New York state legislators passed the Good Cause Eviction Law on April 20, 2024, requiring apartment landlords and owners to show “good cause” to evict a market-rate tenant. The law also guarantees lease renewals for already occupied apartments with existing eligible tenants who pay rent on time and follow lease terms, and caps rent increases for most New York City Apartments on lease renewals. This is a sweeping change for the NYC apartment industry as it impacts the rights and obligations of landlords and tenants.
The new law is in effect for all five boroughs of New York City but will not take effect for other cities and towns in the state unless those municipalities opt into them. So, what does this law mean for NYC apartment landlords and owners? Below are a few of the main highlights from the Good Cause Eviction (GCE) Law and considerations for apartment owners.
Raising Rents
Apartment owners who seek to raise rents on renewal to the lesser of 10% or 5% + CPI (CPI in New York City is the New York-Newark-Jersey City, NY-NJ-PA consumer price index) remain unaffected by the GCE. For example, if an owner sought to raise rent by 7.5% today, such increase on renewal would not trigger any GCE protections as it is less than the 8.82% promulgated by the New York State Division of Housing and Community Renewal (DHCR).
Increases on a renewal of more than the lesser of 10%, or 5% + CPI, are presumptively unreasonable, but such presumption is rebuttable. Owners must be able to demonstrate the reasonableness of such increases. In determining the reasonableness of an increase, the law provides several landlord costs that a court may examine and circumstances the court must take into consideration (i.e., property taxes) in addition to whether the apartment was “significantly repaired.” There is anticipation that this may be a hotly litigated issue.
Unregulated Apartments
Owners of unregulated apartments must show “good cause” for why a lease is not renewed. There are several express bases of “good cause” in the law, including:
- The tenant’s failure to pay rent, provided that the rent is not unreasonable (noted above).
- The landlord seeks to demolish the apartment. The law only states that the apartment must be demolished, not the building and may be a basis worth exploring.
- The tenant has violated the terms of the lease (i.e. a substantial obligation of the tenancy);
- The tenant is committing a nuisance.
- The tenant’s occupancy of the apartment is in violation of the law or causes a violation of the law, subjecting the owner to penalties. It appears, however, that this provision requires the issuance of a vacate order and would require the restoration of the tenant to possession once the violation is cured.
- The tenant is using the apartment or part of the building for an illegal purpose.
- The tenant has refused access to the landlord for a legitimate purpose.
- The landlord seeks to occupy the apartment for his personal use.
- The landlord seeks to withdraw the apartment from the rental market; and the tenant refuses to agree to “reasonable changes” to a lease renewal
Good Cause Eviction Law Notices
Good Cause Eviction Law Notices must be attached to vacancy and renewal leases and to predicate notices and petitions where an owner commences a holdover proceeding or nonpayment proceeding. Where an owner chooses to increase the rent for more than the presumptively reasonable amount, or where an owner chooses not to renew an unregulated lease, a Good Cause Eviction Law Notice must be attached. The Notice requirement went into effect as of August 2024.
Exempt Apartments
There are several type apartments which are exempt from GCE, including, but not limited to apartments that are subject to rent stabilization or other regulatory agreements, owned by “small landlords” (i.e. landlords that own less than 10 units in total), occupied by a superintendent or employee of the owner, condominiums or cooperatives, in buildings issued a temporary or permanent certificate of occupancy after January 1, 2009 (an interesting exception in that it does not state that the first certificate must have been issued on or after that date) or occupied by tenants where the monthly rent exceeds 245% of the fair market rent established by the United States Department of Housing and Urban Development.
Robert Rahmanian
Co-founder and co-CEO
Real New York
29 West 30th St., 4th Floor
New York, NY 10001
robert@realnewyork.com
