New Rent Regulations Guide
This summer there was a huge change made to the rent regulations in New York State. These rent regulation changes mainly affect New York City for the time being, but will now be able to have a broader affect if certain municipalities decide to participate in these regulations. Since there has been a lot of confusion regarding these new rules we thought it would be helpful to put these changes into an easy to read and understand bullet point format.
High Rent Vacancy Decontrol
- Landlords can no longer decontrol units when the rent reaches a certain level, most recently that level was $2,750. This practice had led to the deregulation of approximately 150,000 apartments in the past.
High Income Vacancy Decontrol
- Landlords can no longer decontrol units where the tenant makes over $200,000 in income 2 years in a row.
A.I. or Individual Apartment Improvements
- It used to be that if a landlord made improvements to a particular apartment unit that they would in turn be able to increase the rent for that apartment by a portion of the improvement cost. With this now being removed there is now longer an incentive for the landlord to make improvements to an individual apartment.
C.I or Major Capital Improvements
- When a landlord made improvements to the overall building, for example a new entranceway or new stairwells the landlord was able to increase the rent for all of their tenants by a certain portion of the improvement cost. Under the new law these types of improvements will be limited. The spending is now capped, approvals for work will now be harder to get and if the landlord has any hazardous violations on the building the M.C.I is not allowed.
Vacancy Longevity Bonus
- Before this new law was passed if a rent regulated tenant vacated the unit, based on the longevity of the tenancy the landlord would be able to raise the rent for the new incoming tenant by up to 20%. This is no longer allowed under the new rent regulation laws.
- If a landlord has given a tenant a preferential rent the landlord is no longer able to increase that tenant up to the legal rent when they sign a lease renewal. The landlord will continue to have to offer the tenant their preferential rent plus the rent guideline board yearly increase. When the unit becomes vacant and a new tenant comes in that will be when the landlord can raise the rent to the legal rent level.
Market Rate Units
- These are units that will remain available to the private market without any rent regulations. They are unaffected by the new laws.
- These are one of two types of rent regulated apartments. Rent controlled apartments are in buildings built prior to 1947 and had to have had a tenant or family member live there since 1971. When these types of units become vacant they can be rented at free market. When under rent control the tenant cannot be evicted and the rent is very limited in what can be charged.
- This is one of two types of regulated apartment units. These apartment units are generally in buildings that consist of 6 or more apartment units in a building built before 1947 and leased after 1971. They are also in newer buildings that received tax breaks. According to the new rent regulation laws rent stabilization is no longer bounded by geography. Any municipality with a vacancy rate of 5% or lower can enact rent stabilization rules.
Rent Hikes (based on building improvements)
- Due to the new laws enacted landlords are no longer able to raise their tenants rent for building improvements by 6%, instead they are capped at 2%.
Rent Guidelines Board
- This is the agency that determines the allowed annual increases in rent for rent regulated tenants. The will determine an increase based on a one year renewal or a two year renewal. This agencies board members are appointed by the mayor of the City of New York. Their decisions on rent increases extend beyond the city into any municipality that has rent regulation.
- The new law states that landlords are no longer allowed to ask for more than one month’s rent in the form of a security deposit. The new law goes on to state that the security deposit must be returned within 14 days of the tenant vacating the apartment. If any money is withheld the landlord must provide an itemized list of deductions.
Owner Use Loophole
Under the new rent regulation laws owners will no longer have the right to remove tenants in multiple apartments for their own use. In addition, tenants that have live in their apartment for more than 15 years are protected from being removed. Owners who claim the need to occupy one of their apartments and remove a rent stabilized tenant will be made to show they had an immediate and compelling necessity.
Affordable New York Housing Program
- This is a program that originally provided developers a tax exemption if they reserved up to 30% of their apartment units for their project to remain affordable and become regulated. The remaining units would become free market. Now, the new law will give that same tax exemption except the 70% of the units the developer is allowed to lease at market will become regulated from that point forward.
- A blacklist is a record landlords keep of tenants that have been sued in housing court previously. This practice normally makes a tenant who has been evicted or had a non-payment issue more difficult to find an apartment. Under the new law this practice is no longer allowed.
Statewide Housing Security and Tenant Protection Act
- This new law will be established to protect tenants against problems including tenant blacklist and unlawful eviction, which are both illegal under the act. It will also require landlords to notify tenants if they increase their rent by more than 5 percent or do not plan to renew the tenant’s lease, and ensures more time in eviction proceedings. The law will extend to all renters throughout the state, not just tenants of rent-regulated buildings.
- Now a crime under the new legislation, a landlord will be charged with a misdemeanor between $1,000 and $10,000 per violation of a forceful eviction or illegal lockout of a tenant.