As many of you have no doubt read, new laws were enacted on June 14, 2019, that will have a major impact on landlord and tenant law, housing court (residential and commercial parts), cooperative and condominium conversions. (Related topics: landlord-tenant law NYC, tenant lawyer New York, real estate lawyer NYC)
Below is the third part of my four-part synthesis of the 145-page bill that passed. If you want to discuss this with me, you can email, call or write me, I will answer your questions.
The new legislation is called the Statewide Housing Security and Tenant Protection Act of 2019 but don’t let the name fool you. The reforms impact residential and commercial landlords.
The new legislation may also impact a landlord’s rights in the bankruptcy court. Previously, a landlord would make a motion to lift the automatic stay after the tenant filed for bankruptcy protection. The landlord would take the position that once the warrant of eviction issued, the landlord and tenant relationship and the lease were canceled and thus there was nothing in the debtor’s estate to save in bankruptcy. However, the new law leaves open the possibility that the lease and tenancy may be revived because the court has the power to vacate a warrant issued for nonpayment of rent at any time prior to execution of the eviction and even to restore a tenant to possession if the tenant can tender payment in full.
The new RPL § 238-a(2) prohibits a landlord of residential property from demanding late charges from tenant unless payment has not been made within 5 days of the date when it was due and such late charge shall not exceed $50 or 5 percent of the monthly rent, whichever is less. A lease provision contrary to this is void.
The new RPAPL § 702 now defines rent as the monthly or weekly amount charged for use & occupancy of the dwelling unit and shall not include late charges, interest or other fees.
General Business Law § 352-eee has been revised to require 51% purchase agreements (subscriptions) from bona fide tenants under a non-eviction plan, rather than the former 15%, for a cooperative or condominium plan to be declared effective. Tenants have exclusive right to purchase for 90 days with an additional six months under certain circumstances. Eviction plans are prohibited.
Residential security deposits cannot exceed one month’s rent. Thus, cooperative boards may no longer condition the approval of a purchase application on the deposit of a maintenance escrow in excess of one month’s maintenance. Boards may still condition their approval of a purchase application upon the execution of a maintenance guaranty by a financially-responsible guarantor. While the Act prohibits a landlord (board) from requiring a tenant (shareholder) to deposit more than one month’s rent, it does not prohibit a landlord from requiring a tenant to provide a guaranty.
After lease signing but before tenant takes occupancy, landlord shall offer tenant the opportunity to inspect to determine the condition of the dwelling unit and if tenant requests the inspection the parties will enter into an agreement attesting to the condition and noting defects and damages.
Within a reasonable amount of time following either party notifying of intention to terminate the tenancy, unless the tenant terminates with less than 2 weeks’ notice, landlord shall give tenant the opportunity to be present at an inspection on at least 48 hours’ notice and then at the inspection landlord shall provide tenant with an itemization of the basis for landlord’s deductions from the security deposit. Tenant shall have the opportunity to cure before the end of the tenancy. Return of remaining deposit along with itemized statement to tenant within 14 days. Willful violation subjects landlord to up to twice the amount of the deposit.
For Rent Regulated Residential Premises:
High rent vacancy eliminated.
High income rent luxury decontrol eliminated.
Owner’s own use limited to a single unit for “immediate and compelling necessity” and not available for tenant 62 years of age or older and has been living in the building for more than 15 years or has an impairment.
Overcharge now has a look back of 6 years rather than 4 and the elimination of a safe harbor to avoid treble damages for providing tenant with a refund.
Investigation of rent records and rent history not limited to 6 years but can look back to any time “reasonably necessary to make such determinations”.
Treble damages assessed upon all overcharges willfully collected starting 6 years before complaint is filed. The courts and the DHCR have concurrent jurisdiction, subject to the tenant’s choice of forum.
Vacancy allowance on new tenant’s rent is eliminated.
Rent increases: The law now limits annual rent increases not to exceed the average of the previous 5 annual rent increases authorized by the RGB for rent-stabilized apartments.
Fuel cost pass-alongs to rent-controlled tenant are eliminated.
Individual apartment improvements limited to a total of $15,000 per unit over the course of 15 years and only collectible for 30 years. 1/30th and 1/40th have been changed to 1/168th and 1/180th
Major capital improvements capped at 2% for 30 years amortized at 12 years for buildings with 35 units or less or 12.5 years for buildings with more than 35 units.
In light of the new rent laws, the need for a landlord to have an aggressive, knowledgeable attorney is of paramount importance. Not doing so will negatively affect a landlord’s bottom line. Contact Gary J. Wachtel now or call today at (212) 371-6500 and let me assist you.