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ARTICLES

13 Things to Know: Expansion of Rent Regulation and Tenant Protection

Editor’s Note: The New York State Association of Realtors released the following column for Realtors authored by Harris Beach Attorneys at Law, PLLC in respect to recent rent regulation and tenant protection legislation that was signed into law by Gov. Andrew Cuomo.

BACKGROUND: On June 14, 2019, the Governor enacted sweeping legislation expanding certain rent provisions statewide and altering the relationship between landlords and tenants in residential real estate.

NEED TO KNOW: EXPANSION OF RENT REGULATION: The Emergency Tenant Protection Act of 1974 (“Act”) was expanded as part of this sweeping legislation. This Act established the system of rent stabilization and regulated rent as seen in New York City, and could be expanded to any village, town, or city if the local legislative body passes a resolution upon adequate public notice declaring an “emergency” after a finding that vacancy rates for any or all classes of housing are 5% or less.

TENANT PROTECTIONS: The legislation also strengthened the substantive rights of residential tenants against landlords while bolstering tenants’ procedural rights in the face of an eviction. Notable provisions include:

NEW TENANT PROTECTIONS

1. Landlords Must Mitigate Damages: A landlord is obligated to mitigate its damages in the event a tenant breaks a lease. For instance, a landlord must now attempt to re-lease the premises.

2. Security Deposits Limited to 1 Month: In non-rent stabilized units, a deposit or advance shall not exceed the amount of one month’s rent.

3. Application Fees are Prohibited: A landlord cannot seek any payment for the processing, review, or acceptance of a rental application.

4. Background Fees are Capped: Reimbursement for background and credit checks are limited to the lesser of the actual cost or $20.

5. Late Payment Fees are Also Capped: A late fee must be the lesser of $50 or 5% of monthly rent.

6. Self-Help is Criminalized: It is now a class A misdemeanor for a landlord to evict or attempt to evict a tenant who has occupied a dwelling unit for 30+ consecutive days without a warrant of eviction or order of a court. Civil penalties can range from $1,000 to $10,000 for each violation.

7. Strengthened Protections Against Retaliatory Evictions: A landlord cannot serve a notice to quit or commence an eviction proceeding against a tenant who made a good faith complaint to the landlord or landlord’s agent about the warranty of habitability, duty to repair, or other law.

8. Notice: A landlord must now provide tenants with notice ranging from 30 days to 90 days if the landlord intends to increase rent by 5% or more or does not intend to renew the tenancy.

EVICTIONS

1. Damages in Eviction Proceedings are Limited: Additional rent, fees, charges, penalties, and costs are no longer recoverable from a tenant in an eviction proceeding.

2. Grounds for Eviction can be Rendered Moot if Tenant Makes Full Payment Prior to Hearing.

3. Stays for Warrants: A tenant can halt issuance of a warrant of eviction for a period of up to one year, increased from six months.

4. Timing of Eviction Proceedings: Time periods for eviction proceedings were modified and often increased to the tenant’s benefit. For example, a landlord must give 14 days written notice (up from three) demanding rent or possession prior to commencing a proceeding; tenant now has the right to adjourn trial for 14 days as of right; officer executing warrant must deliver 14 days written notice prior to evicting a tenant(s).

5. New Defense to Eviction Proceedings: A landlord or its agent must provide written notice to a tenant of late rental payments not received within five days of the due date. Failure to deliver written notice can be raised as a defense in a later eviction proceeding.

This publication was prepared by Harris Beach PLLC for the benefit of the New York State Association of REALTORS, Inc. If you have any questions concerning the above please contact Mike Kelly or S. Anthony Gatto at 518-463-0300.

CID to Meet on Aug. 7 to Discuss New Rent Regulations

The Hudson Gateway Association of Realtors’ Commercial Investment Division and the Bronx-Manhattan North Association of Realtors have scheduled a breakfast seminar on Wednesday, Aug. 7 to discuss the impacts of the new rent control regulations in New York.

