Is It Ligal For A Landlord To Register The Social Security Of All The Occupant Of The Aprtment

NY's Housing Stability and Tenant Protection Act of 2019 Part III

The authors thank Poughkeepsie City Court Guess Frank M. Mora for his comments on Part Three of this article and NYC Housing Judge Michael L. Weisberg for his comments on all three parts of this commodity. Approximate Lebovits, Mr. Howard, and Guess Weisberg are co-authors of the State Bar'southward forthcoming 12th edition of New York Residential Landlord-Tenant Law and Process.

In Parts I and 2 of our serial, we discussed how the Housing Stability and Tenant Protection Act of 2019 (HSTPA¹) has dramatically altered New York'south residential-rental landscape. Part I (91 Northward.Y. St. B.J. 35 (Sept./October. 2019)) outlined the law before and afterwards HSTPA. Office Two (91 N.Y. St. B.J. 26 (Nov. 2019)) focused on rent regulation. This concluding office of our 3-part serial covers the residuum of HSTPA.

Historically, changes in New York landlord-tenant law focused on the hire-regulation scheme. Only hither and at that place did the Legislature amend laws pertaining to unregulated units or how courts must adjudicate eviction actions and proceedings. HSTPA has changed that history. To the tenants' benefit and the landlords' burden, the Legislature has amended many parts of the Real Property Police force (RPL), the Real Property Actions and Proceedings Law (RPAPL), and the General Obligations Law (GOL), starting with how tenancies are created and catastrophe with how tenants may be restored to possession after eviction.

SECURITY DEPOSITS AND PRE-PAID Hire ARE LIMITED TO ONE MONTH'S RENT

Although security deposits have long been express to one calendar month's rent for rent-stabilized tenants, HSTPA amended the GOL effective June 14, 2019, to extend this limit to unregulated tenants statewide. The practice of requiring pre-paid hire, typically as the "start and last months' rent," is now prohibited. The broad language of the new limitation includes "advances" too as deposits. Some landlords argue, yet, that with the word "or" in GOL § 7-108 referring to "deposit or advance," first and last months' rent are still allowed, because information technology is payment for electric current use and occupancy

The amended GOL now likewise provides for a mandatory inspection process. Landlords must give tenants an opportunity to inspect the premises earlier they take occupancy. The parties "shall" then execute a written agreement noting any conditions. The law limits the admissibility of this agreement to a tenant's action to recover a security deposit and only as prove of conditions at the start of the tenancy. Tenants may not use the agreement to establish the existence of violations in an HP (repair) proceeding or to assert a warranty-of-habitability breach in a nonpayment proceeding. Similarly, a landlord may not apply the agreement to impeach a tenant's testimony at an abatement hearing asserting a habitability alienation.

A landlord must again notify the tenant of the right to inspect the premises with the landlord 1-2 weeks before the tenant vacates. For a landlord to retain any portion of the security deposit, the landlord must, after the vacatur inspection, give the tenant an itemized statement specifying any repairs or cleaning needed to give the tenant an opportunity to cure the conditions.

Under the former law, landlords had to render a security deposit within a "reasonable time," meaning a calendar month or two. The law now provides that if whatever portion of the security deposit is retained, the landlord must provide (i) an itemized statement of the claimed atmospheric condition within xiv days later on the tenant vacates and (ii) any remaining portion of the deposit. A landlord that fails to comply forfeits any merits to the deposit.² The new law also narrows what may be withheld from the deposit to include "reasonable" costs due to nonpayment of rent or utility charges, damage beyond ordinary wearable and tear, and moving and storage of the tenant's belongings. Notably excluded are additional rents such as late and legal fees. Landlords have the brunt of proof to justify their memory of a security deposit, and the GOL now provides for punitive damages of up to twice the amount of the deposit for whatever willful violation of its provisions.

These changes are welcomed by tenants, who have long flooded the halls of small-claims courts with complaints that their landlords wrongly withheld their security deposits or inflated and fabricated repair costs to retain their deposits. But prospective tenants with no or poor credit history, newcomers to New York, and students enrolled in New York's many universities might exist collateral damage of the new laws. Landlords might be unwilling to rent to them without the additional protection of an increased eolith or pre-paid rent. Business reasons often deter landlords from accepting a guarantor rather than security deposits and pre-paid rent. Landlords are already testing culling security measures, such as requiring that tenants provide a bond to ensure payment of rent and a guarantor to pay an additional security deposit. The Division of Housing and Community Renewal (DHCR) has issued guidance since HSTPA's passage prohibiting landlords from demanding that a guarantor "or whatever 3rd party" pay more than i calendar month'south security,³ just this guidance applies but to rent-stabilized tenants. Time will tell whether courts follow the DHCR's lead in determining that the amended GOL prohibits using these security measures with unregulated tenants.

Landlords maintain that xiv days is too short to inspect the premises, prepare an itemized statement, and render any uncontested portion of a deposit. Landlords also debate that the inspection process is unworkable, considering HSTPA requires that the landlord and tenant reach an agreement specifying conditions in the premises merely provides no guidance about the course or content of the understanding or how the parties can proceed if they cannot agree. The statute requires that the initial inspection occur after the charter is signed, thus binding the parties to a contentious landlord-relationship from its inception. Some landlords will endeavour to avoid this dilemma by holding the inspection before the lease is executed, but that might cause tenants to avoid raising conditions rather than gamble having the landlord determine not to rent to them. Some landlords and tenants, we hear, are already contracting around GOL § 7-108(c) with language in which the tenant waives this inspection.

