New York State Restriction of Landlord Rights: Summary

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        I am bringing you this information directly from the summary of provisions outlined in the bill that just passed entitled "The statewide housing security and Tenant protection act of 2019". Please note this is a fairly extensive read and is quite technical too. As a realtor here in central new york I am a member of my local board and a member of the state association. As an industry we were given barely any notice that this was even being considered. Prior to this legisaltion passing, we debated an even stricter version of this legislation and won. Then, not even a week after winning the previous debate this new bill was on the floor, passed and was signed into law by governor Cuomo. We fought hard against this new sweeping restriction of landlord rights but our democratic dominated state legilslature was not willing to listen. This law is effective immediately. 

Part A. Names this Act the "Housing Stability and Tenant Protection Act

of 2019; Would make permanent the system of rent regulation in New York

State and building conversions to cooperative or condominium ownership

in the City of New York.

Part B: Repeals Vacancy Bonus Increases, which allows automatic rent

increases of up to 20% upon vacancy; Repeals Longevity Increases, which

allows automatic rent increases based on the length of time since the

last vacancy.

Part C: Prohibits a Rent Guidelines Board (RGB) from setting vacancy

bonus rent increases. Prohibits an RGB from setting longevity rent

increases.

Part D: Repeals High Rent Deregulation, which allows units to be removed

from rent regulation upon vacancy after the rent achieves a high rent

threshold; and Repeals High Income Deregulation provisions, which allows

units to be removed from rent regulation if a tenant's income is

$200,000 or more for two consecutive years.

Part E: Sets the Preferential Rent as the base rent for the duration of

a tenancy, but preserves regulatory agreements that allow for legal rent

increases.

Part F: Allows HCR or a court of competent jurisdiction to look back at

6 years of rent history when determining rent overcharges, or a longer

look back period if it is reasonably necessary to make a determination.

Eliminates the ability of an owner to escape punitive damages where the

overcharges were willful.

Part G: Enacts the "Statewide Tenant Protection Act of 2019" to allow

any city, town or village to opt-in to ETPA and provides the appointment

of the members of the new RGBs to be done by the opting-in munici-

palities.

Part H: Amends the maximum collectable rent increase formula that

applies to Rent Control units to set annual increase at either an aver-

age of the last five years of RGB increases, or 7.5%, whichever is less;

and prohibits Fuel Pass-Along charges for rent-controlled tenants.

Part I: Reforms the personal use exclusion to limit the number of units

an owner can take out of rent regulation, and requires the use to be an

immediate and compelling necessity for use as a primary residence.

Part J: Ensures that units rented by nonprofits to provide housing to

homeless or previously homeless people revert to rent regulation at the

end of the use by the nonprofit, and that the previously homeless person

or persons are treated as tenants for purposes of the law.

Part K: Major Capital Improvement (MCI) & Individual Apartment Improve-

ment (IAI) Reforms

*Limits approvals to work for essential building functions and other

improvements (e.g, heat, plumbing, windows, roofing); exclude mainte-

nance.

*Limits spending to HCR schedule of reasonable costs for improvements.

*Prohibits approval where owner has hazardous violations on building.

*Adjust the annual cap for MCI rent increases approved within the prior

seven years for continuing tenant.

*Associated rent increases may only be prospective.

*Requires HCR to audit and inspect work on a minimum of 25% of approved

MCIs annually.

*Reduces rent increases paid by tenants and makes increases temporary:

o Amortize: 12 years for buildings of 35 units or less; 12.5 years for

other buildings;

o Cap Rent Increases at 2% annually;

o Rent surcharges would expire in 30 years.

*Reforms Individual Apartment Improvements (IAIs) to limit rent

increases to substantial modifications:

o Up to 3 times in any 15 years, for up to $15,000;

o Amortize: 14 years for smaller buildings of 35 units or less; 15 years

for all other larger buildings; and,

o Surcharges expire in 30 years.

Part L: Requires the Division of Home and Community Renewal (HCR) to

conduct an annual report on rent regulation that would be due on Dec.

31 of each year and be made publicly available.

Part M: Establishes the Statewide Housing Security and Tenant Protection

Act of 2019."

*Section one sets forth the short title.

*Section two strengthens tenant protections against retaliatory

evictions.

*Section three requires written notice before increasing the rent or

refusing to renew a ase.

