Importance of the Tenant Protection Act

Many clients contact us with questions about the Housing Stability and Tenant Protection Act of 2019. Is this new law hurting tenants? And if so, how?

There are many issues involved, not the least of which is that many marginal tenants may have a harder time with applications. Landlords may not take chances on them. Discrimination around emotional support animals or source of income can also be a problem.

The new law, which went into effect on June 14, 2019, affects all stages of the landlord/tenant relationship: screening, the leases, evictions, and post-evictions, to a great extent. Additional provisions that went into effect in July and October involve civil and criminal penalties. Landlords can face up to 1 year in jail and $10,000 fines for unlawful evictions, if you attempt a self-help eviction rather than go through the courts.

Many of these provisions don’t make any sense to long-time professionals in this field. They did not consider the consequences of these laws. They just went ahead and passed these laws, possibly to overcompensate for some abuses by landlords in the past. There are many unanswered questions about these laws. They don’t specify, for instance, whether some of the provisions apply to commercial properties, also. There’s still a lot to be interpreted, and many people have questions.

Tenant Screening: Landlords can no longer charge an application fee. You can only charge for your actual cost of credit reports, not to exceed $20. You cannot charge the $20 unless you provide the tenant with a copy of that report and proof that you paid at least $20 for that credit check. No application fees can be charged any longer. You can only charge for your actual cost of getting a credit report, not to exceed $20.

Blacklisting: Blacklisting is now prohibited. Usually, a tenant’s past eviction history is pretty predictive of his future and probability of being evicted, but you can no longer consider past evictions in screening tenants. What’s more, the courts can no longer sell this information to the credit agencies. If you’re using any of these screening services, there will be a presumption that you’re turning down a tenant based on their prior evictions. You may still have other reasons, such as bad credit, but the burden of proof will be on you.

Late Fees: As far as leases go, late fees cannot be more than 5% of the rent or $50 maximum. You cannot have any daily fees. For late fees for manufactured home parks, you cannot charge more than 3%, and that would be after the rent is 10 days late.

Security Deposits:, In the past, I’d recommend that you charge more than a month’s rent with troublesome tenants because usually it’s impossible to collect anything from tenants once they’re out. Now there’s a limitation on security deposits, stating that a deposit cannot exceed one month’s rent. There are other provisions, too, including one that states you must return the security deposits within 14 days after they vacate the apartments. If you’re deducting anything and compiling an itemized list of what’s being deducted, it will be difficult to figure out all your estimates within 14 days. You can still deduct damages beyond wear and tear, unpaid utilities, storage of the tenant’s belongings.

First and Last: You can no longer collect first and last month’s rent upfront. I used to recommend you don’t give them keys until they’ve signed the lease and paid the first and last month’s rent. Per the new law, rent’s not due until the first day of the lease term. They also have provisions in the law stating that if a tenant moves in in the middle of the month, they don’t have to pay their prorated amount until the first of the next month.

Cash Receipts: The next provisions address cash receipts. They are now reinforcing a previously existing requirement that states that if a tenant pays with anything other than a check, that you have to provide a receipt. You have to keep those rent receipt records for three years now. If someone’s paying by check, they can also request a receipt. If they mail in a check, you have to send the receipt within 15 days. If they pay via automatic ACH, that would constitute a receipt if they’re getting one electronically.

Move-in Inspections: Landlords now have to offer tenants a move-in inspection before they take occupancy of the apartment. If they note anything that needs repairs, you have to prepare a written agreement about what else has to be required. I’ve always recommended move-in, move-out checklists. I recommend those still.

Move-out Inspections: Landlords are now required on 48 hours’ notice to notify the tenants that they must be given an opportunity 7 to 14 days before the end of the lease term to do a move-out inspection. This is even before they’ve moved out or are getting ready to move out. Then, when you do that inspection, the landlords have to prepare an itemization of what they’re going to be deducting from the security deposit and give the tenant an opportunity to correct those defects or damages. If you fail to do this, you can be sued for actual damages plus punitive damages of two times their security deposit.

Terminating Month-to-Month Tenancies: There are new notice requirements regarding terminating month-to-month tenancies or even fixed term tenancies. In the past, you didn’t have to notify the tenant if a fixed term lease was ending and you weren’t going to renew it. Now, for fixed-term leases, you have to give them notice if you’re not going to be renewing the lease or month to month or if there’s going to be a 5% rent increase. If the tenant’s been there for less than a year, month to month, you have to give them a 30-day notice, if you want to terminate. If it’s less than 2 years, between 1 and 2 years, you have to give them 60 days’ notice of terminating the lease.