Landlords also object that the penalties for violating the new law are not limited to failing to return a security eolith simply besides seem to apply to any lesser violation, such every bit scheduling the final inspection outside the statute'south one-week window. because no stardom is made between security deposits and pre-paid rent in imposing punitive damages, moreover, the potential liability could be high. In the case of a foreign resident, for instance, in which a landlord requires a year's pre-paid hire, this exercise could outcome in liability equal to two years' rent.

Under RPL § 235-e, once a tenancy is in effect, a tenant who demands rent receipts must get them. The receipt must include the appointment, amount paid, identity of the premises, and menses covered. If the payment is fabricated personally, the receipt must exist given immediately. If the rent is paid in another manner, the receipt must exist provided within fifteen days. Once a receipt is demanded, the obligation to provide receipts continues for the life of the tenancy. Landlords must maintain records of cash payments for three years.

THE RETALIATORY EVICTION PRESUMPTION HAS BEEN EXPANDED

RPL § 223-b protects tenants exercising their right to mutter to governmental agencies, enforce their charter rights, and join a tenants' organization. Before HSTPA, landlords who commenced a holdover proceeding against a tenant within vi months of exercising these rights created a rebuttable presumption that the proceeding was commenced in retaliation for the tenant'due south activeness.

HSTPA expands the telescopic and enforcement of RPL § 223-b, enlarging the time period during which the presumption applies from vi months to a yr and extending the presumption from holdover proceedings to nonpayment proceedings and also to "unreasonable" rent increases. Previously, the law covered only complaints of housing-code violations to enforcement agencies. HSTPA now covers habitability complaints, too. And tenant complaints are now protected if they are made to the landlord or its agent. In one case a tenant raises a retaliatory-eviction claim, the landlord bears the burden of establishing a non-retaliatory motive for an eviction proceeding or raising rent. The prior law required simply that the landlord provide a "credible caption." A landlord that fails to rebut the presumption of retaliation tin be required to offer a new lease or lease renewal of upwards to a year with merely a "reasonable" rent increase. Additionally, a landlord could exist liable for chaser fees if the tenant seeks damages in a ceremonious action.

Tenants applaud the extension of RPL § 223-b. They debate that the former statute assumed, incorrectly, that tenants, including those who do not speak English language, were informed of their rights and somehow knew most governmental agencies tasked with enforcing their rights. The reality is that many tenants without heat or hot water know no selection but complaining to a landlord. HSTPA now bars unscrupulous landlords from retaliating against these tenants. Similarly, tenants argue that by including complaints of the breach of the warranty of habitability, HSTPA recognized that although the Housing Maintenance Code establishes minimum housing standards, New York police force affords tenants the broader balls that the premises be "fit and habitable."

Opponents of the new statute decry it every bit a capricious extension of RPL § 223-b that prevents ane incorrect by perpetrating some other. Landlords debate that protections against unethical landlords are warranted but that HSTPA punishes landlords for exercising legitimate rights. By requiring a landlord to prove a non-retaliatory motive for a nonpayment proceeding, HSTPA rejects the notion that not paying rent is inherently a sufficiently non-retaliatory motive to commence a nonpayment proceeding. Landlords also believe that HSTPA will incentivize tenants to make frivolous habitability claims. Under the new police force, a tenant might complain about a noisy refrigerator to immunize them against an eviction proceeding for a year. Because a landlord is not always notified of a tenant complaint to a governmental agency, particularly if the complaint does not outcome in a violation, landlords might too be saddled with a presumption of retaliation if it commences an unrelated eviction proceeding, even if the landlord had no knowledge of the complaint. Landlords argue against what they say is the inequity of a statute that permits a finding of retaliation without knowledge of the acquit confronting which the landlord is presumed to take retaliated. This inequity flows from an alleged double standard in the new police force, which requires merely a "proficient faith" complaint by a tenant, without mandating an equivalent inquiry into the landlord's "expert faith" intent in bringing the eviction proceeding before the presumption of retaliation attaches.

Ambiguities abound in the amended RPL § 223-b. The statute provides no guidance most how landlords may rebut the presumption or whether, in addition to the underlying basis for the eviction proceeding, a 2nd not-retaliatory motive is required. It is as well unclear what function the timing of the complaint plays in triggering the presumption of retaliation. Will the presumption use if the tenant fails to pay hire or is guilty of objectionable conduct, but makes a habitability claim before the landlord tin can commence an eviction proceeding? By requiring only a "good-faith" complaint, the statute focuses on the tenant'southward subjective intent in complaining without addressing whether the complaint is objectively valid. Tenants might believe, incorrectly merely in good faith, that they are entitled to choose the paint color when the landlord repaints the flat. Does the tenant nevertheless go the benefit of the presumption of retaliation if the landlord commences a nonpayment proceeding after the tenant withholds hire in objection to the paint color? Finally, offering a new lease with an "unreasonable" rent increase is now a prohibited retaliation, but HSTPA does not specify a standard or whether the standard should be determined from the perspective of landlord or tenant. Tenants will argue that whatsoever increase be limited to a per centum of the current rent, but landlords volition retort that information technology should exist ready by the marketplace, even if information technology results in a large increase over the existing hire. The courts will grapple with the amended RPL § 223-b for years.

