On June 14, 2019, New York passed the Housing Stability and Tenant Protection Act of 2019, dramatically changing New York's landlord-tenant law. Do you rent? Here are some important highlights you should know.
Through the decades, New York's landlord-tenant law has tried to strike a balance between landlords' freedom to develop and rent apartments with tenants' rights. The Housing Stability and Tenant Protection Act of 2019 is heavily tenant-friendly, affording enhanced protections for tenants.
No Mitigation Rule Erased in Residential Cases
Since 1995, landlords have had no duty to mitigate their damages when a tenant vacated their apartment in violation of the lease. The landlord had no duty to re-rent the premises and could sit back and sue the tenant for all rents lost due their breaking the lease. But the new law has wiped out the no mitigation rule in the context of residential leases. New section 227-e of New York's Real Property Law requires that landlords mitigate their damages if a residential tenant vacates in violation of the lease. Further, the law places the burden on the landlord to show that he has properly mitigated the damages. This does not apply in commercial leases, since the law specifically carves out only dwellings and it covers rent-regulated apartments and market rentals.
Vacancy and High Rent Deregulation
Landlords used to be able to take apartments out of rent regulated status under certain conditions, such as when the legal regulated rent reached $2733.75 (in 2018) or the tenant earned over $200,000 for two consecutive years. This has been eliminated. Now, apartments will remain regulated until they are vacant. Additionally, vacancy bonuses, which allowed landlords to raise the rent on regulated apartments 20% when they became vacant has been eliminated.
Condo & Co-op Conversion Threshold Increased
Landlords who wish to convert rent-regulated buildings into condos or co-ops must now obtain agreements to purchase from 51% of the tenants, which is up from 15%.
Use & Occupancy
Use and occupancy is essentially another term for rent that is collected after a lease expires or is otherwise violated, and is usually demanded by the landlord while a summary proceeding is ongoing. In the past, use and occupancy orders were not discretionary. Under the law, judges can consider the equities and determine whether use and occupancy should be granted. Further, in the past landlords could ask for use and occupancy orally in court. Now, a written motion on notice must be submitted.
Rent Deposit
At lease commencement, for both market and rent-regulated apartments, rent deposits are now capped at one month's rent. Rental applications are now capped at $20 and landlord blacklists, which commonly included the names of persons previously sued in housing court, have been banned.
Changes to Summary Proceedings
Summary proceedings include court actions to recover possession of the premises or for non-payment of rent. Summary proceedings were intended to give a landlord a quick and easy way to recover property or rent from tenants. The new law has made that a bit more difficult for landlords. Before starting an action in court for non-payment of rent, if the rent is not received within 5 days of the due date in the lease, landlords are required to send a certified letter to the tenant demanding payment. Failure to do so is an affirmative defense in an action for non-payment. This rent demand must give the tenant 14 days to pay the rent, up from the previous 3 day requirement. If a summary proceeding is commenced by a landlord, the tenant now has 10 days to answer the petition, up from 5 days.
Conclusion
The Housing Stability and Tenant Protection Act of 2019 affords enhanced protection for tenants in New York. But those protections may come at a great cost for landlords and may have negative consequences for both landlords and the City of New York. Some landlord advocacy groups are considering a challenge to the law as an unlawful taking and constitutional violation. If the law survives, there is likely to be very low turnover in rent-regulated apartments, but potentially higher turnover in market rentals as landlords seek higher rents to make up for their losses on the regulated side.
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