Changes to rental laws for tenants and landlords?
In June 2019, lawmakers in Albany and Governor Cuomo enacted The Housing Stability and Tenant Protection Act of 2019, which brings significant changes in New York State’s rent laws. While much of the legislation affects rent-regulated (stabilized/controlled) units — such as changes to vacancy deregulation, preferential rents, major capital and individual apartment improvements — there are also important changes that affect ALL rental units. So whether you’re a landlord or a tenant, here are some of the important changes to take note of:
Caps on application fees. Landlords may not collect an application fee except for background and credit checks, which may not exceed $20 or the actual cost of the screening, whichever is less. The landlord may not request the fee from the applicant unless the landlord provides a copy of the background and credit checks, as well as the receipt or invoice for the screening. Tenants may also be able to avoid paying the fee if they provide the landlord with a copy of a background check and/or credit check conducted within the past thirty days. The $20.00 limit does not apply: (1) When a property is being sold, including within a co-op or Condo; (2) Application fees imposed by co-op/condo boards (i.e., fees charged by persons other than the unit owner); (3) Additional property exclusions provided in NY Real Property Law § 238-a(1)(a).
Security Deposits, Right of inspection, and "cure path" for post-tenancy repairs. When signing a new lease, security deposits are now limited to one month’s rent. At the end of the tenancy, the security deposit must be returned (less itemized deductions) within 14 days of the tenant leaving the premises.
Before taking occupancy, the tenant now has a right to inspect the apartment to create a written document attesting to the condition of the unit. Prior to surrendering the apartment, the tenant may have another inspection where the landlord gives the tenant an itemized list of repairs or cleaning that may be the cause for deductions from the tenant’s security deposit. This "cure path" allows tenants to amend the conditions itemized before the end of their tenancy. For any outstanding issues, the landlord must provide the tenant with a final itemized statement indicating what deductions were made, if any, and the reasoning why within 14 days after the tenant vacates the premises.
Late fees and rent demands. Late fees cannot be charged until more than five days after the due date, and cannot exceed $50 or 5% of the monthly rent, whichever is less. If a tenant has fallen behind on rent, the owner may ask the tenant to pay the full amount that they owe — this is called a rent demand. Rent demands now allow the tenant 14 days to pay the owed rent, whereas previously, tenants were only given 3 days to pay.
Renewals or rent increases above 5%. If at the end of the term the landlord intends to raise the rent above 5%, or chooses to not renew the tenancy, the landlord must send notice to the tenant by process server (not mail). The law requires 60 days’ notice for leases of at least one year (but less than two years), and 90 days’ notice for leases of two years or more or where a tenant has lived in the unit for two years or more.
These are just some highlights, but you can find the full text of the new legislation here. Some of the provisions leave room for interpretation, so if you have concerns or questions, please reach out and we can connect you with landlord-tenant attorneys that are familiar with the changes.