BLACKLISTS HAVE BEEN BANNED

The abusive use of then-called tenant blacklists in leasing practices has been widely publicized. Blacklists are lists of tenants named as respondents in Housing Court litigation. Landlords accept used the lists to screen potential applicants.⁴ These lists were ofttimes misleading; they provided minimal information about the proceeding or its outcome, including whether the tenant essentially prevailed or had a legitimate footing for litigating. Tenant advocates found these blacklists bloodcurdling considering they came from data compiled and sold past the Unified Court Organisation. HSTPA seeks to adjourn the apply of blacklists by forbidding the denial of a rental awarding on the basis of past or nowadays landlord-tenant deportment or RPAPL Art. vii. summary proceedings. A rebuttable presumption arises that HSTPA has been violated if a landlord seeks information from a tenant-screening website or inspects court records. The landlord has the burden to provide an alternative reason for rejecting a tenancy. HSTPA now besides forbids the Unified Court System from selling residential tenancy and eviction data.

While tenants' reception to the ban has been favorable, tenants are concerned that enforcement will be ineffective. New York's Attorney General has enforcement powers, and using a blacklist carries fines of between $500 and $one,000 per violation. But no private cause of action is bachelor. Tenants worry that the AG's resource will be bereft to end what they believe is the widespread employ of blacklists. Additionally, tenant advocates mutter that blacklists will even so use out-of-state.

In the meantime, landlords have voiced their business organization that HSTPA has hamstrung them from filtering prospective tenants who have histories of objectionable beliefs or who chronically fail to pay hire. Landlords also argue that HSTPA blindfolds from examining data regarding potential threats or nuisances that tenants may pose to other tenants while exposing them to liability to other occupants if the tenant deals drugs from the apartment, throws loud parties late at night, sets fires in the building, or is hostile to neighbors. Furthermore, landlords fence that nothing is incorrect in refusing a tenant based on past defaults in paying rent.

To the extent that the blacklist ban addresses real abuses, landlords maintain that HSTPA has provided a remedy ill-fitted to the problem and that a meliorate solution would take permitted using records of holdover proceedings if the tenant was evicted for objectionable deport or a judgment was entered against a tenant in a nonpayment proceeding without a finding that the tenant was entitled to an abatement. HSTPA was intended to protect tenants involved in Housing Courtroom disputes because they needed repairs. Merely its actual effect, landlords say, is to prevent them from considering courtroom records showing that the tenant was evicted for illegal activeness or other legitimate reasons.

NOTICE IS At present REQUIRED TO RAISE THE RENT FOR UNREGULATED APARTMENTS; NEW Fourth dimension PERIODS TO End MONTH-TO-Month TENANCIES

Prior to HSTPA, a month-to-month tenancy could be terminated with a 30-day notice. If a tenant held over at the end of a fair-marketplace lease, a proceeding could be commenced without a predicate notice if no rent was accustomed after the charter expired. HSTPA apology the RPL to require that if a residential landlord does not intend to renew a lease, or intends to raise the rent past v% or more, the landlord must notify the tenant of the rent increment or vacate date. The discover required is determined by the length of the tenancy or occupancy: upwardly to a year, the tenant must exist given 30 days' notice; between a year and two years, the tenant must be given 60 days' detect; and two years or more, the tenant must be given 90 days' notice. If a landlord fails to provide the notice, the tenancy will continue on the same terms until the proper detect is given and the required fourth dimension passes.

In New York City, delivery of the notice must be made by service under RPAPL 735.⁵ HSTPA does not gear up along a service requirement outside New York Urban center, but some landlords will deem it prudent to effectuate RPAPL 735 service to avoid move practice on the issue.

Under current and prior law, New York City tenants are not required to provide written notice before vacating. Outside New York City, a tenant must give a month'due south notice to terminate a month-to-month tenancy, but the notice need not be in writing. The effective date for these provisions is October 12, 2019. Some landlords and tenants are using their correct to contract to waive or change RPL § 232-b with charter clauses allowing tenants to terminate their tenancies with at least two month's written notice.

Landlords, particularly smaller landlords, mutter that the new law forces them to choose betwixt regaining an apartment and receiving hire. It is common for a tenant served with a termination discover not to pay hire. If a 90-day notice is required, the hire will not be paid for the next three months. Given HSTPA'due south other provisions, in which tenants have a right to adjourn a proceeding, it might be 5 months or more than in some parts of New York before a landlord tin seek a deposit of prospective rent. Every bit to the 5 months non paid, a landlord might obtain a money judgment, only it might exist from a judgment-proof tenant. Landlords volition nevertheless be able to bring a nonpayment proceeding, only landlords argue that this adds to the burden and expense of removing tenants.

EXPANDED TENANTS PROTECTIONS AND AMENDMENTS TO THE RPAPL INCREASE PAUSES Before, DURING, AND AFTER EVICTION PROCEEDINGS

I. Pauses Getting to Court

Changes to the RPL aggrandize the discover requirements to cease month-to-month tenancies and provide pregnant notice requirements for unregulated tenants. Only HSTPA simultaneously passed comprehensive reforms to the RPAPL, the statutory authority governing summary-eviction proceedings. The Legislature enacted these pauses (landlords might call them "delays") to foreclose evictions or to slow them down – or at least to postpone the life-crushing consequences of an eviction.

