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New Law Could Cap Maintenance & Common Charge Increases Some Predict Trouble for Multifamily Communities & Owners

New York State Capitol, Albany. Image credit: taken from flickr/Created by: iessi

Following on the sweeping -- and controversial -- Housing Stability and Tenant Protection Act of 2019, the New York state legislature has proposed a bill that some fear could have disastrous implications for residential real estate across New York. Senate Bill S.2892-B seeks to prevent evictions ‘without good cause’—a laudable intention on its face, but critics of the Act say that the language in the bill is both broad and vague, and implies that co-ops, condos, and apartment building owners will face daunting limitations to their operational procedures and income, should it pass. 

Stuart M. Saft, a real estate attorney and partner at Manhattan-based firm Holland & Knight tells The Cooperator that the bill would prohibit landlords and owners of  housing accommodations from evicting a tenant or occupant unless good cause for the eviction can be demonstrated in a court of law. “Good cause” does not include eviction for nonpayment of rent if the court finds there has been an “unreasonable rent increase,” which is presumed to be anything more than 3% or 1.5 times the increase in the consumer price index. In 2019 that figure was 2.5% for housing in New York City. 

Words Matter

Importantly, the term “housing accommodation” as described in the bill applies to any residential premises—including condos, co-ops, and even hotels—except those already protected from market-driven increases under rent stabilization or rent control and, perhaps surprisingly, one- to three-family dwellings. Further, an “occupant” does not necessarily have to have a lease agreement with the property owner; under the Act, an owner would have to prove good cause for eviction, even if a resident is occupying the space illegally and/or not paying rent.

Much like the proposed commercial rent stabilization legislation over the last couple of years, the bill also requires lease renewals to be offered to all tenants, in this case “at a not unreasonable rent increase.” If a landlord fails to do so, the occupant could remain in the space without paying for it—even if their lease has expired -- or, according to Saft, even if there never was a lease to begin with.

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2 Comments

  • I have inherited an apartment Co-Op and was wondering if the maintenance fees will be automatically increased if I’m approved by the board?
  • Lina, you have not inherited anything unless approved by the board to take over the shares. The maintenance fees of a co-op are increased periodically (often, annually). The timing of your approval or rejection as shareholder has no bearing on maintenance increase. But, if you are concerned that a maintenance increase will make the co-op unit unaffordable for you, then it is likely that your application as shareholder will not be approved by the co-op board, because your financial condition does not support the required payments and with some cushion for maintenance increase and assessments.