*Section four requires a landlord to, in good faith and according to

their resources and abilities, take reasonable and customary steps to

re-rent a unit if the tenant vacates before the end of the lease term.

*Section five bans the use of "tenant blacklists" and protects a

tenant's ability to fight for their rights in housing court.

*Sections six and seven conform existing notice requirements for month-

to-month tenancies to the notice requirement created by section three.

*Section eight prohibits landlords from recovering attorneys' fees when

the tenant does not contest the eviction and the landlord wins a default

judgment.

*Section nine provides more robust record-keeping when tenants pay with

cash and requires notice if the landlord does not receive payment within

five days of the due date.

*Section ten prohibits landlords from charging application fees, except

the actual cost of background checks and credit checks, and limits late

fees to $50 or 5% of the monthly rent, whichever is less.

*Section eleven defines "rent" for the purposes of eviction proceedings

to exclude extraneous fees and charges to protect tenants from eviction

due to failure to pay fees.

*Section twelve requires a written demand for rent with 14 days' notice

before beginning an eviction proceeding for non-payment of rent.

*Section thirteen allows a tenant to pay the full amount of rent due

before the hearing on an eviction petition and avoid eviction.

*Sections fourteen and fifteen provide an additional five days for

tenants to respond to petitions for eviction.

*Section sixteen allows the tenant to answer the petition at the hear-

ing, rather than providing an answer three days before the hearing.

*Section seventeen provides tenants with at least one adjournment of an

eviction proceeding of at least 14 days, as of right, and it reforms the

requirements for payment of use and occupancy in New York City Housing

Court.

*Section eighteen repeals section 747-a of the Real Property Actions and

Proceedings Law.

*Section nineteen provides tenants with at least 14 days notice before

the execution of an eviction warrant and requires additional information

on the warrant. If the eviction was for non-payment of rent, it also

allows the tenant to pay the full amount of rent due before the

execution of the warrant and avoid eviction, unless the tenant withheld

the rent in bad faith.

*Section twenty repeals an expired subdivision of the Real Property

Actions and Proceedings Law.

*Section twenty-one allows judges to issue a stay of eviction for up to

one year where the tenant cannot find suitable housing in the same

neighborhood or the eviction would cause extreme hardship. It also

provides an automatic 30 day stay of eviction where the eviction is

based on breach of a provision of the lease to allow the tenant an

opportunity to cure the breach.

*Section twenty-two expands the requirement that a court stay eviction

proceedings if utilities have been cut off to the building due to the

landlord's failure to pay for utilities. Currently, this only applies to

multiple dwellings, but this section makes it apply to all dwellings.

*Section twenty-three requires the court to seal an eviction if it was

the result of a foreclosure of the building and the tenant was not at

fault.

*Section twenty-four creates the crime of unlawful eviction.

*Section twenty-five limits security deposits to one month's rent and

requires the return of the deposit within 14 days of the end of occupan-

cy with an itemized statement for any portion of the deposit withheld.

*Section twenty-six prohibits the Office of Court Administration from

selling housing court data to third parties.

*Section twenty-seven creates the New York State Temporary Commission on

Housing Security and Tenant Protection, which will study the impacts of

the bill and issue a report recommending future legislation by December

31, 2022.

*Section twenty-eight provides a severability clause.

*Section twenty-nine provides the effective date.

Part N. Reforms Condo & Co-Op Conversions to repeal eviction plan

conversions, limit non-eviction plan conversions of rent regulated

buildings to preserve the rental housing stock, and provide additional

protections for senior citizens and disabled tenants in buildings seek-

ing a non-eviction plan conversion.

Part 0: Mobile & Manufactured Home Part Tenant Protections:

*Establishes Rent-to-Own protections;

*Requires a Homeowner Rights rider to leases;.

*Requires a stipend to be paid to homeowners evicted for the conversion

of the use of the park parcels the home is situated on and 2 years

notice of the change of use;.

*Provides stronger protections against evictions; and,

*Limits rent increases to 3% with the ability of tenants to challenge in

court any higher increases.

This is crazy. If I read those sections right a tenant can miss payment, wait 14 days, pay the day before court, withhold the late fees, and not get evicted for not paying the late fees. Then the next month when they're probably late again don't pay, get evicted, then petition to stay for a year.

Why would anyone ever be a landlord in New York.