Earlier HSTPA, service of a holdover petition had to be made 5-12 days before the commencement court appearance. As amended, RPAPL 733 provides that holdover proceedings must exist made returnable x-17 days afterward the petition is served. Additionally, HSTPA eliminated the provision of RPAPL 733 that permitted a landlord in a holdover proceeding to need an respond 3 days earlier the initial court engagement if the petition was served at to the lowest degree 8 days before the trial engagement. Landlords debate that this hollows out the operating assumption of summary proceedings. Although already rare in do before HSTPA, the RPAPL provided that a summary proceeding could go to trial on the kickoff court appearance. But the summary nature of a proceeding is undermined if the landlord does non accept a meaningful opportunity to review the answer and set up for trial. The applied effect is that tenants volition receive an automatic banishment of the first court appearance.

HSTPA has similarly enlarged time periods in nonpayment proceedings. Previously, if a tenant did non pay hire, RPAPL 711 required that the tenant be given a written three-24-hour interval rent need or an oral need (an oral need did not have to give three days) earlier a landlord could commence a nonpayment proceeding. HSTPA amended RPAPL 711 to abolish oral rent demands and to increase the notice flow for written rent demands to 14 days. HSTPA besides amended RPL § 235-e to require that tenants be notified, by certified post, if rent is not received within five days of the due date. If the landlord fails to serve this reminder notice earlier commencing a nonpayment proceeding, a tenant may raise that failure as an affirmative defence. RPAPL 732 has too been amended to increase from 5 to 10 days the time tenants have to reply a nonpayment proceeding. And if the tenant defaults in answering, the court still has the discretion to stay issuance of the warrant for five days.

Information technology is besides unclear whether the rent demand must give the new "reminder" discover in. Until the courts resolve the matter, conservative landlord-side practitioners will conclude that they should do so (to avoid motion practice). The practical result is that a rent demand can exist made no earlier than the 5th twenty-four hours after the rent is due. Assuming that rent is due on the beginning, this would be the sixth day.

Under prior police, a landlord could brand an oral rent need and serve a nonpayment petition the next day. Now there will now probable be a nearly three-calendar week delay when the time to issue service is added to the xiv days' notice required for a rent demand. Accounting for the additional 10 days a tenant has to answer the petition and, in New York City, the additional iii-eight days before the initial court appearance, another calendar month's rent volition come due before the parties ever get to court. Landlords mutter that every tenant knows without existence reminded that rent is due on the outset of the calendar month and that a "reminder" notice serves no function other than to graft a mandatory v-twenty-four hours grace period onto every New York lease. Landlords also complain most the cost of the required mailings.

Landlord advocates additionally contend past requiring that detect be issued by a landlord or agent "authorized to receive rent," HSTPA appears to preclude a landlord's attorney from giving find. Additionally, HSTPA is silent about whether a reminder must be sent each month that rent is late or whether a single reminder for a number of months of arrears volition suffice.

Tenant advocates offer that lengthening the fourth dimension necessary to embark a nonpayment proceeding gives tenants living paycheck to paycheck time to pay hire arrears and possibly avoid a nonpayment proceeding altogether. If a tenant has difficulty paying hire, missing piece of work to make a court advent is counterproductive, too. The reminder find further alerts tenants before a proceeding is started if their rent check was lost in the postal service or received and not accounted for by the landlord's managing amanuensis.

Commercial landlords respond that these arguments might exist relevant for residential tenants but take no bearing in the commercial context. They say that a reminder detect should not exist required for a commercial tenant (the statute does not land that the reminder is required only for residential tenants) and that although a residential tenant paying $1,500 a month will benefit from a slower eviction process, the landlord of a commercial tenant paying $150,000 a month should non be forced to look until $300,000 in deficit accrues before their first court appearance. Landlords argue that this is an outcome that pervades much of HSTPA. Many policy objectives underlying the new laws are irrelevant to commercial tenants; businesses are less vulnerable to an imbalance in bargaining power, and evicting a business poses less of a societal business than evicting a family. But HSTPA, business interests debate, fails in many instances to draw a meaningful distinction between residential and commercial matters.

HSTPA has also opened the floodgates to competing interpretations by providing that the failure to give a rent-reminder observe may be raised equally an affirmative defense force but giving no guidance well-nigh its application or consequences. On its face, HSTPA suggests that the mere failure to remind a tenant of a pre-existing, contractual obligation waives forever the obligation to pay hire, a callous consequence. It could likewise deed as a procedural bar, much similar a failure to make a proper rent need will result in a dismissal of the proceeding without prejudice to a landlord's ability to recover rent in one case the reminder is given. Alternatively, the affirmative defence force, if established, could result in the landlord's beingness barred from recovering rent in a summary proceeding, just the claim could be asserted in a plenary activity. Some landlords, notwithstanding, are positing that the New York State Legislature has non prohibited modifications to RPL § 235-e. They are using their right to contract to waive or modify that section.

Additionally, RPAPL § 711 previously provided that if a tenant died during a term of the lease and the rent had not been paid, no representative or person has taken occupancy, and no administrator or executor had been appointed within three months of the tenant's death, a proceeding could exist commenced confronting a surviving spouse or, if none, then a surviving issue or distribute. HSTPA provides that when a tenant dies, hire is not paid, and the flat is occupied by a person with a merits of possession, a proceeding may be commenced naming the occupants of the apartment seeking a possessory judgment confronting the manor. Entry of the judgment shall be without prejudice to the occupants' possessory claims, and any warrant shall not exist effective against the occupants. Any succession merits will exist litigated in a holdover proceeding.

