Major Changes to the NY Rent Regulation Laws

Raising the Rent on Rent Stabilized Units

In general, landlords are no longer able to raise the rent of a rent-stabilized rental unit by 20% when a unit becomes available to re-rent, and the landlord cannot raise rents by using rent increases to mitigate their capital building improvements either. These fees are capped at 2% of the rental fee, not 6% as formerly allowed.

Here’s a little math to drive the point home. If the rent is $5,000 a month for a rental unit, the landlord used to be able to charge capital improvements of $5,000 times 6%, which comes to $300, but now at 2%, they can only charge $100 to pass this fee along to the renters on their properties.

Additionally, landlords can’t overcharge tenants for whenever they improve their rental unit, and there is a cap on landlord fees in this area as well at $89 (not the formerly allowed $1,000), whereby even these charges expire after 30 years of a rental tenancy.

Retroactive Rent Increases are Banned

To date, landlords are now banned from retroactively increasing the rent due. Instead, they must mail a notice of approval to tenants first. The rent increase is temporary and will be removed after 30 years. This negates the situation whereby a landlord decides to increase the rent on a rental unit and states to the renter that the rent is retroactively increased to a prior date.

Limits on Landlord Background and Credit Check Fees

Landlords are not able to overcharge for background fees. The landlord background and credit check fees are capped at $20, and late rent payment fees are capped at $50or 5% of the monthly rent, whichever is less. This will prevent unscrupulous landlords from the practice of overcharging for administrative fees, late payment processing fees, or background and credit checking of the new renters, and any associated fees to utilize these services. In the past, there have been wide discrepancies regarding who could charge, and what fees could go up in price. With the law now stating that there are caps to the fees, all landlords are put on notice that they cannot pad fees to suit and line their pocketbooks.

Individual Apartment Improvements Caps

Starting now, the Individual Apartment Improvements (IAI) are capped at $15,000, and both IAI and Major Capital Improvements (MCI) are temporary for 30 years. There is also a requirement for the landlords to schedule reasonable costs, and a cap for each MIC (as amortized 12 years if fewer than 35 units are applicable). IAI increases are allowed on written and informed tenant consent, and cannot be done in secret without the knowledge of the tenant.

If you are wondering about the fundamentals of New York State commercial landlord-tenant law, then call the office of Michael Mantell, Esq., where we have been caring for clients and their legal needs in the metropolitan New York City area for nearly 50 years. We service the commercial and residential real estate needs of landlords, tenants, and business owners in the NYC region, and offer affordable fees. Call us now at (212) 750-3896 and schedule a consultation regarding your legal issues today.