable costs” standard; work is done by licensed contractors; cannot be replaced again until such improvement exceeds its “useful life”
- Eliminates common ownership between owner and contractor or vendor
- ALL IAIs require removal of all hazardous (B) and immediately hazardous (C) violations
- Photographic records of IAIs required
- MCIs are now temporary-must be removed in 30 years
- DHCR to set a schedule of “reasonable costs”
- No MCIs if 35% or fewer rent-regulated apartments
- 2% cap in MCI increases including MICs granted after 6/16/12
- DHCR shall audit and inspect 25% of MCIs
- Dept. of Finance filing fee for registration doubled from $10 -$20 per apartment
Changes to the Day to Day Operation of Buildings and Summary Proceedings
While the big headlines regarding the Rent of 2019 focus on the changes to Rent Stabilization, substantial changes were made to various statutes that will affect the day to day operation of residential buildings in New York City and beyond. Below you will find some of the most significant changes. Please feel free to contact our office for further information, questions or clarifications.
Retaliatory Eviction
- The new law expands upon the scope of what includes retaliatory eviction to a tenant’s actions and penalties. The most significant change is that complaints to the owner OR a governmental agency, like HPD or DHCR, based upon the warranty of habitability (conditions in apartment or building), and proceedings started by the tenant to enforce the warranty of habitability or duty to repair, in most cases HP actions, are now a basis to claim retaliatory eviction.
- The effect of the changes is the give more power to a tenant to seek penalties, costs and damages for retaliatory eviction
Termination of Tenancies and Rent Increases
- Generally, for free-market tenants when an owner intends to terminate the tenancy or charge more than a 5% increase in rent then the owner must now provide the following notices:
- a tenant who occupied less than a year and does not have at least a one year lease must be given a 30-day notice;
- a tenant who occupied more than a year, but less than two years, and does not have a two-year lease must be given a 60-day notice;
- a tenant who occupied more than two years or has a lease for a term of two years must be given a 90-day notice.
- The failure to provide the required notices means that the tenant may reside in the apartment until the proper notice is sent.
- This provision also applies to month to month tenants, which means that based upon the length of the tenancy you will have to provide notice.
- This provision also means that a notice to terminate is always required to be served before commencement of a no-defense holdover.
Month to Month Tenancy OUTSIDE City of New York
- Oddly, the new law provides that if a tenant is month to month outside of New York City, that the tenant alone may terminate the tenancy
Duty to Mitigate Damages When Tenant Vacates
- If a tenant vacates the apartment in violation of the lease term, the owner must now make a good faith effort to re-rent the apartment. The burden is on the owner now to show that could not reasonably re-rent the apartment.
- Any lease terms to the contrary are now void.
Potential Tenants with Litigation Histories
- A landlord cannot deny a potential tenant’s application because they have past litigation in housing court.
- There is now a presumption that if request information about housing court history and deny the application, that you violate the law.
- The Attorney General may seek penalties from $500-$1000.00
Duty to Provide Written Receipt
- If the tenant does not pay rent by check then the owner is obligated to provide a written receipt.
- If the tenant does pay for by check and makes a request for receipts in writing, then need to provide a receipt for the duration of the tenancy until tenant says otherwise.
- Owners must keep all records of cash receipts for at least three years.
- If rent is paid in person then an immediate receipt must be given, if not, the receipt must be provided within 15 days of receipt of payment.
Limitation on Fees For Residential Tenants
- Except if a statute or regulation says otherwise an owner cannot demand fees for an application to rent an apartment aside from background checks and credit checks.
- The fees for background checks and credit checks are limited to their actual cost but never more than $20.00 total.
- However, the fee must be waived if the tenant provided a report that is from within 30 days of application.
- Regardless, fees cannot be collected for background or credit check if a copy of the report is not provided to the tenant with invoice and receipt for payment.
- Late charges cannot be assessed unless payment is more than five days late and cannot exceed $50 or 5% of the rent, whichever is less.
Fees In Summary Proceedings
- The new act defines rent as the monthly or weekly amount charged for use of the apartment.
- In a housing court action, the owner may not seek any other charges, fees or penalties. This appears to mean that an owner cannot seek legal fees in a housing court action.