II. Pauses in Court

HSTPA has altered the pace of summary proceedings by reforming the limits and disincentives to adjournments. Before HSTPA, RPAPL 745 discouraged excessive adjournments. It provided that later two adjournments past the tenant, or thirty days, the court was required to direct a tenant to deposit rent or use and occupancy that had come up due since the petition was served. While oft disregarded in practice, the law likewise limited adjournments to a maximum of 10 days, except with the parties' consent. RPAPL 745 has been amended to provide that an awarding for a rent deposit cannot be fabricated until a tenant's second request for an adjournment or until the proceeding has been on the calendar for lx days, where no delay is attributable to a landlord. The 10-day limit for adjournments has been replaced with a xiv-day minimum. The offset request for an banishment past a respondent unrepresented by counsel does not count toward the lx-24-hour interval limit, probable extending equally a practical matter the minimum to 90 days or more. And although a courtroom was required to grant apply and occupancy under the prior law if the conditions were met, doing then is now discretionary.

Another modify to RPAPL 745 that will generate pauses is that HSTPA has eliminated the practice of making an oral awarding for a rent deposit or use and occupancy. A written motility is now required. That creates the potential for additional adjournments of the motion itself and to brief the move, in add-on to any time a courtroom takes to determine the move. Furthermore, hire-deposit orders are prospective, requiring payment only of rent and use and occupancy accruing after the club issues. The tenant may not be required to pay any rent already due or which accrues while the motion is pending.

A tenant or occupant can likewise defend against a rent-deposit application past raising i of the following grounds or defenses: (i) the petitioner is not a proper party to the proceeding; (ii) bodily, partial, or constructive eviction if the tenant has vacated the premises; (iii) a Social Services Law § 143-b (Spiegel Police force) defence; (iv) a hazardous or immediately hazardous Housing Maintenance Code violation in the flat or the building'due south common areas; (five) a colorable hire-overcharge defence force; (vi) the apartment violates the certificate of occupancy or is illegal under the Multiple Habitation Law or Housing Maintenance Code; or (vii) the court lacks personal jurisdiction over the tenant or occupant.

The new law has greatly reduced, if not eliminated, the penalties for a respondent'due south failure to comply with a rent-deposit gild. Under prior law, if the tenant failed to comply with a hire-deposit lodge, the court could dismiss the tenant's defenses and counterclaims and grant the landlord a money and fifty-fifty possessory judgment. Nether HSTPA, a tenant's defenses or counterclaims are no longer stricken and no judgment may be granted. At the court's discretion, the tenant's time to comply may be extended for good cause, or the courtroom may refer the matter for an "immediate" trial. Still, the urgency suggested by the word "immediate" is belied by HSTPA's statement that this means merely that there will be no further adjournments at the respondent's sole request and that the case shall exist assigned to a trial-ready part with the trial to embark "as presently as practicable."^vi In reality, the "immediate" trial might be held weeks or months later.

In setting the use and occupancy or rent to be paid, a court may non exceed the regulated rent or the tenant's share under a subsidy program (in event or expired) unless the tenant has entered into a new agreement to pay the total rent. If the tenant or occupant is on a stock-still income, the amount required to exist deposited may not exceed xxx% of income. Department of Social Services (DSS) and other regime housing subsidies are not considered income under this section.

Tenants welcome the amendments to RPAPL 745. They are necessary, they argue, because the prior law thwarted tenants' basic right to invoke the warranty of habitability and withhold hire to compel urgent and necessary repairs to their apartments. The prior police force was unjust, they argue, in that it required tenants exercising the correct to withhold rent to begin paying hire soon after they began to withhold it, eliminating their but leverage to compel their landlords to fix uninhabitable apartments.

Landlords maintain that RPAPL 745 has been eviscerated. They argue that the bar has been ready too depression for tenants, who are required only to show that the defence force has been "properly" raised, and that the qualifying grounds to defeat a hire-deposit application now encompass nearly all the defenses tenants typically heighten. They contend, furthermore, that landlords have little reason to invoke RPAPL 745. Fifty-fifty if a landlord gets a rent-deposit club after months and movement practice, HSTPA penalties will be bereft to compel tenant compliance. Landlords also annotation that although the amendments to RPAPL 745 are geared toward residential tenants, the amended RPAPL 745 conflates residential and commercial tenancies, arguably overlooking essential differences relevant to the law's core objectives. The nature of a commercial tenant'south relationship to their commercial premises is dissimilar from the relationship residential tenants have to their homes, and commercial tenants need less protection. By not compelling commercial tenants to pay rent accruing during the pendency of a proceeding, HSTPA allows commercial tenants to weaponize summary proceedings confronting commercial landlords. Landlords emphasize the injustice of the Legislature's favoring the tenant'south business interests over the landlord's business interests. Some landlords are positing that the Legislature has not prohibited modifications to RPAPL 745 and are modifying their leases accordingly. Whether these lease terms are valid remains to exist seen.

