Landlords across New York are grappling with the effects of the new rent law, but upstate property owners don’t feel a particular kinship with their downstate counterparts.
At a packed session on the new rent laws in a Utica casino this week, legal experts explained the new framework to apoplectic upstate landlords and reviewed their plan to counteract the new law with a legal challenge of their own. But the session also highlighted the tension between upstate and downstate landlords: one upstate real estate attorney even described the legislation as a “New York City solution searching for a problem.”
Jamie Cain, an attorney at Rochester law firm Boylan Code, told attendees that she has been retained to challenge “Section M” of the new rent law. The legal challenge will be premised on confusion over security deposits, the updated schedule for late rent notices and eviction proceedings, and the impact of the law on lower-income tenants. Cain added that the forthcoming litigation is being prepared with “kid gloves” — so as to not get in the way of the New York Capital Region Apartment Association’s nascent lobbying and advocacy efforts.
During the question-and-answer portion of the session, Cain encouraged landlords to continue to find “creative loopholes,” noting that case law will ultimately define practices.
“You’re going to be able to try a lot of things in the next six months,” she said. “If the statute doesn’t prevent it, try it. If it works, that’s how case law is defined.”
Charge what you can
Changes to security deposits and requirements for eviction notices had an immediate impact on upstate landlords of market-rate units. The new restrictions even had one upstate landlord from Albany-based management firm 518 Apartments wondering if he could “charge a legislation cost included in the rent,” like extra fees from utility companies, he said. While Cain advised against charging an extra “rent law fee,” she suggested that landlords might instead tack on a pet fee.
“Make sure you order pet poop bags and spruce up the pet area first, though,” Cain said.
Cain also weighed in on a topic that has generated some confusion: international students, before the rent law expansion, were accustomed to providing hefty deposits in order to secure an apartment without a credit score or a social security number. According to Cain and Debbie Pusatere, the president of NYCRAA, as long as tenants willingly provide a deposit, it is fair game, as long as the policy is applied uniformly. That strategy has even held up in a Rochester court, according to Cain.
Cain also advised landlords to amend their master lease to include a clause allowing termination of the lease for “any conduct objectionable, criminal or offensive to the landlord’s discretion, whether it is on or off the property,” until “Good Cause passes,” she said. The inclusion of the clause helped one of Cain’s clients terminate a lease for a tenant who had a DUI off the property, she said.
The organizers of the legal session also encouraged everyone in the 400-person audience to get a Twitter account, noting that social media played a crucial role in the lead up to the rent law expansion. Powerful New York City-based real estate trade associations poured millions into an unsuccessful digital campaign that highlighted the challenges for small New York City landlords, while the tenant coalition spent just $150 on targeted ads, used Twitter to track elected officials’ sentiment and called out members of the legislature who were on the fence.
Matthew Lyman, president of Albany-based Ideal Legal Support Services, offered some unsolicited legal advice to the crowd. Unprompted by the panel conducting the session, Lyman, who is not a lawyer, bragged that his firm presided over the eviction of as many as 15,000 tenants in the capital region. But he warned that under the new law, landlords who engage in retaliatory evictions could face a $10,000 fine. Retaliatory evictions, which include locking a tenant out or shutting off utilities, are now considered a misdemeanor under the Housing Stability and Tenant Protection Act of 2019.
“If you want to evict your tenant, shut your mouth. Do not tell them,” Lyman said. “The next call you get will be from code enforcement, about the missing smoke detector and the windows they busted out that you have to fix.”
The changes to the way small landlords operate upstate were swift and far-reaching, but many recognized that this is just the first step toward even more stinging legislation, such as Julia Salazar’s failed “Good Cause” eviction bill. Others are hopeful that lawmakers will see the errors of their ways and make revisions that favor the real estate industry.
Dean Caroll, from High Peaks Capital in Victor, New York, said lawmakers now seem more willing to listen to the business community. “It’s only been two months, but there has been a realization that they made a mistake.”