The recently passed “Housing Stability and Tenant Protection Act,” has drastically overhauled the fundamentals of landlord-tenant law and practice in the State of New York. While we’re still digesting the impact of these changes, here’s a quick overview of just some of the key modifications:
Landlord Obligation to Provide Rent Receipts and Late Payment Notices
Prior to the Act, residential tenants who paid rent by personal check had to request a receipt from the landlord, each and every month. Effective June 2019, tenants only need to make one request, in writing, and thereafter, a landlord is obligated to provide receipts for the remainder of the lease term. If the check is personally delivered, the landlord must immediately issue the receipt. However, if paid indirectly, (such as online), the receipt must be sent the receipt within fifteen (15) days after payment. [R.P.L. § 235-e(b); R.P.L. § 235-e(c)]
Landlords must now send written notice, by certified mail, to tenants who are five days late with paying rent. No such notice provision previously existed. If a landlord fails to give such notice, the tenants can use that omission as an affirmative defense in a nonpayment proceeding.
Additionally, within the context of a summary proceeding, (whether it be a non-payment or a holdover), “use and occupancy” is limited to the monthly rent previously charged for the apartment. That sum will exclude any fees and penalties tacked onto rent, including late fees. [R.P.L. § 235-e(d); R.P.A.P.L. § 702]
Expanded “Look-Back” Period
Prior to June 2019, a tenant who prevailed in a rent-overcharge proceeding was limited to four (4) years’ worth of overcharge payments. That recovery period has now been expanded to six (6) years. If a landlord is found to have “willfully” overcharged a tenant, the latter may seek “treble damages” for the entire six (6) year period, as opposed to the two (2) year limit that previously existed.
A landlord’s conduct may be found to be “willful” even if any excess is voluntarily refunded or adjusted.
Previously, some landlords were of the view they were only required to maintain DHCR-related records for four (4) years, and such documents were discoverable in any court proceeding. Records dating back further were required to be produced if there was any “indicia of fraud” relating to the landlord’s actions; a liberally applied standard. However, it is now clear, that the D.H.C.R., or a court of competent jurisdiction, may require records dating as far back as “reasonably necessary,” regardless of whether there is an “indicia of fraud.” [E.T.P.A. § 12(a)(1); E.T.P.A. § 12(a)(1)(b)(i); E.T.P.A. § 12(a)(1)(b)(ii); E.T.P.A. § 12(a)(8); E.T.P.A. § 12(a)(9); E.T.P.A. § 12(b); N.Y.C. Admin. Code § 26-516(a); N.Y.C. Admin. Code § 26-516(a); N.Y.C. Admin. Code § 26-516(g)]
Rent-Control Rent Increases
Landlords are now further limited in the increases they can get from rent-controlled tenants. While owners were previously capped at seven and a half percent per year, they’re now limited to the lesser of seven and a half percent or the Rent Guidelines Board (RGB) adjustment average over the preceding five-year period. (The RGB five-year average from 2014 to 2019 for one [1] year leases was three fourths of one percent.)
Rent-controlled tenants are also no longer responsible for heating fuel costs that previously had been tacked onto their monthly rent. [N.Y.C. Admin. Code § 26-405(a)(5)
Summary Proceedings
Prior to the Act, after two adjournments in a summary proceeding, or thirty (30) days from the tenant’s first appearance, a landlord could request that the tenant pay all “rent” or “use and occupancy” from the date of the petition. [R.P.L. § 745(2)(a)]
Now, that adjournment period has been extended to sixty (60) days. A landlord’s postponement requests will not count toward that 60-day clock, nor will an initial adjournment requested by an unrepresented tenant for the purpose of securing counsel. [R.P.L. § 745(2)(a)]
After that sixty-day window lapses, the landlord may file a motion to compel the tenant to pay “use and occupancy” from the date the motion is granted. But, if the tenant raises an acceptable defense - - such as, the landlord is not a proper party; tenant has left the premises as a result of actual, constructive or partial eviction; tenant is a public welfare recipient and claims that the landlord has violated any laws pertaining to building conditions; tenant claims that there’s a housing maintenance code violation; tenant has a colorable claim of rent overcharge; tenant claims the building is in violation of its certificate of occupancy or otherwise in violation of the multiple dwellings law; and/or, that the court does not have personal jurisdiction - - a judge can not direct that any deposits be made. [R.P.L. § 745(2)(a)]
Notices of Eviction
After a landlord prevails in a summary proceeding, a Marshal must post notice on the property sought to be recovered fourteen (14) days prior to a warrant’s execution. (Under the prior law, a Notice of Eviction could run as little as “three days.”) The Marshal must execute the warrant on a business day, between sunrise and sunset. [R.P.A.P.L § 749(2)(a); R.P.A.P.L. § 711(2)]
Court Stays Extended
The new act gives a judge the power to delay an eviction when an “extreme hardship” would result.
While tenants are typically required to pay ongoing “use and occupancy,” as well as any unpaid rental arrears during any “stay period” granted by a court, this relief can now last for up to one (1) year, as opposed to six (6) months.
The considerations in determining “extreme hardship,” now include ill health, significant exacerbation of an ongoing condition, a child’s school enrollment, or any other circumstances that impact the ability of the occupant to “relocate and maintain quality of life.” The court will balance these considerations against the hardship a landlord may suffer if the stay were to be granted. [R.P.A.P.L. § 753].
Attorneys’ Fees
Previously, landlords could recover any legal fees incurred within the context of a residential nonpayment or holdover proceeding. Now, landlords can only collect “rent,” defined in the Act as the “monthly or weekly amount charged in consideration for use and occupancy.” As previously mentioned, the law also now prohibits the collection of extraneous charges, such as late fees and penalties, and also precludes the recovery of legal fees.
While there is currently some uncertainty, we anticipate that these additional charges will likely be recoverable in a plenary action - - in other words, a separate lawsuit. [R.P.A.P.L § 702; R.P.L § 234]
The Act reinforces a tenant’s ability to collect attorneys’ fees. While judges once had discretion to award a regulated tenant reasonable fees and costs, in an overcharge case, courts are now mandated to do so. [N.Y.C. Admin. Code 26-516(a)(4)]
Furthermore, if a tenant “defaults” - - fails to appear in opposition to a nonpayment or holder proceeding - - landlords may not recover attorneys’ fees. [R.P.L § 234]
Conclusion
The outline of changes we’ve provided above is only a summary of just a few of the vast and complex modifications that were made to the law.
Should you have any questions about how these new laws impact you, please feel free to reach out to any one of our capable real-estate attorneys, at 212-619-5400.
In the interim, stay tuned for additional analysis and further developments.
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To view Part I of our series, please use this link: https://www.nyrealestatelawblog.com/manhattan-litigation-blog/2019/july/the-2019-changes-to-new-york-s-landlord-tenant-l/
To view Part II, please use this link: https://www.nyrealestatelawblog.com/manhattan-litigation-blog/2019/july/the-2019-changes-to-new-york-s-landlord-tenant-l2/