3. Pauses at the Shut of Eviction Proceedings

Under prior police force, if a landlord won a holdover proceeding based on a lease alienation confronting a New York Metropolis residential tenant, the tenant had an automatic stay for 10 days nether RPAPL 753 to cure the breach. The courts were as well empowered to stay the issuance of the warrant for up to half dozen months. HSTPA revised RPAPL 753 to expand to 30 days the automatic mail service-trial menstruum on alienation-of-charter holdovers. It also doubled the length of the discretionary stay to i year and made information technology available for nonpayment proceedings across New York State.

In exercising its discretion to stay an eviction, the courts may now consider a number of factors, including health, exacerbation of an ongoing status, a child'southward enrollment in school, and whatsoever other extenuating circumstance affecting the ability of the applicant or the applicant'south family to relocate and maintain quality of life. In determining whether to grant the stay or in setting the length or other terms of the stay, a courtroom is likewise required to consider any substantial hardship the stay might impose on the landlord. The prior police carved out exceptions to the court's authority to grant the stay if the landlord intended in skillful religion to demolish the building and build a new one, or if the landlord established that the occupant is objectionable. HSTPA eliminated the demolition exception, but the exception for objectionable occupants remains. The stay must be conditioned on payment of the amount that will come due during the stay, but HSTPA permits payment by installment. The prior iteration of RPAPL 753 made mandatory the payment of all rent unpaid before a stay could be granted. The amended RPAPL 753 makes this requirement discretionary.

Before HSTPA, the police did not address a tenant'south payment of all or some portion of the rent on the disposition of a nonpayment proceeding. By conditioning a New York City stay on the respondent's payment or eolith of the judgment amount prior to execution of the warrant, even so, RPAPL 747-a limited the courts' discretion in a nonpayment proceeding to stay issuance or execution of a warrant of eviction or re-letting the premises. HSTPA repealed RPAPL 747-a and enacted RPAPL 731(4), which provides that if a tenant pays the full corporeality of rent due to the landlord "prior to the hearing of the petition," the payment "shall be accustomed past the landlord and renders moot the grounds on which the special proceeding was commenced."

Many landlords view this as codifying the practice in many courts. Courts generally dismissed these cases, or the parties discontinued them. Nonetheless, landlords question the awarding of the provision and whether it permits a tenant to make payment before the kickoff courtroom appearance or any later court appearance and whether a tenant must pay the petition amount or the amount that has accrued at the time of payment.

That provision must likewise be considered in conjunction with the amendments to RPAPL 702, which redefines "residential rent" narrowly to exclude fees, charges, and other penalties. Some contend that although HSTPA precludes a demand for attorney fees allegedly due prior to the proceeding, chaser fees incurred in connection with the proceeding itself are still recoverable. Others debate that because RPAPL 702 provides that "[north]o fees . . . other than rent may exist sought in a summary proceeding," a landlord is relegated to a plenary action to recover its attorney fees. Some courts, we hear, allow attorney fees in a separate, nonpossessory money judgment. Other courts, we are told, believe that landlords may not seek chaser fees in a summary proceeding simply that tenants may. Still other courts, nosotros empathise, believe that attorney fees may not be awarded as part of a claim or counterclaim but but when fashioning an equitable remedy to restore a tenancy afterwards an eviction or in the context of sanctions. No published opinion has addressed these of import questions yet. And RPAPL 702 provides that attorney fees may not exist granted on a default judgment, even when a respondent is served personally.

This aspect of HSTPA might lead landlords to eliminate from their leases the right of a prevailing party to collect chaser fees. It might also crusade landlords to bring plenary ejectment actions, in which attorney fees may be sought and (for market tenancies) exist part of a possessory judgment.

RPL § 238-a at present limits tardily fees to five% or $50, whichever is less. Fees for background checks are limited to $twenty or the actual cost, whichever is less, and the landlord is required to give a tenant a re-create of the background check and a receipt for payment and may not charge a fee for a background check if a tenant provides a copy of a background or credit check less than 30 days onetime. Controversies grow over this new rule, because background checks exceed $xx and because the courts must resolve whether a third party like a real-estate broker may take fees a landlord may not accept.

Landlords fright that if a residential tenant can pay the hire sought in the petition after many court appearances and many months into the proceeding, and thereby avoid both eviction and any late fees, interest, or legal fees incurred by the landlord in prosecuting the proceeding, they volition effectively get interest-gratis lenders to tenants. The inequity of the situation will be exacerbated if tenants successfully argue that RPAPL 731(iv) requires that the tenant pay only the petition amount. That would forcefulness landlords to commence another proceeding to recover rent arrears that accrued while the beginning proceeding was awaiting.

Although the exclusion of chaser fees applies just to residential tenants, if a commercial tenant in a nonpayment proceeding pays hire under RPAPL 731(4), the landlord may lose its claim for attorney fees, because the matter was non litigated to decision, such that the landlord tin can claim to be the prevailing party, a requirement to recover attorney fees.

Earlier HSTPA, RPAPL 749 provided that the issuance of a warrant of eviction operated to cancel the lease and annul the landlord-tenant relationship, depriving the court of the authority to vacate the warrant. The issuance of a warrant of eviction no longer annuls the tenancy. The court may, for good crusade, stay or vacate a warrant, stay reletting or renovation, and restore a tenant to possession unless the landlord establishes that the tenant withheld the hire due in bad faith. And, profoundly, the new RPAPL now requires vacatur of the warrant if the tenant pays everything prior to execution.

