All Forum Posts by: Lashawn McCauley

@George W. Thanks for the reply and informing me of the old water lines. I have a 3 family in Newark and one of my tenants expressed to me their concerns. Even though the city informed me my property's water line was lead free my tenants were still concerned. 

I attended an NYC Landlord presentation a few weeks ago. Below are some of the changes to NYC laws. Please add to this post or correct any errors I may have written. 

The Housing Stability and Tenant Protection Act of 2019 (TPA) caused many changes in the landlord-tenant rules in NYC. Tenant advocates are happy, while landlords/investors aren’t celebrating.

Below are some of the changes:

Rent stabilization – Almost one million units in NYC are rent-regulated. With TPA in place, these units will have the same rent even if a tenant breaks the lease. Units in the rent stabilization program also can no longer leave the program.

Limits on security deposits – Security deposits can be no more than one month’s rent. This could make it difficult for landlords to have money for damages after a tenant leaves or to cover lost rent on a broken lease.

Notice of rent increase – In non-rent regulated units, landlords must provide a 30-day notice of a rent increase for renters in the unit for less than one year. Any renter in the unit longer than one year, but less than two years gets a 60-day notice.

Evictions – Judges can stay evictions for as long as 12 months if the tenant is unable to locate a comparable place to live within the neighborhood. Judges can also determine how the eviction will affect the family’s education (kids in school) or the tenant’s health and base his or her decision with that information.

Unlawful evictions – Any force or use of unlawful tactics to remove a tenant is a misdemeanor. This can result in fines between $1,000 and $10,000.

Application fees – Landlords may only charge a maximum of $20 for application fees or background checks.

Rent increases – Rent increases have a cap of $15,000 every 15 years, expiring after 30 years. Any major capital improvements made to a building allow a rent increase of a maximum of 2%.

The lead in the water in Newark has caused an uproar throughout the city. Fortunately, government officials have found a resolution in the form of a $120 million bond. This bond is enough to cover the cost to replace the pipes. Government officials claim the financial burden won’t fall on the property owners or investors. Only time will tell on that aspect, but what has this done to Newark as a place to invest in real estate?

Will renters still look at Newark as a place they want to live? Will it send renters fleeing elsewhere? 

In a few years, (they estimate 24-30 months to complete the pipe replacement), 

The city has approximately 18,000 lead-filled pipes to replace. Now the city needs permission to gain access to each of the affected homes. Mayor Ras Baraka is pushing for legislation that would allow the city access to a home without permission. Almost 80% of the residents of Newark are renters. Without immediate access to the landlords, the pipe replacement project could take much longer than the intended 2 ½ years.

As of right now, the system is voluntary – landlords have to sign up for the pipe replacement. If they don’t, that leaves lead pipes in the homes of renters, leaving them vulnerable. The bill itself probably won’t go through until October or November. 

Newark's real estate market prices has been increasing and the city recently announced a plan to develop vacant lots. 

MTV recently hosted the VMA awards at Prudential Center which was a win for the city and an example of Newark as a City on the Rise and potential tourist destination, but this water crisis was like a cloud dimming the sunlight. 

Some companies that perform the credit/ background check charge more than $20. What was the basis for NY to choose that amount as opposed to $30 or $40. There are some realtors who try to make money by charging fees of $120 which is inflated and ridiculous. 

It has an affect on deterring potential renters from Newark and also current tenants are very upset which affects landlords. 

@Ezra N. Here are some links to previous post about investing in Newark, NJ you might find helpful . 

https://www.biggerpockets.com/forums/12/topics/720117-officially-a-first-time-landlord-and-new-homeowner-in-newark-nj

https://www.biggerpockets.com/forums/52/topics/579281-newark-nj-landlord-tenant-court-my-experience

https://www.biggerpockets.com/forums/716/topics/603084-best-zip-codes-in-newark

Make sure your multi family is registered with the state as @Ray Reed  stated. They will ask for this in Landlord tenant court. 

Enforce your late fees and with your tenants. I usually file for the eviction once a tenant is 3 days past due. If they pay then good, you can cancel the court date. Sometimes they need to receive that notice from the city to let them know you are serious. 

@Ray Reed Thanks for the update. 

What is the purpose of the court officer performing the walk through what documents do they provide after the walk through? 

@Kerryanne Henry I recently did another eviction in April and was told you must allow the county court officer to remove the locks from the apartment if you want the eviction to be registered, so when a background/ credit check is done for the person it will show. The tenant I had didn't have any previous evictions but based on my experience with them I think they've been in landlord tenant court previously. 

@Anthony Aiello I have seen the price increase for full gut properties. I was told there's a lot of hedge fund money at the Essex county auctions for properties. When they purchase they aren't always looking for immediate cash flow on each property. I think this is one reason why the competition has increased but I suspect there's others.