NEW RULES FOR LANDLORDS & TENANTS EFFECTIVE JUNE 2019

On June 14, 2019, in response to a housing shortage that has spanned more than fifty years, New York passed the Housing Stability and Tenant Protection Act of 2019 (HSTPA). HSTPA will bring about broad and sweeping changes to the laws governing many forms of housing across New York.

Those in favor of the HSTPA argue that it is, among many other things, a long-overdue strengthening of tenant protections following decades of landlord abuse. Opponents of the HSTPA argue that it will, among many other things, have a chilling effect on real estate development, curtail residential property owners' incentives to improve their buildings, put mom and pop landlords out of business, and worsen New York's housing shortage, not make it better. Our firm takes no position on the law itself, but instead provides a brief overview of how it will effect landlord and tenant relationships statewide. 

HSTPA is so vast that all of its amendments cannot be covered in a single posting. This is Part 1 of a three part series of posts over the next month or so. Part 1 will focus on the new changes to the Real Property Law. Part 2 will discuss the changes to the Real Property Actions and Proceedings Law and the final part will discuss the changes to the General Obligations Law.

• Notice Prior to Expiration of Lease and of Rent Increase: Month-to-month tenancies could be terminated with service of 30-day notice; no notice requirement at expiration of ordinary lease or if renewal conditioned on increase in rent (RPL §§ 226-c, 232-a, 232-b).

• Duty to Mitigate Damages: Landlords were not obligated to mitigate damages. The apartment could have been left vacant, and tenant would have been liable for rent through end of term (RPL § 227-e). 

• Notice to Tenant for Failure to Pay Rent: Other than statutory 3-day rent demand, nothing required landlord to notify tenant that rent was not received (RPL § 235-e).



• Attorneys Fees, Non-rent Fees, Application Fees: If a residential lease provided for landlord's right to recover attorney fees, a
  reciprocal right was implied at law in tenant's favor. DHCR has discretion to award attorney fees.
  

• Notice Prior to Expiration of Lease and of Rent Increase: 

1. Landlords must notify tenants if the lease will not be renewed or if rent will be increased by 5% or more.
2. Amount of notice depends on length of occupancy or lease term: Occupancy <1 year or lease term ≤1 year → 30 days' notice. Occupancy >1 year <2 years, lease term ≥1 year <2 years → 60 days' notice. Occupancy >2 years or lease term ≥2 years → 90 days' notice; 
3. Notice must specify vacate date.
4. Applies statewide to non-regulated residences; applies to all tenancies, even one-family homes;
5. If notice not given, tenancy continues on same terms until notice is given and required time passes.
6. In NYC, termination notice requires RPAPL 735 service; 
7. Outside NYC, or for commercial tenant, landlord's service method is unclear: RPAPL 735 service is not referenced;
8. Under prior and current law, tenant need not give notice before vacating.
9. RPL § 232-b amended to provide that monthly or month-to-month tenancies outside NYC may be terminated by either commercial landlord or any tenant on 30 days' notice.

• Duty to Mitigate Damages

1. Landlord must in good faith, according to landlord's resources and abilities, take “reasonable and customary” steps to rent the apartment; this is for residential only; commercial leases and licenses not affected;
2. Law overrules Holy Props Ltd, LP v Kenneth Cole Productions, Inc., 87 NY2d 130 (Court of Appeals 1995); 
3. Lease provisions to the contrary are void as contrary to public policy;
4. The person seeking damages has the burden of proof.

•  Notice to Tenant for Failure to Pay Rent: 

1.  Residential and possibly commercial tenants must be notified by certified mail within 5 days that rent was not received on the due date.
2. Tenant may raise as an affirmative defense to a nonpayment proceeding the failure to provide this notice.
3. Landlords must maintain records of cash receipts for at least 3 years; rent receipts must be provided upon tenant's request or if rent is paid by cash or any form other than personal check.
4. If payment made in person, receipt to be given immediately. If payment not made in person, receipt must be provided within 15 days.

• Attorneys Fees, Non-rent Fees, Application Fees: 

1. Attorney fees may not be recovered on a default judgment. 
2. Limits non-rent fees for rental application to lesser of actual cost of background checks and credit checks or $20 (whichever is less).
3. To collect the fees for credit or background checks, landlord must provide the potential tenant a copy of the credit or background check and a receipt from the entity conducting the check.
4. The fee is waived if tenant provides a copy of a credit or background check conducted within the past 30 days.
5. Landlord is entitled to a late fee of the lesser of $50 or 5% of the monthly rent.
6. Tenant has a minimum 5-day grace period to pay rent.

If you are a landlord or a tenant, such a sweeping reform and overhaul to the housing rules is likely going to require a real estate attorney to help you with compliance (if you are a landlord) and to protect your rights if you are a tenant. If you have having difficulty with a housing issues, contact our office to see if we can help you.