RPAPL 749 now likewise changes the marshal'southward detect of eviction from a 72-hr notice to a 14-day notice, thus giving tenants more time to move before an eviction and more time to file an order to bear witness cause to stay an eviction.

RESIDENTIAL LANDLORDS NOW HAVE A DUTY TO MITIGATE

Earlier HSTPA, landlords did not have an obligation to mitigate amercement if a tenant bankrupt the lease by vacating early on. Following time-honored precedents like Holy Properties Ltd., L.P. 5. Kenneth Cole Productions, Inc.,⁷ New York courts permitted landlords to exit the apartment vacant for the remainder of the lease. The tenant would exist liable for hire through the stop of the term. HSTPA at present provides in RPL § 227-e that landlords of residential units must "in good religion and according to the landlord's resources and abilities, take reasonable and customary efforts to rent the premises at fair market value or at the charge per unit agreed to during the tenancy, whichever is lower." Whatsoever lease provision to the opposite is void as against public policy.

Landlords and tenants speculate virtually the standard courts volition apply to determine whether a landlord has exercised a "reasonable and customary effort." With HSTPA'southward recent passage, no frame of reference determines what constitutes a "customary" effort at mitigation. It is an open question whether a landlord must accept a prospective tenant's first rent offer or whether it is reasonable to continue to market the property to obtain a higher rent if doing so volition cause the apartment to remain unrented. In the instance of hire-stabilized tenancies, it also remains to be seen whether, given that a preferential rent becomes the maximum rent that can be charged, it is reasonable for a landlord to delay renting an apartment to avoid becoming locked into a long-term tenancy at a reduced rate. Information technology is similarly unclear what touch on a landlord's failure to conduct the brunt of proving amercement has on a tenant'southward liability. A court could observe that a landlord's failure to deport the burden excuses the tenant from all liability, or the tenant could be excused from just that portion that accrued before the landlord re-rented the unit.

Landlords and tenants are divided on the fundamental fairness of RPL § 227-due east. Landlords argue that HSTPA has turned the tables on a boulder assumption negotiated into every residential New York lease for decades. The Court of Appeals made the example against a mitigation rule 25 years ago in Holy Properties, stating in that commercial example that "[p]arties who engage in transactions based on prevailing law must be able to rely on the stability of such precedents. . . . This is perhaps true in real property more than any other area of the law, where established precedents are not lightly to be set bated."^viii

Tenants point to the injustice of a tenant'southward rent continuing to accrue each month fifty-fifty though the tenant is no longer in possession, while landlords demand practice nix to reduce the tenant'southward financial burden. At a time in New York when there is an affordability crisis, tenants say that the new mitigation rule advances New York's overarching housing policy goals. The rent arrears owed to a prior landlord volition brand it even more difficult for a tenant already in fiscal distress to detect housing. This perpetuates the cycle of dislocation whose emptying is key to HSTPA.

LANDLORDS MAY Exist LESS WILLING TO SETTLE GARDEN-Variety CASES

Near landlord-tenant disputes are resolved through "hallway justice," when the parties reach an agreement on settlement terms before the instance reaches trial. This is ofttimes the parties' pragmatic decision to avert the cost, filibuster, and uncertainty of going to trial. Courts encourage settlements; they lack the resources to try every landlord-tenant case. An essential feature of many settlement agreements is that the tenant consents to a judgment of possession and the issuance of a warrant of eviction to enforce the tenant's agreement to resolve the claimed default. This allows the landlord promptly to recover possession if the tenant violates the terms of the agreement. Rather than get back to court on a motion to enforce the agreement, the landlord can notify the Align of the default, and an eviction will be scheduled.

HSTPA, however, has revised RPAPL 749 to require that warrants state the first date on which an eviction tin occur, with the result that the "pay out" stipulations used to resolve many nonpayment proceedings must at present provide for execution of the warrant on the last payment engagement (or such earlier engagement specifically canonical by the court), rather than the get-go payment date, as was the common practice. Under the new law, if the tenant fails to brand an earlier payment, the landlord must return to the courtroom to request enforcement of the agreement and accelerate execution of the warrant. It remains to be seen whether the increased costs and pauses in enforcing settlement agreements will discourage landlords from inbound into these stipulations. And that will slow the rate of settlement and inundate court calendars. Given HSTPA, some courts exterior New York City now let a landlord'due south chaser to submit a alphabetic character, on notice to the tenants or their attorney, specifying the default, and then the court issues the judgment and warrant without further appearances. And the State Court System is struggling to account for eviction dates for default judgments, for which no stipulation of settlement can provide an eviction date.

The revised RPAPL 749 also provides that a warrant permits eviction only of persons "named in the proceeding." In many cases, occupants' identities are unknown to the landlord and cannot be ascertained. That has led to the nigh universal practice of naming a "John Doe" or "Doe #1" in a summary proceeding to account for unknown occupants or known but unnamed occupants. HSTPA'south ramifications on the practice of naming "Doe" respondents is unclear – what will happen when a Marshal or Sheriff volition adios proper name someone not named at all? – but landlords might at present provide for heightened surveillance of the people entering and leaving their buildings so they can now name the occupants' children in the eviction petition and warrant. This raises privacy concerns the Legislature did not intend.

