HOUSING STABILITY & TENANT PROTECTION ACT OF 2019 (WITH 2020 UPDATES)

Background & Credit Check Fees are Limited:

Real Property Law Section 238-A says that no landlord, lessor, sub-lessor, or grantor can charge processing or application fees, with the exception of a background check. And that fee cannot exceed $20. If the tenant provides their own background and credit check done within the last 30 days, the landlord can't charge a fee at all.

If the landlord does charge a fee for a background or credit check, they must provide a copy of the report to the applicant, along with the receipt for the invoice from the company that conducted the background check. 

Security Deposits Cannot Total More Than 1 Months Rent

Landlords can't charge more than 1 month's rent for a security deposit.

Landlords must return the security deposit to the tenant within 14 days after the tenant vacates the apartment. 

If the Landlord is going to retain all or a portion of the deposit, they must provide an itemized statement within those 14 days.

If the Landlord fails to provide that itemized statement, the landlord forfeits the right to retain any portion of the security deposit.

Notice of Lease Termination OR Rent Increase

Landlords must give either 30, 60, or 90 days' notice or a lease termination or non-renewal, or of an increase in rent of 5% or more. The notice require depends on how long the tenant has been living at the premises.

Can a Landlord's Agent Collect a "Broker Fee" From the Prospective Tenant?

In our opinion, no. But this has caused much controversy among the real estate bar and real estate brokers in New York.

New York Real Property Law Section 238-A(1)(a) provides in relevant part that "no landlord, lessor, sub-lessor, or grantor may demand any payment, fee, or charge for the processing, review or acceptance of an application, or demand any other payment, fee or charge before or at the beginning of the tenancy, except background checks and credit checks..."

We believe that the plain language of the law quoted above means that a tenant no longer has to pay a broker fee. A broker's fee seems to fall squarely into the definition of a "payment, fee or charge before or at the beginning of the tenancy." 

In any event, we have not seen this litigated in the Courts yet. But we believe we will have the answer soon. The Housing Courts in the State of New York are going to be very busy in 2021 and I imagine that this is going to be raised by many tenants as a counterclaim or a separate lawsuit against brokers and landlords.

The majority of Landlords in New York are small unsophisticated Landlords. Many of them have been struggling with the administrative requirements of the new law. For example, we have obtained negotiating leverage with Landlords because they served a 30 day notice when they should have served a the 90 day one instead.

Also, it seems very few landlords, even institutional ones, are complying with the new requirement of sending the tenant the notice regarding late rent which has to be served by certified mail. 

As a result, we have noticed an uptick in Landlords and Tenants seeking our advice in drafting a "Surrender & Termination Agreement."