New 5 Day Notice for Failure to Receive Payment of Rent
- If the owner does not receive rent within five days of the date on which payment is due pursuant to the lease then the owner must:
- By certified mail (no return receipt requested)
- Provide a written notice
- Stating that the owner failed to receive rent
- The failure to provide a written notice may be used as a defense in a nonpayment case
- Therefore, prior to commencement of any nonpayment case this 5 day notice must be served by the owner.
Rent Demands
- All demands for rent must be in writing (no more oral demands) and the tenant will be given 14 days notice. For residential tenants remember that you must have previously served the 5-day notice of failure to pay.
Deceased Tenants
- If a tenant dies and a lease is still in effect with occupants still in possession, the owner can seek to obtain a judgment against the estate of the deceased person, but cannot get a judgment against the occupants. Separate actions would need to be commenced against the occupants.
- After the lease expires the owner would be able to bring licensee actions against the occupants, as was the case prior to the law.
Timing of Court Dates
- Holdover proceeding
- Petitions must be now served at least 10 days and no more than 17 days before the initial court date.
- Nonpayment proceeding
- Tenants now have 10 days to answer petition after service.
Adjournments Generally
- After the tenant answers the petition the Court must now grant an initial request for an adjournment and the adjournment cannot be less than 14 days later unless the parties agree otherwise. Subsequent requests for adjournments are at the court’s discretion.
Rent Deposit Requirements
- The requirements that tenants deposit or pay use and occupancy have been severely limited by the new law.
- The Court is no longer required to order payment of use and occupancy if the requirements of the statute are met. It is now at the Court’s discretion.
- The first request for an adjournment by a tenant to seek counsel will not be counted against them for the purposes of determining if they should pay use and occupancy.
- However, use and occupancy can be granted if:
- If a request for an adjournment is made solely at the tenant’s request OR 60 days have elapsed since the first court date minus any days requested for an adjournment by the owner; and
- The owner makes a motion on notice
- Even if the court grants the motion, use and occupancy are limited to rent accrued after the Court issues its order. An owner can no longer obtain use and occupancy that accrued prior to the court’s order.
- If the tenant establishes any of the following then use and occupancy will not be granted (new provisions in bold):
- Petitioner is not a proper party;
- Actual eviction, partial eviction or constructive eviction;
- A defense based upon the existence of hazardous or immediately hazardous violations in the apartment or common areas (B and C violations);
- A colorable claim of rent overcharge; and
- A defense that the unit is in violation of the certificate of occupancy or illegal
- The amount that the Court may order to pay is limited to legal rent or the tenant’s share even if the subsidy has expired
- For tenants on a fixed income, the amount of use and occupancy is limited to 30% of their income
- If a tenant fails to pay use and occupancy the only remedy is an immediate trial which the Court is not required to order and is subject to the Court’s calendar. Additionally, if the tenant shows good cause the court may extend the time to pay.
- A tenant’s answer or defenses can never be stricken for failure to pay use and occupancy.
Warrants
- Warrants must now state the earliest date when execution may occur and the Marshall can only remove persons named in the proceeding. Therefore, all effort must be made to determine the names of all occupants and name “John Doe” and “Jane Doe”.
- The notice period was extended to 14 calendar days for the execution of a warrant.
Stays of Issuance of Warrants
- The Court now has the discretion to extend the time for a stay of issuance of a warrant for up to a year.
- The basis for a stay now includes extreme hardship categories as follows:
- Health concerns;
- Significant exacerbation of ongoing conditions
- Child enrollment in a local school
- Any other extenuating life circumstances
- The Court is to consider hardships the stay may impose on the landlord
- If a tenant is shown to be objectionable based on evidence, then a stay will not be provided
- If a proceeding is based upon a breach of the lease then the Court will give the tenant 30 days to cure the issue.
Unlawful Eviction
- A new section was added to address unlawful evictions.
- Cannot attempt to evict or induce a tenant or occupant to vacate who has resided in apartment for more than 30 days except through court proceeding.
- The following conduct is unlawful:
- Using or threatening to use force;
- Interfering in tenant’s occupancy of the tenant by engaging in conduct like an interruption of essential services
- Engaging in threatening to engage in any other conduct which prevents or the occupant from living in a unit like:
- Removing possessions
- Removing the entrance door
- Removing or rendering useless a lock
- Changing a lock without providing a key
- The owner is obligated to take steps to restore a tenant if the owner committed the objectionable conduct listed above, or if the owner knew or had reason to know.
