New rental laws in New York - What landlords need to know!

New rental laws in New York - What landlords need to know!

You mean to tell me that New York has some of the highest priced areas in the Country AND has some of the toughest laws?

It's a very reasonable question to ask and one that prevents many prospective investors from even considering New York investing. This is especially true for early investors or new investors who don’t have a huge ‘eviction’ or ‘legal fee’ budget.

Some would argue that its best to avoid becoming a landlord in this city altogether and I can’t blame them! 

However, when you add up what you spend to rent an apartment in this expensive city, you’ll eventually begin to think… ‘How?’... How can I successfully invest in New York Real Estate despite these crazy, anti-landlord laws?

What if I'm already a landlord and have implemented operating systems and procedures for my rental properties?

Here are some things to consider!

Inform the Tenant if You are Increasing Rent or Renewing the Lease: If you are planning on increasing rent by more than 5% OR not renewing the lease, you must provide written notice to inform the tenant. 

If the lease terms were for 1 year or less, you need to provide notice 30 days before the lease expires. If the terms are for 1-2 years, notice has to be given 60 days prior to lease expiration. Lastly, if the lease term is 2+ years, landlords are required to provide notice 90 days before the lease expires.

Take Pictures Before the Lease is Signed: Before you sign the lease with your tenant, make sure you document the condition by taking photos. You can’t charge your tenant for the damages they may have caused if you don’t have evidence against them.

Send Notice of a Pre Vacatur Inspection: As the end of the lease is approaching, give your tenant at least 48 hours notice of a Pre Vacatur inspection. This should be done preferably 2 weeks before the end of the lease because the Inspection itself takes around 1 to 2 weeks. 

Give them time to fix the damage in the unit. If they don’t fix the damages, you MUST provide them a detailed statement of the repair costs and return the security deposit 14 days before they vacate. You must have a burden of proof showing that the repair cost is reasonable.

Keep records of everything from the last 6 years: Things to keep track of are - Before/after pictures of the unit, invoices for all maintenance work and repairs, rents received... EVERYTHING! 

Provide Rent Receipts Immediately: If your tenants pay you in cash, immediately provide them rent receipts. Also do so if the request a receipt in writing. Whether the tenant pays the rent directly to you or the agent, they should be given a receipt.

Here are some things to avoid!

Charging too much for a late fee for late rental payments: Landlords can charge $50 or 5% of the monthly rent - whichever is less.

Asking for more than First Month Rent and Security Deposit: Do not collect more than the first month’s rent and security deposit from the tenant at lease signing. Landlords can no longer request additional deposits i.e. - last month, advance rent, or pet security.

Charge more than $20 for a Credit/Background Check: In addition to this, landlords can no longer charge prospective tenants/applicants for - moving, pet fees. The tenant can provide you their own credit and background check if its less than 30 days old.

Do Not Discriminate against a Tenant because of prior landlord/tenant proceedings: Yes, you read that correctly... If your tenant had problems in a prior landlord-tenant case, you cannot use this as a basis for denying their application. Yup... its a thing now!

If you have goals for starting your rental portfolio or you're looking to expand on your existing portfolio, these new laws shouldn't stop you. Being informed will help you avoid the hassle of lawsuits while maximizing your returns on rental property investments.

How do you think these new laws will affect your plans for investing in NY?

Let us know in the comments below!