New legislation has been making waves throughout the NY Real Estate Market these past couple of weeks. New laws were introduced that would forbid building owners from deregulating apartments, close loopholes that permit them to raise rents, decrease tax incentives for landlords, and protect tenants to the highest degree. Essentially all of this is pretty bad news for landlords, and great news for renters. As someone who is both a landlord AND a renter myself, I thought it may be a good idea to explore what is really going on! As there is a TON to talk about on this topic, I will break this up into 2 separate LTRE posts – don’t want to take up too much of your time today!
So as we do, let’s talk Real Estate, let’s talk THE NEW YORK RENTAL PROPERTY REGULATION SHAKE UP PT 1…
SO WHAT IS GOING ON?
Basically, laws are being put in place to protect tenants. And listen, I am ALL for that. Butlet’s talk about the way in which they are doing so and if this really makes sense.
**Also, FYI this is NOT meant to be a political discussion, but more of a business forum! I am also NOT an expert, and am purely sharing what I have learned and am experiencing. **
LET’S TALK ABOUT HOW THE STATE IS GOING ABOUT THIS…
Rental Regulation Reform
Rental property regulations are being impacted in several ways.
(1) Security Deposits
These are now limited to 1 month’s rent. Personally, I am OK with this. The issue lies if the renter leaves behind significant damage to a unit. One month’s rent may not help cover this cost. This is also a bigger concern for smaller landlords (I am one of those!) who do not have as many income producing units to help cover the costs.
(2) Landlords Must Now Give Notice too
Landlords are now required to provide their tenants with the following notices:Landlords are now required to give their tenants notice if they plan to raise rent by more than 5%. —- OKAY, no problem.Landlords must provide 30 days notice if they do not intend to renew the lease with the a tenant who has a lease length less than 1 year.—- OKAY, no problemIf the current tenant has a lease length longer than 1 year AND has lived in the unit for less than 2 years, the Landlord must provide 60 days notice if they do not intend to renew the lease.—- OKAY, no problemIf the current tenant has a lease length longer than 1 year AND the tenant has lived in the unit for more than 2 years, the Landlord must provide 90 days notice if they do not intend to renew the lease.—- OKAY, no problemLandlords of regulated apartments were already required to give 90- to 120-day notices and must continue to do so if they do not intend to renew the lease.—- OKAY, no problem, they are already doing this.Eviction ProceduresA judge may delay an eviction for up to 1 year, vs the 6 months that was more common before, if the tenant cannot find affordable housing within the same neighborhood after a reasonable search. —- This can absolutely drive a landlord into serious debt. Especially if they rely on the tenant’s rent to pay the mortgage attached to the property. What happens if the landlord is forced to default on his/her mortgage because of this? What if the tenant is a safety risk to other tenants in the building? What is defined as a “reasonable search”? This, to me, is very subjective.A judge may take into affect any health / emotional issues that may impact the tenant due to the eviction. The most notable example is surrounding a child’s education. If an eviction would force a child to enroll in a different school in the middle of the school year, the eviction may be delayed.—- I have a hard time opining on this. I always want what’s best for a child, regardless if I know them or not, and I would not want to drag them into such a situation. But again, this can lead to losing the building all together for the landlord, and in that case, what happen’s to the tenant’s then (not just the one’s being evicted, but all of them)? I would need to know more information on this and what can be done to protect all parties.Unlawful evictions (i.e. illegally locking out a tenant, or forcefully removing a tenant) is now a misdemeanor and punishable by a hefty fine. —- OKAY, no problem. I would never do that!Mobile Homes
This impacts ~200,000 homes in the state of NY. While mobile home owners typically own their mobile unit, they often do not own the land on which they park. Mobile home park landlords can now only raise rent by 3% (max) on an annual basis, 6% if signed off by the court.Other ChangesApplication fees now capped at $20 per applicant.—- Okay, only feedback there is credit check’s can cost way more than $20 but I do not have any strong opinion on that either way. I guess we can call this a business expense now, and loop it into our operating costs?Tenants have 30 days to fix lease violations (vs 10 days under prior regulations).—- OKAY, no problem.Landlord’s can no longer discriminate based on tenant’s prior rental history. —- Here is my issue: (1) I think discriminate is the wrong word to use here. (2) If a tenant is coming from an eviction and is looking to move into your unit next, don’t you think you should be made aware of that? At least for the reasoning behind it? Was the tenant evicted because they were causing harm to other tenants? Did they just refuse to pay rent after moving in? I believe landlords should be privy to this knowledge.If a tenant breaks a lease, the landlord is required to try and rent out the unit vs keeping it vacant and requiring the current tenant to pay rent for the remainder of their lease. —- OKAY, no problem. We are actually doing this right now up in Binghamton!There is SO MUCH going on here in New York with all of these new rental laws – it is crazy. We will talk more next week! This is a totally open forum, so please let us know YOUR thoughts on all of this change!
In the meantime, stay tuned for more changes to come. See you next week!
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