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:
- It is prohibited to deny a tenant based on any involvement in past pending landlord-tenant disputes.
- Landlords are prohibited from charging application fees beyond actual costs.
- Landlords are required to waive fees for background/credit checks if a potential tenant provides a current copy.
- 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.
- 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.
- The same limit (above) exists for security caps. It is cumulative between the prepaid rent and security.
- Landlords are required to provide written receipts upon receiving cash rent (i.e., anything besides a personal check).
- 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.