To make certain that landlords comply with HSTPA, a new RPAPL 768 makes unlawful evictions a Grade A misdemeanor throughout New York Land. This carries a criminal connotation and civil penalties from $i,000.00 to $five,000.00 per violation. Conduct constituting an unlawful eviction include using threatening force; interfering or intending to interfere with an ability to use the dwelling; and engaging or threatening to engage in any conduct that prevents or is intended to forbid an occupant from lawful occupancy or to induce vacatur of lawful occupant. If there is a decision that an unlawful eviction occurred, the occupant must be restored to possession.

COOPERATIVES: THE UNWILLINGLY PROTECTED

Cooperatives have been among HSTPA'due south nearly vocal opponents, because HSTPA makes no stardom between tenants in a traditional landlord-tenant human relationship and shareholders who are the proprietary lessees of apartments in which they have an ownership interest.

Like other tenants, shareholders must get thirty-90 days' notice nether RPL § 226-c if the coop board intends to raise maintenance by more than 5%. A shareholder who fails to pay maintenance must be given a RPL § 235-e reminder notice. Failure to provide this notice gives rise to an affirmative defense for the shareholder, with all the open questions and issues associated with this new provision. If a shareholder fails to pay maintenance, the courts may grant a stay of eviction for upward to a twelvemonth, a potential hardship to buildings that rely on maintenance fees to pay a mortgage, real-manor taxes, and other expenses to maintain a building. Boards are also concerned that they might be limited by the maximum of v% or $50 for late fees nether RPL § 238-a. Similarly, the automatic mail service-trial menses under RPAPL 753 on breach-of-lease holdover proceedings applies to shareholders, extending the time period neighbors must deal with odors, noise, or unsafe or illegal comport, even if management has been successful in proving that the shareholder'southward conduct is objectionable. And, like any other landlord, boards are now arguably unable to recover their attorney fees in a summary proceeding. Similarly, considering of the new definition of "rent," many cooperatives volition likely opt to revise their bylaws to remove additional rents unrecoverable in a summary proceeding under HSTPA. Moreover, coop disputes volition be increasingly heard in Supreme Court ejectment actions (in which added hire and attorney fees may be sought) and Pullman actions (in which the court might enforce a board vote to evict a shareholder).⁹

Other provisions that seem likely to have been intended for traditional tenants, just which too embrace cooperatives, include restrictions on taking more than one month's maintenance as a security deposit or requiring pre-paid maintenance, both of which the amended GOL now prohibits.

CONCLUSION: DE FACTO Hire REGULATION FOR FAIR MARKET TENANTS, UNENDING PAUSES PREDICTED FOR HOUSING COURTS – LANDLORDS WARN OF DIRE CONSEQUENCES AND Financial RUIN FOR Minor LANDLORDS; TENANTS CALL Information technology A STEP IN THE Correct DIRECTION

Many landlords claim that HSTPA's new laws, from the expanded notice requirements and the anti-retaliation provisions of RPL § 223-b to the courts' wide discretion to grant a stay of upwardly to a year and the lengthy delays under the revised RPAPL, create a form of de facto rent regulation for unregulated apartments.

The amass impact of the many pauses HSTPA created is that many landlords will be unable to traverse a summary proceeding from commencement to warrant in less than a year. This, co-ordinate to landlords, is an optimistic approximation when the court'southward nearly unlimited discretion to grant a year-long stay is factored in. HSTPA takes the pauses owned to the arrangement and makes it a defining, primal feature of the eviction process itself.

In the past, the daunting prospect of late and legal fees, also as a black marker side by side to the name of a tenant when renting in the futurity, deterred a tenant's capitalizing on systemic delays. These inherent safeguards have been swept away, landlords say. A tenant will likely confront no late or legal fees, even if the tenant loses decisively in court after a protracted legal battle, and future landlords are at present barred from basing leasing decisions on blacklists.

Institutional landlords may exist able to withstand HSTPA's rules, but small-scale landlords might not. Devastating consequences tin befall modest landlords deprived of rental income they need to get-go the financial burden of a mortgage, taxes, insurance, utilities, and the many costs of property ownership. Small-scale landlords warn that the net effect of these laws will undermine the summary nature of summary proceedings. Summary proceedings were originally enacted to replace the common-law ejectment action, an expensive and dilatory proceeding that tin can lead to denials of justice. And whereas adept-government advocates prefer uncomplicated, quick, and cheap litigation, landlord advocates worry that HSTPA has turned landlord-tenant litigation into an fifty-fifty more complex, time-consuming, and expensive debacle.

HSTPA'southward supporters, on the other hand, argue that a landlord volition nonetheless be able to obtain a judgment for arrears owed, even if obtaining the judgment is postponed. With close to 70,000 homeless in New York City alone, two-thirds of whom are families, and the steady, year-by-year hemorrhaging of rent-stabilized apartments through deregulation, estimated to be approximately 170,000 to date, tenants believe that HSTPA's boosted protections are a small just necessary bulwark against New York'due south housing-affordability crunch. Landlords answer that mitigating the housing affordability crunch is a worthwhile goal, but ane that rests with the State of New York to achieve, and that HSTPA abdicates state responsibility for creating affordable housing. Landlords wonder whether the same concern shown for tenants' fiscal struggles will apply to them if they default on their mortgage.

And in response, tenants say that, some way, somehow, landlords will find a style to make money in New York existent estate. They always have.