Housing Stability and Tenant Protection Act

By now, I’m sure you’re well aware that on June 14, New York State passed the Housing Stability and Tenant Protection Act of 2019. The new laws are big news. The 74-page Act involves the following changes to protect tenants:

  1. It is prohibited to deny a tenant based on any involvement in past pending landlord-tenant disputes.
  2. Landlords are prohibited from charging application fees beyond actual costs.
  3. Landlords are required to waive fees for background/credit checks if a potential tenant provides a current copy.
  4. Landlords may not demand payment, fees, or charges for late payment within five days of rent due date and such late fee shall not exceed the lesser of $50 or 5% of monthly rent.
  5. Security deposits are limited to one month’s rent and must be returned within 14 days of the end of occupancy. Tenants have the right to ask for a walkthrough inspection with the landlord before and at the end of occupancy.
  6. The same limit (above) exists for security caps. It is cumulative between the prepaid rent and security.
  7. Landlords are required to provide written receipts upon receiving cash rent (i.e., anything besides a personal check).
  8. No fees may be charged to receive or review applications, except for background/credit checks, including by cooperatives, who have proprietary leases with their shareholders (not applicable to condo applications by Boards of Managers).

FURTHERMORE, what’s the word on the street/in the real estate industry about the new rental laws? What are developers/landlords saying regarding the new rental laws? How do you think this will affect the market both from supply and demand? Is this going to have a major impact on the rental market or will it just be a momentary blip and why? Do you think more people will rent because of the new rules?
In general I believe it is good to protect tenants from hidden fees and perhaps to limit fees allowed. Having said that, I don’t foresee managing agents taking a pay cut. In my opinion, they are already the hardest working yet least paid in the industry. These fees will have to be paid from the owners/landlord, which in turn, will lead to higher rents. As such, the tenant ultimately pays for it anyway. 
From my perspective, the old way was similar to buying a TV upfront. Now, by law, they have to do a lay-away plan.

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