- Restoration must be done within seven days of the request
- Violations of the law include criminal and civil penalties:
- It is a class A misdemeanor
- Civil penalties of $1,000 to $10,000 for each separate violation
- Civil Penalties of $100 per day from the date of the request to be restored but cannot exceed six months
Security Deposits
Security Deposit laws apply to all residential units
The deposit cannot exceed one month’s rent
- Owner is required to return the entire amount except for reasonable and itemized costs due to:
- Nonpayment of rent
- Damages beyond normal wear and tear
- Nonpayment of utilities
- Moving and storage fees
- After a tenant signs the lease, but before the occupancy begins, the owner must give the tenant an opportunity to inspect the premises with the landlord’s agent. If the tenant requests an inspection then the owner must provide a written agreement attesting to the condition of the premises.
- If the tenant gives the owner more than two weeks notice of termination then the owner must notify the tenant in writing the right to request an inspection. If there is a request then inspection must take place between one week and two weeks prior to the end of the tenancy. After inspection, the owner needs to provide an itemized proposal for the basis of deductions. The tenant then gets an opportunity to cure the conditions.
- Within 14 days after vacating the apartment, the landlord is to provide an itemized statement indicating the basis for the amount retained. If the owner fails to provide the statement and leftover deposit within 14 days the owner forfeits the right to retain the deposit.
- In any action, it is the landlord’s burden to establish the reasonableness of the amount retained.
- A violation of this provision shall result in actual damages and punitive damages up to twice the value of the security deposit.
- Part L – This section is named the “Rent Regulation Reporting Act of 2019”
- The new law requires the Commissioner of the DHCR before December 31 of each year to submit a publicly available report and shall include 14 items, including, but not limited to:
- Number of Rent Stabilized apartments in each county; and
- Number of Rent Controlled apartments in each county; and
- Number of MCI Applications; and
- Number of units with Preferential Rents; and
- Number of overcharge complaints; and
- Number of TPU Audits.
Part N – Conversions to Cooperative or condominium ownership in the City of New York:
- The definitions of terms were amended as follows:
- “Non-Eviction Plan” – a plan which may not be declare effective until written purchase agreements have been executed and delivered for at least 51% (previously 15%) of all dwelling units in the building or group of buildings or development by bona fide tenants who were in occupancy on the date a letter was issued by the Atty General accepting the plan for filing.
- “Eviction Plan” – No longer permitted. Only if submitted prior to June 14, 2019
- “Senior citizen” – non-purchasing tenants who are 62 years of age or older on date plan submitted to the department of law or date attorney general accepted the plan for filing.
- Eligible disabled persons” – on date plan submitted to the department of law or date attorney general accepted the plan for filing.
- No eviction proceedings will be commenced against senior citizens or disabled persons. Rentals of seniors and disabled persons who reside in units not subject to government regulation shall not be subject to unconscionable increases beyond ordinary rentals for comparable apartments. There is a list of factors in determining comparability – building services, maintenance expenses
- Seniors and disabled persons who reside in regulated units shall continue to be regulated.
- Rights to seniors or disabled persons may not be reduced.
- If there is a dispute as far as eligibility for senior citizen or disabled person, the offeror of the plan must apply to the attorney general within 30 days of the receipt of the election forms for a determination.
- After issuance that attorney general accepted the plan for filing, offeror to notify attorney general percentage of a bona fide tenant in occupancy on the date plan was accepted for filing who have agreed to purchase under the plan.
- Tenants in occupancy on date Attorney General accepts the plan for filing shall have exclusive right to purchase their unit or shares for 90 days.
- May not show the apartment to a 3rd party during 90 days, unless written waiver by the occupant.
- Tenants in occupancy after the 90 day expiration, shall have the right for an additional 6 months to purchase the unit or shares on the same terms and conditions as are in an executed contract to purchase by a bona fide purchaser, which the occupant has 15 days to exercise once notified by registered mailing of notice with copy of contract.
If you have any questions on these new laws and how they apply to you, give us a call.