New York landlords must follow specific state rules, such as complying with security deposit limits and the timeline and procedures for ending a tenancy. Several federal laws, such as requirements to disclose lead-based paint hazards, also affect landlords in New York. And if you own rental property that is covered by either rent control or rent stabilization in New York, many additional restrictions affect your rental property business.
Failure to meet your legal responsibilities can lead to costly disputes with tenants and hefty financial penalties—for example, if you illegally discriminate when choosing tenants.
Here are ten ways to stay out of legal trouble and run a successful property management business in New York.
Before you advertise a vacant apartment, it is crucial that you understand fair housing laws and what you can say and do when selecting tenants. This includes how you advertise a rental, the questions you ask on a rental application or when interviewing potential tenants, and how you deal with tenants who rent from you. Failure to know and follow the law may result in costly discrimination complaints and lawsuits.
While New York landlords are legally free to reject applicants—based on a bad credit history, negative references, from previous landlords, past behavior, such as consistently paying rent late, or other factors that make them a bad risk—this doesn't mean that anything goes. You are not free to discriminate against prospective tenants based on their race, religion, national origin, sex, familial status (such as having children under age 18) or physical or mental disability. These are "protected categories" under the federal Fair Housing Act of 1968, as amended (42 U.S. Code § § 3601-3619 and 3631). There are a few exemptions to federal anti-discrimination rules, including owner-occupied buildings with four or fewer units, and single-family houses, as long as the owner owns no more than three rental houses at a time. (New York state fair housing laws, however, limit some of these exceptions.)
State law in New York also prohibits discrimination on the basis of a person's sexual orientation or marital status. Some cities, including New York City, prohibit discrimination on the basis of gender identity (as well as sexual orientation).
The HUD website provides details on fair housing laws, as does the Civil Rights Bureau of the New York Attorney General's office.
All landlords want their tenants to pay rent on time and without hassle. If you need to raise the rent or evict a tenant who hasn't paid rent, you'll want to be sure you comply with the specific rules and procedures in New York, especially if you own rental property in New York City or other communities with rent control or rent stabilization. For details on state rent rules, see New York Termination for Nonpayment of Rent and Other Rent Rules; also, see the resources listed at the end of this article.
Security deposits are among the biggest sources of dispute between landlords and tenants. To avoid problems, be sure you know New York rules, such as interest requirements, that may affect your property. Using a landlord-tenant checklist when a tenant moves in (and moves out of) a rental, and sending a written security deposit itemization when the tenant leaves will go a long way in avoiding disputes.
You are legally required to keep rental premises livable in New York, under a legal doctrine called the "implied warranty of habitability." If you don't take care of important repairs, such as a broken heater, tenants in New York may have several options, including the right to withhold rent or "repair and deduct."
Every Landlord's Legal Guide, by Marcia Stewart Ralph Warner, and Janet Portman (Nolo) includes extensive advice on establishing a repair and maintenance system that will help you prevent problems, such as tenant rent withholding or injuries to tenants due to defective conditions in the rental.
The rental agreement or lease that you and your tenant sign sets out the contractual basis of your relationship with the tenant, and is full of crucial business details, such as how long the tenant can occupy the rental and the amount of the rent. Taken together with federal, state, and local landlord-tenant laws, your lease or rental agreement sets out all the legal rules you and your tenant must follow.
Problems arise when landlords include illegal clauses in the lease, such as a waiver of landlord responsibility to keep premises habitable, or when landlords fail to make legally required disclosures (discussed in the next section). And even if it's not required that you cover a particular issue in your lease, such as how when and how you can enter rental property, you can avoid all kinds of disputes by using an effective and legal lease and rental agreement that clearly informs tenants of their responsibilities and rights.
Under New York law, landlords must make certain disclosures to tenants regarding security deposits. Landlords must also comply with required federal disclosures regarding lead-based paint on the property, or face hefty financial penalties.
It is illegal to retaliate in New York —for example, by attempting to raise the rent or evict a tenant for complaining about an unsafe living condition. To avoid problems, or counter false retaliation claims, establish a good paper trail to document how you handle repairs and other important facts of your relationship with your tenant.
State laws specify when and how a landlord may terminate a tenancy. Failure to follow the legal rules may result in delays (sometimes extensive) in terminating a tenancy. See State Laws on Unconditional Quit Terminations and State Laws on Termination for Violation of Lease for information on termination requirements in New York.
Be sure to check out government agencies, such as the U.S. Department of Housing and Urban Development (HUD), the Civil Rights Bureau of the New York Attorney General's office, the New York Attorney General's Office, New York State Homes & Community Renewal, the NYC Commission on Human Rights, and the New York City Rent Guidelines Board which provide useful legal information and publications on their websites.
Finally, if you have legal questions about your rental unit, you should consult with an experienced landlord-tenant attorney in New York.