On June 11, 2019, New York passed the “Housing Stability and Tenant Protection Act.” This bill was designed to give tenants greater rights and protection.

The new law has important implications for both landlords and tenants. It changed landlord-tenant law regarding security deposits, application fees, screening requirements, late fees, grace periods, and notice for non-renewal or for raising the rent. Let’s take a closer look.

The New York Housing Stability and Tenant Protection Act of 2019

Security Deposit

While landlords used to be able to charge any amount of security deposit for properties not under rent regulation, the new law limits the deposit to one month’s rent.

The deadline for returning the deposit has also changed. Landlords used to have a “reasonable amount of time” to return the deposit. Now, the deposit must be returned and itemized within 14 days of tenant move-out.

For other aspects of the deposit, the law remains the same. If the landlord places it in a bank or institution, they must still disclose the name and address to the tenant.

Application Fees

Application fees are now limited to the cost of screening or $20, whichever is less. This is to prevent landlords from charging more than the actual cost of tenant screening.

Tellus Tip

New York landlords can always choose a free screening service like Tellus in order to comply with the law and still get great results.

Landlords must waive the fee if applicants provides a copy of a background or credit check that was performed within the last 30 days.

Screening Requirements

Landlords can no longer deny tenants on the basis of the tenant being involved in prior landlord-tenant disputes. This law applies even if the tenant was evicted, taken to small claims court, or is in the process of having legal action served against them by a former landlord.

Landlords who reject applicants based on prior rental history may be fined anywhere from $500 to $1000. Landlords who request screening reports should be careful when rejecting applicants. Part M §5.227-f of the law states the following: “There shall be a rebuttable presumption that a person is in violation of this section if it is established that the person requested information from a tenant screening bureau relating to a potential tenant or otherwise inspected court records relating to a potential tenant and the person subsequently refuses to rent or offer a lease to the potential tenant.”

In other words, if a landlord rejects a tenant with a screening report, it’s important to make sure it’s for legal reasons, such as credit score, debt, or criminal background. Giving each applicant a reason for rejection can help lessen suspicion that the rejection was based on prior rental history.

Late Fees

Late fees used to not have a cap, and the only limit was the landlord’s discretion. With the new law, late fees cannot be more than $50 or 5% of the monthly rent, whichever is less. This can only be a one time fee for each rental period.

Mandatory Grace Period

A grace period is the amount of time before a late fee takes effect. Not all states require them, but New York now requires a 5 day grace period. This means that if rent is due on the 1st, a tenant has until the 6th to pay and still fall within the grace period (5 days). The landlord would not be able to charge a late fee until the 7th.

Notices for Non-Renewal or Raising Rent

Landlords used to have more flexibility when communicating with their tenants about renewal and rent increases. With the new law, New York landlord must adhere to stricter deadlines when choosing not to renew a lease or when making a rental increase equal to or greater than 5%.

The amount of notice required depends on the length of a tenant’s lease and how long they have lived on the property.

Amount of Notice Number of Years Tenant Has Lived in the Unit Length of Lease
30 days < 1 Year < 1 Year
60 days 1 year to < 2 years 1 year to < 2 years
90 days 2 years or more 2 years or more

When a tenant meets requirements for different levels, always choose the longest amount of notice. For example, if a tenant just moved in 9 months ago but they have a year long lease, landlords are required to give 60 days’ notice for both non-renewal or raising the rent.

Similarly, if a tenant has a one year lease, but has lived in the apartment for 3 years, landlords must give 90 days’ notice for both non-renewal or raising the rent.

Final Word

Regardless of how you feel about the new landlord-tenant laws in New York, it’s important to follow them. Having a basic understanding of the changes will help keep you out of legal trouble and offer a smoother rental experience for both landlords and tenants.