Originally posted by @Aidan Mulligan :

This is crazy. If I read those sections right a tenant can miss payment, wait 14 days, pay the day before court, withhold the late fees, and not get evicted for not paying the late fees. Then the next month when they're probably late again don't pay, get evicted, then petition to stay for a year.

Why would anyone ever be a landlord in New York.

These rules generally apply ONLY to Rent regulated buildings.

Buying a Rent regulated building is a CHOICE. You are not FORCED to buy a rent regulated building.

I am a Brooklyn, NYC Property Investor with a portfolio of 10 small non-regulated multi-family buildings.

It should be obvious that if you compare a rent regulated building to an equivalent non-regulated building, the latter is much more valuable.

What REALLY BOTHERs me is the large amount of unscrupulous Investors that buy rent regulated buildings for CHEAP but then illegally treat it as non-regulated.

This is NOT FAIR to those of use who pay the very large price difference to have non-regulated buildings.

I am in FAVOR of forcing those Investors who purposely break the law to enrich themselves by paying for a rent regulated building but yet reap the benefit by charging market rents illegally.

These criminal investors should not be competing against my much more expensive real estate.

Typically, a building such as my 4 Family non-regulated building will be about twice as much as an equivalent 10 unit regulated building. BUT, if the owner of the 10 unit building treats it as a non-regulated building, they not only have the market rents, but they also benefit from the cheap property tax which accompany rent regulated buildings. That then pushes up the value of the building despite it being illegal.

I'm not saying ALL rent regulated buildings are like this but enough of them are that the City should be cracking down on them.

I'm also not saying that some small landlords won't be penalized either, that will happen. That's why it's best to steer clear of the possibility being in the cross hairs of rent regulations. I do that by buying buildings under 5 family which are non-regulated in general.

 Just to throw out some numbers, according to Wikipedia, there are 43% of non-regulated apts in NYC. So why buy one that is regulated when there is so much available that are non-regulated?

You have a choice. It's up to you.

But if you make the choice to buy a regulated building, you should pay a much cheaper price than a non-regulated building. The opposite is also true. If you are buying a non-regulated building, then you should be paying a much higher price in comparison.

Where the problem comes in is if you buy a regulated building for cheap and treat it like a non-regulated building illegally. This enrichens the criminal investor by taking advantage of everyone who pays to have these regulated apts, such as the Tax payers in NYC.

That's my opinion as a NYC Real Estate Investor and Broker. 

Updated about 2 years ago

Sorry, this posting is more about municipalities that already had opted in to rent regulations such as NYC. If the municipalities have the choice to opt in to rent regulation, then yes, you don't have a choice.

Originally posted by @Llewelyn A. :
Originally posted by @Aidan Mulligan:

This is crazy. If I read those sections right a tenant can miss payment, wait 14 days, pay the day before court, withhold the late fees, and not get evicted for not paying the late fees. Then the next month when they're probably late again don't pay, get evicted, then petition to stay for a year.

Why would anyone ever be a landlord in New York.

These rules generally apply ONLY to Rent regulated buildings.

Buying a Rent regulated building is a CHOICE. You are not FORCED to buy a rent regulated building.

If I am misunderstanding please correct me, but my interpretation is that any city, town or village within the state of NY can "opt in" to Rent Control at any time.

So, when you say buying a RC building is a "choice" - I don't think that's accurate, since ANY municipality can opt in henceforth.  Those of us with portfolios in previously non-RC areas upstate now all of sudden are slapped with a yoke around our necks and become unwilling participants to the socialism we try and avoid by purchasing north of the Tappan Zee.

The way I see it, any little town is just one Democratic mayor and a small activist group away from permanently altering the livelihoods of their landlords.

Originally posted by @Wesley W. :
Originally posted by @Llewelyn A.:
Originally posted by @Aidan Mulligan:

If I am misunderstanding please correct me, but my interpretation is that any city, town or village within the state of NY can "opt in" to Rent Control at any time.

I, like many others are waiting for a clearer interpreatation from our lawyer. Its been rumored that any municipality could opt in but only if their vacancy rate is below 5%. Also first they would have to form a rent guidelines board to make that decision. This law however is 70 plus pages of dense legal text. Im told in the local politcal circles tenants are not satistfied with this bill because it lacks the  "good cause" eviction clause. I anticipate an ugly fight coming up. 

Do you have the right to the property you own? Or does the tenant have the right to a property you own? This will be the idealogical battle for New York State. 

