THE IMPACT OF THE HOUSING STABILITY AND TENANT PROTECTION ACT OF 2019 ON RESIDENTIAL LANDLORDS IN WESTERN NEW YORK

07.30.2019

On June 14, 2019, Governor Andrew Cuomo signed into law the “Housing Stability and Tenant Protection Act of 2019” (the “Tenant Protection Act”). The Tenant Protection Act, which contains a series of sweeping tenant favored regulations and protections, represents a staggering loss to residential landlords in New York State. While prior laws addressing rent regulation have been adopted in New York City and its surrounding counties, the Tenant Protection Act applies to every county in New York State.

The Tenant Protection Act will increase the operating and organizational expenses of residential landlords. Landlords are now prohibited from collecting more than one month’s rent at lease commencement (GOL §7-108(1-a)(a)) or from charging an application fee (with the exception that landlords may charge up to $20.00 for a background and credit check) (RPL §238-a). Additionally, landlords are now obligated to immediately provide tenants with a written receipt of payment for any rent directly received in any form other than the personal check of the tenant, and to maintain such records for at least three years (RPL §265-e).

The Tenant Protection Act will also drastically lengthen the process of eviction. Landlords must now send delinquent tenants a written notice, by certified mail, if the tenant’s rent has not been received within five days of the due date specified in the lease (RPL §§235-e(a) and (b)). The failure of any landlord to comply with this notice requirement will constitute an affirmative defense by the tenant in any subsequent eviction proceeding based on the non-payment of rent (RPL §235-e(d)). Additionally, the required written statutory demand providing delinquent tenants with an opportunity to cure their default has been increased from a three day cure period to a fourteen day cure period (RPAPL §711(2)).

If the tenant fails to cure the arrearage and the landlord commences an eviction proceeding, the trial will not be scheduled until at least ten days after the petition has been served on the tenant (RPRPL §732(1)). The tenant now has the right to request, and the Court shall be obligated to grant, an adjournment of the trial for at least fourteen days (RPAPL §745). If the Court grants the landlord’s request for a warrant of eviction, the officer executing upon the warrant must provide the tenant with at least fourteen days’ prior written notice (an increase from the prior three day period), and the warrant may only be served on a business day (RPAPL §749). Upon application of the tenant, the Court, upon consideration of special circumstances, may grant a stay of the issuance of the warrant of eviction for a period of up to one year (an increase from the prior six month period) (RPAPL §753).

Prudent investors operating in the New York real estate market should critically examine the capitalization rates on all prospective acquisitions of investment properties containing residential dwellings and verify that the economics account for the new increases in landlord operating costs anticipated to result from The Tenant Protection Act.