NYC tenant protection laws have been a constant struggle for both landlords and tenants. Almost a century after NYC tenant protection laws were created, they were permanently reformed on June 14, 2019, and these changes were answered just two short weeks later by the Rent Guidelines Board (RGB), which increased rent for the second year in a row by 1.5-2.5%, depending on lease term, for almost 1 million rent stabilized units. While landlords and tenants have different perspectives as to whether or not these new rental reform laws are a win, these sweeping changes have definitely been a hot topic in New York.
So, what do these changes mean for both landlords and tenants in the Empire State?
For landlords, the changes are considered monumental, and many are questioning their sustainability:
For tenants that receive preferential rents, the increase is limited to the increase set by the Rent Guidelines Board.
Landlords can only count $15,000 of individual apartment improvements (IAI)—equating to a monthly increase of only $89 over 15 years, and only 2% of major capital improvements (MCI) can now be passed on to tenants over 30 years. Landlords feel this will severely limit their ability to keep their properties in good repair, which will affect their ability to be competitive and profitable as well as offer their tenants safe living conditions.
Blacklists—lists of non-paying tenants—can no longer be shared among landlords, which affects a landlord’s ability to better screen potential tenants.
Landlords can only use one apartment in a property as their primary residence.
51% of condo tenants, versus 15% previously, must agree to a tenant or co-op conversion AND agree to purchase their units under the new law. This eliminates previous "eviction plans" that allowed non-purchasing tenants to be evicted, and reforms non-eviction plans during the co-op conversion.
In addition to benefiting from the above, tenants can also expect the following:
If rent is over $2,700 and tenant’s annual income exceeds $200,000 two years in a row, tenant may be at risk of losing rent stabilization if the owner petition’s the NY State Division of Housing and Community Renewal.
Application fees cannot exceed $50 per occurrence or 5% of the rent, which is less.
Security deposits cannot exceed one month’s rent, and the process to get a security deposit returned has been simplified.
Landlords must give tenants a 30-day notice if they are not renewing the current lease OR if they are increasing the rent more than 5%.
No rent increases are allowed after 30 years of residency.
Landlords cannot raise rents more than what is allowed by the RGB.
If a tenant is evicted, judges can give the tenant up to a year to find a similarly priced apartment in the same neighborhood, and landlords can pay fines up to $10,000 for an unlawful eviction.
There are many facets of the Housing Stability and Tenant Protection Act of 2019 that need to be considered. As always, if you're unsure of how new laws and regulations might affect you and your units, you should contact your legal counsel.
As changes in the real estate climate continue to shift, questions about the implications for YARDI and MRI users also persist.
The Housing Stability and Tenant Protection Act of 2019: Yardi Users
In addition to the usual benefits Yardi provides—including tracking IAIs and MCIs, renewals and registrations, all things legal, and more, Yardi will be releasing a new plugin that will allow users to implement these new changes for their properties and ensure they are following all the new regulations and laws. When properly implemented, this plugin should take the guesswork and stress out of making sure your properties adhere to the myriad of changes taking place in the rental market.
The Housing Stability and Tenant Protection Act of 2019: MRI Users
While MRI has not addressed this legislation specifically, their Division of Homes and Community Renewal (DCHR) software for New York state addresses compliance concerns for NYC landlords. You can check out their data sheet, found here, to get a better sense of the issues and capabilities. Though the datasheet has not been updated since the fall of 2018, the DCHR software acts as a great starting point to address regulations like the Housing Stability and Tenant Protection Act of 2019.
With constant change comes the need for new updates and information. If you’re interested in finding out how REdirect can help you navigate these new rules and regulations, including updating your customized reports and queries, or installing plugins, contact us today.