For non-renewal of a fixed-term lease, if they’ve been there for more than year but less than 2 years, you‘re going to have to notify them 60 days in advance of not renewing your lease. If you don’t do that, they have a right to stay on beyond that fixed term month to month until you give them proper notice. If a tenant has resided there 2 or more years, you have to give them a 90-day notice that you’re terminating or not renewing the lease. The law is rather unclear on whether notice has to be served by a process server or if it can be served by you.

Non-Payment Notices: For nonpayments in residential units, before you serve any nonpayment notices, you have to send a certified letter saying rent is due on the sixth day or after of nonpayment of rent.

Defining “Rent”: The definition of rent has been changed, too. I used to recommend that you have clauses in your lease about added rent stating that, if they didn’t pay late charges, or attorney’s fees, or repair charges, you could evict them on those grounds. You cannot no longer have added rent charges of this type. The only thing you can ask for during evictions is the base rent. You cannot include late fees, utility fees, and so forth.

Duty of Mitigation: Previously, there was a duty of mitigating your damages if the tenant breaches a lease and moves out early. As a result of the new law, with regards to a residential property, you have a duty to make reasonable efforts to try to re-rent that apartment before you can go after the tenant for your loss of rents for breaching that lease. You can only recover the fair market value of the rent or the lease amount.

Evictions: The law also defines new time periods for serving your papers with evictions. The time period used to be 5 to 12 days. Now it’s 10 to 17 days. You cannot serve the papers on the tenant any earlier than 10 days before the court date or any later than 17 days before the court date. Previously, you could demand that the tenant answer in writing within three days before the court date. There is now no advance answer required by the tenant before the court date.

If the tenant pays the rent before or at the court date, then the eviction should be withdrawn. The warrants of eviction used to terminate the landlord/tenant relationship. Now, the landlord/tenant relationship continues beyond when that warrant’s issued. The tenant no longer has to come up with the late fees and maybe not even the attorney’s fees to stop that eviction.

Retaliation Defense: The retaliation defense used to be only applied to hold overs. In the past, if you tried to evict a tenant within six months of when they complained to some governmental authority, health department, or building zoning people, there was a presumption that you were evicting them in retaliation for exercising their rights. Now that retaliation defense has been expanded in two ways: it’s expanded to one year and also applies if the tenant complained to you about habitability issues. Tenants no longer have to complain to a governmental authority. This is going to apply both to non-payment proceedings and to hold over proceedings. The New York State Attorney General can enforce that, and there can be fines up to $1,000 per violation.

Rent Deposit Orders: Rent deposit orders, in which a landlord could ask the tenant to have to deposit their rent during the pending of the proceedings, are still permitted, but are a lot tougher to get now. The landlord can’t request one unless there’s been at least 2 adjournments or 60 days have passed by.

Unlawful Evictions: Under previous law, it was still was a criminal offense to evict someone unlawfully, and sometimes landlords did get charged with burglary or larceny for breaking into tenants apartments and removing property or tossing personal property into the streets. It is now a Class A misdemeanor, which is punishable by up to $10,000, 1 year in jail, and there are fines of $100 per day if you hold on to a tenant’s property. As far as attorney’s fees go, you used to be able to get money judgements for attorney’s fees as long as a tenant was personally served. Now they will not award attorney’s fees if the tenant defaults. No matter how the tenant was served, if the tenant does not show up in court, you cannot request a money judgement for attorney’s fees, and you won’t be able to get judgements for late fees. You’ll have to go to small claims court for that and some of these other charges, including late fees, repair charges and so forth.

Warrants: There have also been a number of changes to warrants. The law has been changed so that warrants previously used to sever the landlord/tenant relationship now allow the relationship to be reinstated. Warrants must be executed in 14 days, and they can only be served on Monday through Friday.

The courts have various options when it comes to staying the warrant. The warrants can be stayed for up to one year for hardship or health reasons, if the tenant doesn’t want to relocate their kids to another school or has an illness, for example. As long as the tenant’s not being evicted for some objectionable behavior, they could stay that warrant, meaning that they’d be able to stay in there for another year. They would have to pay, however.

Another change too is, if you’re evicting a tenant for some objectionable reason defined in your lease and they cure that objectionable reason (having a pet or having a pigsty), they will be reinstated as the landlord/tenant. They have 30 days now to cure that reason. They can also have the warrant vacated if they deposit with the court the rent that’s due up until the time prior to when the warrant was executed, 14 days.

Contact our experienced Buffalo Landlord Tenant Attorneys for any questions or further guidance.  Let our experience work for you.