The “The New Rent Laws – What Happens Now?” seminar will be held at the Hutchinson Metro Center (1200 Waters Place) in the Bronx and will begin at 9 a.m. The seminar is free of charge to attendees.

Learn More

 Clink on the link to access NYSAR Reforms to Tenant Landlord Relations (pdf): 

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6 First-Time Home Buyer Myth

 Buying your first home can be an intimidating process, as there are many steps involved before you can move in and begin this new chapter of your life. From determining a budget and applying for a mortgage to hiring a real estate agent and making an offer, the experience will take time and require patience, organization and research. There are also some common misconceptions about purchasing a home that buyers should be aware of, especially those who’ve never been through the process before.

Here are six first-time home buyer myths, along with the facts debunking them:


#1: You should find a home to buy before applying for a loan. (False)
Motivated sellers aren’t going to sit around and wait for a buyer to obtain a mortgage loan. Instead, they’re going to accept the best offer. For example, if a buyer makes a healthy offer on a home, but he or she hasn’t applied for a mortgage loan, the seller will likely be less inclined to agree to such a deal. This is because getting approved for a loan takes time, and the buyer may not receive enough funds to pay top dollar for the property. Consequently, it’s important for buyers to at least get pre-approved for a mortgage loan with a reputable mortgage lender before starting their search. This way, they’ll be prepared to put their best foot forward when they find the right property and prove to be a serious buyer to sellers.


#2: There is only one type of loan you can apply for. (False)
Some first-time home buyers may not realize there are several types of home loans available. While they may not qualify for all, they’ll likely have more than one option. Besides the conventional mortgage loan, there are also Federal Housing Administration (FHA) loans, U.S. Department of Veterans Affairs (VA) loans, U.S. Department of Agriculture (USDA) loans, and the Fannie Mae HomeReady® Mortgage, among others. The key to determining which financing option is the best for you is contacting a lender who can explain what each loan entails, as well as the requirements and information needed to apply.


#3: You need to pay a minimum of 20 percent down. (False)
Twenty percent of a property’s purchase price is the standard down payment. However, it’s not the only option. Depending on the type of loan obtained, the minimum down payment requirement will vary.

Take FHA loans, for instance. These tend to have more flexible qualifications compared to other mortgages. As stated by the U.S. Department of Federal Housing and Development (HUD) on its official website: “Your down payment can be as low as 3.5% of the purchase price” with an FHA loan. Factors, such as credit score, will play a role in determining what someone’s down payment requirements will ultimately be. Still, this could help buyers save a significant amount of money.


#4: You don’t need the help of a real estate agent. (False)
Getting assistance from an experienced and reliable real estate agent can be extremely advantageous. They can not only assist in finding potential properties within your budget, but can also be instrumental in helping negotiate a purchase price and explaining who’s who at the closing table, as well as other important details pertaining to the home-buying process.

Real estate agents can lend a helping hand when it comes to choosing a lender, as well, since they’ve likely worked with different lending companies and mortgage loan originators. Therefore, they may be able to shed some light on which lender tends to provide the fairest rates and best customer service.


#5: The only thing you have to worry about is making the down payment. (False)
Being able to afford the required down payment for a new home is obviously an important factor for a prospective homeowner. There are other costs involved in the purchase that first-time home buyers may not be aware of, however. Buyers are often expected to pay closing and moving costs, as well as (if applicable) appraisal costs, homeowner’s insurance, title insurance, and private mortgage insurance, among others.


#6: All mortgage lenders offer the same loans. (False)
Not all lenders provide the same loans. Take FHA loans, again, as an example. Only FHA-approved lending companies can offer these. That means anyone interested in securing a FHA 203(k) loan, for example—a loan providing funds to purchase and renovate a home—would need to obtain approval from such a lender. Besides asking a real estate agent, borrowers can locate these via a search tool on HUD’s official website, as the FHA is a part of this government department.


Published by Contour Mortgage , March 19 2019

Learn More

If you are interested in getting more information about financing and mortgage options, please feel free to contact us.