@Wesley W.

@Account Closed

My apologies, I posted in too much generalities.

What I meant to say, that in places that already has Rent Regulation AND a Rent Guidelines Board (RGB) such as NYC, it strengthens the already existing regulation.

In NYC's case, if you bought a non-regulated building that is under 5 family, you are generally safe from this regulation and in the future.

In other locations in the State of NY, yes, the municipality probably can opt-in. I have NOT read any of the specifics in this regards since I'm solely concentrated in Brooklyn.

I have not read all of the specifics since they don't pertain to my property portfolio. I cannot comment on other municipalities specifically.

I would say if you believe your own municipality MAY opt in then the next thing to do is into the exempt building class, such as buildings under 4 units, etc.

I'm somewhat sure that if NYC has exemptions then these exemptions gets carried forward into the new bill.

In my case, my properties were exempt before the bill and that carries forward for the most part. Only certain policies changes will be affecting my non-regulated properties here in Brooklyn, such as how much I can collect for a security deposit, etc. will be affecting me in general.

IF your municipality opts in AND your properties do become regulated when it was not already, WOW..... that is TERRIBLE news.

Keep us informed how it goes and I hope that your circumstances DOES NOT change from non-regulated to regulated!

Originally posted by @Llewelyn A. :
I am a Brooklyn, NYC Property Investor with a portfolio of 10 small non-regulated multi-family buildings.

Hm... let's see. San Francisco rent control ordinance started with large multi unit buildings, expanded to include non owner-occupied small building, expanded to owner-occupied building, even a duplex. And rent increase started with 7%, and now at .60% CPI. Bottom line is, once you hand over your rights to the government, it's just a matter of time before they take all of them away from you.

@Puri Indah

I think SF has the most EXPENSIVE housing in the US.

I didn't do the research, so I'm curious.

Is every building, from 2 Units and above, is rent controlled in SF? Are there any exceptions?

What about Condos? If you invested in a Condo, are those also rent regulated if you used Condos as rentals?

If NYC starts discussions about regulating below 5 family buildings, I am going to convert all my buildings to Condos and just sell them out. But this has not been a thought, at least not yet.

I'm also curious, did you experience having a non-regulated building or apt that had to then become regulated in SF?

Originally posted by @Llewelyn A. :

@Puri Indah

I think SF has the most EXPENSIVE housing in the US. ==Exactly. Rent Control takes away a lot of rent-able units because of property owners' fear of getting stuck with their rent controlled tenants. This reduces housing supply and therefore makes it very expensive.

I didn't do the research, so I'm curious.

Is every building, from 2 Units and above, is rent controlled in SF? Are there any exceptions? ==Only if they are condos or built after 1979. This is called the Costa Hawkins act, but the State of California has been trying to repeal this as well and making everything rent controlled.

What about Condos? If you invested in a Condo, are those also rent regulated if you used Condos as rentals? ==Condos can increase rent to a fair market value once lease is due, but but Landlords have no options not to renew lease, which automatically goes month to moth.

If NYC starts discussions about regulating below 5 family buildings, I am going to convert all my buildings to Condos and just sell them out. But this has not been a thought, at least not yet. ==I'd do that right away if I were you since you never know if they change the laws again (In SF this is a very difficult thing to do). But of course there is no guarantee that they will not expand rent control to condos as well.

I'm also curious, did you experience having a non-regulated building or apt that had to then become regulated in SF? ==not me personally but lots of older landlords did.

@Account Closed Admittedly I skimmed the 74 pages of the law, but I didn't see anything regarding the number of units as creating an exemption.

Originally posted by :

  there is another bill in committee (Senate Bill S2892A) that is dealing with the "no cause eviction."  Now some may say that it won't be done this session, but the rent control act was fast tracked at the end of this session, and they are still passing bills two days after the session was supposed to end.  Heck, it could have passed today as I have not watched the news yet.

I agree with you, this is coming and coming fast. Im waiting to hear what the leaders of our Political action committee intend to do. I should have more updates soon. 

From what I am reading online, the policies about not being able to use prior evictions to screen and staying evictions to a year and the other things Aiden mentioned  etc. apply to all rentals- regulated and unregulated. Sure seems like it wouldn’t even make sense to be a landlord in nyc. What would a newbie possibly do to hedge against all of this if they were thinking of getting in the game?