This expert post is written by Hal Coopersmith, Partner at Coopersmith & Coopersmith, a New York-based law firm with deep real estate expertise, and the operator of the lease management platform RezCue. For a limited time through the end of 2022, enter code "SUPER" for unlimited free uses for your leases.
If you are renting out your New York City co-op or condo, you may find that being a landlord is not as easy as it used to be. In 2019, New York passed the Housing Stability and Tenant Protection Act (HSTPA), a sweeping legislation which imposes new rules on landlords.
There are provisions of the HSTPA that cover all apartments across New York State—whether you are a large landlord, who may be well equipped to handle these changes—or an individual co-op and condo owners, who may be less prepared. Here are some of the key points and issues landlords and anyone renting their co-op or condo apartment should be aware of.
1. Know your building’s leasing requirements.
Many condos and co-op buildings require board approval for leases (condos) and subleases (co-ops), even upon renewal for an existing tenant. There may be related fees, special term requirements, and required forms or riders. Tenants must also agree to abide by the rules and regulations of the building, so all governing documents such as by-laws and house rules should be attached to the lease as an exhibit.
2. Know your terms.
In addition to the monthly rent, before you begin preparing a lease consider what other terms and fees must be included. How much time do you need to prepare the apartment for occupancy or acquire board approval? What methods of payment will you accept for rent? Will you or your tenant perform any repairs or alterations to the apartment? Will you cover any portion of the cost of appliance repairs and replacements? What utility charges are included in your monthly common charges or maintenance and what costs will be included in the tenant’s rent? Will you or your building require any particular insurance coverage from the tenant? Will you provide the tenant a right to extend on preset terms? Will you require a guarantor? Having an intake form, like the one Coopersmith & Coopersmith uses, helps address these questions before beginning the work to prepare a lease.
3. Provide timely notice of non-renewal or rent increases of 5% or more.
Tenants who have occupied an apartment for less than 1 year are entitled to 30 days’ notice. Tenants who have occupied an apartment or have a written lease term of at least one year are entitled to 60 days’ notice. Tenants who have occupied an apartment or have a lease term of at least two years are entitled to 90 days’ notice. These rules also apply to month-to-month tenants, so a long-term tenant who has occupied the apartment for many years but never renewed their lease is still entitled to 90 days’ notice. This is where software can be helpful to automate keeping track of these minimum notice periods and deadlines.
4. Offer an inspection upon move-out and return the security deposit within 14 days.
The HSTPA requires that you conduct an exit walkthrough 1-2 weeks before the tenant surrenders possession of the apartment and provide the tenant 48 hours’ notice of the inspection. You must also provide an itemized list of any damage or other condition discovered in the inspection that must be cured, and tenant has the right to cure before surrendering the apartment. Finally, you must return the security deposit within 14 days of tenant’s surrender. The security deposit may not be retained for ordinary wear and tear, attorneys’ fees, late fees, or other miscellaneous charges. Failure to return the deposit in a timely manner with any itemized list of deductions for uncured damage or conditions forfeits your right to retain any portion of the deposit for cleaning or repairs.
5. Document the condition of the premises before the tenant takes possession.
Standard residential leases require the tenant to surrender possession of the premises at the end of the term in good order and in the same condition as it was when tenant first occupied it, except for ordinary wear and tear and damage caused by fire or other casualty through no fault of tenant. Tenants are also entitled to inspect the premises and document any existing damage or conditions before taking possession. Landlords should take photos and/or videos showing the condition of the entire apartment before move-in so there is no room for doubt as to the condition tenant must deliver at the end of the lease. Make a complete list of any items of personal property that will be in the apartment during the lease term (i.e. included furniture) and include photos or descriptions of the condition of these items as well.
6. Collect security deposit equal to one month’s rent.
Security deposits may not exceed one month’s rent. This also includes prepaid rents, such as collecting last month’s rent at lease signing, and additional pet deposits (though it does not prevent you from charging a higher rent or other fees for pets).
7. Do not collect excessive fees.
Application fees may not exceed $20 or the actual cost of background and credit checks, whichever is less. You must provide copies of the background and credit checks to the tenant together with a receipt for the cost, and tenants may opt to provide copies of their own background or credit check conducted within the last 30 days in lieu of paying the fee. Late fees may not exceed $50 or 5% of the monthly rent charge, whichever is less, and tenants are entitled to a minimum 5-day grace period.
8. Provide written rent receipts if rent is paid in any form other than by personal check.
If rent is paid in person, you must provide the receipt immediately. Otherwise, it must be provided within 15 days. Landlords must maintain records of cash receipts for at least three years.
It can feel overwhelming to keep track of all of these important deadlines. As a law firm that works with many real estate owners and landlords, we know how critical it is to have the right partner to streamline the residential leasing process and getting comprehensive advice on new laws and compliance. With all the things on a landlord's plate, it is easy for things to slip through the cracks. That's why we believe in a technology-led approach with our proprietary platform RezCue for tracking important deadlines and support of Super.
Managing multiple stakeholders and local compliance is ever-changing work for buildings and their owners. Super's software platform helps align developers, managers, boards, owners, and residents to streamline communication, transparency, and compliance.
Ready to get started? Schedule a demo of Super.
Super's co-founder & CEO is interviewed by CNBC about the skills and traits needed to succeed in a 4-day work week.