On June 14, 2019, Governor Andrew Cuomo signed into law the Housing Stability and Tenant Protection Act of 2019. While many of the protections in the new law focus on rent stabilization and rent control for residents in New York City, several key provisions affect Upstate New York landlords with both commercial and residential leases.
Residential Evictions
Landlords have a duty to mitigate damages. In a newly added Section 227-e of the Real Property Law, landlords now have a duty to take reasonable and customary actions to mitigate the landlord’s damage by attempting to rent the premises at fair-market value or the rent paid during the prior tenancy, whichever is lower. If the landlord re-rents the premises, the previous tenant’s lease is terminated upon the effective date of the new tenant’s lease, meaning a landlord can no longer simply fail to re-let the premises and collect damages from the prior tenant through the end of the lease term.
Landlords cannot charge application fees. In a newly added Section 238-a of the Real Property Law, landlords are barred from charging application fees to review, process, or accept an application to lease residential property unless another statute gives the landlord the right to charge such fees.
Landlords can only charge up to $20 for background or credit checks. Under the same section, Real Property Law 238-a, while landlords may still charge a tenant for a background check or credit check, the fee may not be more than the actual cost of the review or $20 dollars, whichever amount is lower. Additionally, if the landlord collects a fee from the tenant to obtain a background check or credit check, the landlord must provide a copy to the tenant.
Landlords cannot demand rent or charge a late fee until the sixth day after rent is due. Tenants also get more time to pay their rent no matter the terms of the lease under the newly enacted Real Property Law 238-a. A demand for rent or a late fee in a residential lease may not be made or charged to the tenant within five days from the date the rent was due. This means that if rent is due on the first, a late fee or demand for rent may not be made or charged before the sixth of the month. In addition, any late fees charged for payment on the sixth day may not be more than $50 dollars or five percent of the monthly rent, whichever is less.
Both Commercial and Residential Evictions
Landlords must give 14 days’ notice before commencing a summary proceeding. Under the prior Real Property Actions and Proceedings Law (RPAPL) 711, where a commercial or residential tenant failed to pay rent under the terms of the lease, a landlord was required to give three days’ written notice requiring either payment of rent or possession of the premises. Now, under the new RPAPL 711, there must be a written demand for rent with at least 14 days’ notice, giving more time to the tenant in possession. However, this rule still only applies where there is a landlord-tenant relationship (typically meaning a lease with the tenant). Rules governing service of a 10-day notice to quit where there is no lease or other landlord-tenant relationship have not changed.
Landlords must serve the petition at least 10 days before a hearing. Under the former RPAPL 733, the notice of petition and petition were required to be served at least five but no more than 12 days prior to the date of the hearing. Now the petition must be served at least 10 days but no more than 17 days before the time to be heard.
A tenant now has 14 days to vacate after notice of a warrant. Under the former RPAPL 749, when a warrant was issued, the tenant had 72 hours to vacate the premises prior to execution. Under the new rules, upon notice, the tenant has 14 days after service of the warrant to vacate the premises before the warrant will be executed by law enforcement.
Taken together, the Housing Stability and Tenant Protection Act of 2019 has extended the time tenants, both residential and commercial, may remain in possession of a premises despite non-payment.
In the case of a residential summary proceeding, if rent is due on the first of the month, a demand for rent or a late fee cannot be charged until the sixth. Then, assuming the residential tenant does not pay, a notice to quit may be sent on the sixth and must give the tenant 14 days without further action under the amendments to RPAPL 711. Only after expiration of the 14 days (or on the 20th of the month assuming consecutive action) may the landlord commence a summary proceeding by serving a notice of petition and petition. However, the landlord must wait at least 10 days before a hearing, bringing us to the 24th of the month. Thereafter, assuming a hearing on the 10th day and assuming a warrant is issued and served the same day, the landlord must wait an additional 14 days before the warrant may be executed, bringing us to the ninth or 10th day of the following month.
The rules are not quite as strenuous for a commercial landlord as the rules do not require waiting six days before serving a notice to quit or imposing a late fee. However, commercial landlords are still bound by the 14-day notice requirement prior to commencing a summary proceeding, by the rule requiring at least 10 days’ notice before a hearing, and by the 14-day warrant execution period, meaning it will now take more than one month to evict a commercial tenant without recourse.
If you have any questions regarding the content of this alert, please contact Anneliese Aliasso, associate, at aaliasso@barclaydamon.com, or Heather Sunser, partner, at hsunser@barclaydamon.com or another member of the firm's Real Estate or Commercial Litigation Practice Areas.