Sweeping changes to New York’s residential landlord-tenant law took effect in June 2019. A brief overview of some of the key changes are described below. New York landlords of residential units will need to update their leases to be compliant with these new laws and will need to modify their operating procedures for dealing with tenants. Most standard pro forma leases out there are not compliant with all of these rules. And for landlords with existing leases that have different provisions, they will need to understand how the new laws will impact their time periods and notice requirements, especially for renewals, security deposit returns and late payments.
- Residential security deposits have been capped at one month’s rent. The landlord must return that money within fourteen (14) days after the tenancy ends, along with an itemized statement showing the basis for any deductions (repairs and cleaning).
- Application fees for apartments have been capped at the lesser of $20 or actual background check fees. Landlords may only collect an application fee upon providing the applicants with a copy of the results of the background check, together with a copy of a receipt or invoice. The landlord must waive this charge if the applicants can provide copies of a credit and background check conducted within a thirty (30) day period prior to the application.
- Prior to a new tenant takes possession of a unit, a landlord must offer the prospective occupant an opportunity to do an inspection of the apartment with the landlord and execute a written agreement detailing any defects or damages identified during the walk-through. Upon vacating the property, the landlord may not deduct from the deposit any repair costs that are associated with those pre-existing items.
- A minimum of one week (but no more than 2 weeks) prior to vacating the apartment, tenants can request an inspection and the landlord must present an itemized statement specifying the damages that are proposed to be the basis of any deductions from the deposit. The tenant must be afforded the opportunity to correct or cure those conditions before vacating the premises to avoid the charges.
- Landlord “blacklists” have been banned so landlords will no longer be able to refuse leases to tenants who have been sued in housing court.
- Landlords must give at least 30 days’ notice (longer for longer lease terms) to tenants if they intend to raise rents by more than 5% or it does not plan to renew a residential tenant’s lease.
- Late fees are now capped at lesser of $50 or 5% of the monthly rent, and may only be charged after payment of rent is late by 5 or more days. Landlords may only demand and collect a single fee for a late rent payment, per month. (Many leases have a late fee and an interest charge that accrues and this is now prohibited) If rent is not received within 5 days of the date specified in the lease to receive payment, landlords are required to send a notice via certified mail to the tenant demanding payment.
- In the event a tenant vacates an apartment, the landlord is required to mitigate its damages by taking reasonable efforts to re-let the apartment. A lease with a new tenant will extinguish the former occupant’s liability for any additional rent payments.
- Statutory rent demands (commonly known as the “3-day demand”) must be written and must provide tenants with 14 days to make payment.
- The timeline and process for summary eviction proceedings is longer and more favorable to tenants. Tenants will now have 10 days to answer a petition. Warrants of eviction must give the tenant at least 14 days to pay the arrears, stop the eviction and continue its tenancy. Additionally, the court may grant a 30-day stay of issuance of the warrant during which time the tenant may cure its default and continue its tenancy. The court must vacate a warrant of eviction in a non-payment proceeding if the tenant tenders or deposits the rent due at any time prior to the warrant’s execution (unless the landlord establishes that the tenant withheld rent in bad faith). If a tenant has been evicted, judges may stay execution of a warrant for up to one year if the tenant is unable to find alternate housing close-by and there would be an adverse impact on the tenant’s well-being.
These changes will certainly impose burdens on landlords and hamper their ability to address residential tenants who fail to timely pay rent. These additional costs and risks should be taken into account when drafting leases and setting rental rates. It might be worth sitting down with your attorney to discuss options and strategies for addressing these changes and protecting your interest as a landlord given these tenant-protective limitations now imposed under the new law.