The Legal Aspects of Rent Increases in NYC

As a landlord in New York City, navigating the complex landscape of rent regulations is critical to the successful and lawful management of your rental properties. New York City’s rental market is unique, and one of the most contentious aspects of this landscape is the process of rent increases. Learn about the legal implications of rent increases in NYC and
how to navigate these aspects legally and effectively.

Legal Notification Requirements and Process

Prior to implementing any rent increase, it is essential to be familiar with the legal notification requirements and processes prescribed by New York State law. The amount of notice required depends on the duration of the lease and whether the unit is rent-stabilized, rent-controlled, or neither.

For market-rate apartments, New York State law, as of the Housing Stability and Tenant Protection Act of 2019, requires landlords to provide tenants with the following notice periods before raising rent by more than 5% or choosing not to renew their lease:

• At least 30 days’ notice if the tenant has lived in the apartment for less than one year and does not have a lease term of at least one year;
• At least 60 days’ notice if the tenant has occupied the apartment for more than one year but less than two years, or has a lease term of at least one year but less than two years;
• At least 90 days’ notice if the tenant has occupied the apartment for more than two years or has a lease term of at least two years.

For rent-stabilized apartments, the New York City Rent Guidelines Board (RGB) sets the maximum allowable rent increases for lease renewals, and landlords must give tenants a renewal lease between 90 and 150 days before the existing lease expires. Rent-controlled apartments have their rent increases determined by the Maximum Base Rent system and require a separate set of notices through the Division of Housing and Community Renewal (DHCR).

Navigating Rent Guidelines Board Recommendations

Landlords of rent-stabilized units must pay close attention to the Rent Guidelines Board (RGB). Each year, the RGB votes to set the allowable rent increases for lease renewals of rent-stabilized apartments. These guidelines define the maximum percentage a landlord can legally increase rent for one-year and two-year lease renewals. It’s important to note, that these rates apply only to rent-stabilized apartments, which are a significant portion of NYC’s rental units.

Navigating RGB recommendations successfully entails staying informed about annual meetings, public hearings, and the final vote, typically occurring in late June. Compliance with these guidelines is crucial to avoid legal violations and potential disputes with tenants.

How Much Can Rent Be Increased Annually?

For non-regulated apartments, generally referred to as market-rate apartments, landlords have more flexibility in setting rent prices. However, even in this sector, landlords are expected to adhere to the legal notification periods mentioned earlier. They must also ensure that any rent increase does not constitute rent gouging, which is illegal under New York State law, especially during states of emergency.

For rent-stabilized apartments, the annual allowable rent increases are explicitly outlined by the RGB’s guidelines. It’s crucial for landlords of these units to apply these guidelines accurately to ensure compliance with state laws and regulations.

Additional Considerations

Beyond understanding the legal notification requirements, RGB recommendations, and the limits on rent increases, landlords should also consider other legal aspects and best practices:

• Ensure any rent increase is justifiable, especially in a market-rate apartment, to maintain good tenant relationships and avoid potential legal challenges under claims of rent gouging.
• Keep detailed records of all communications with tenants regarding rent increases and lease renewals to have clear documentation in the event of disputes.
• Stay informed about additional protections that may apply to certain tenants, such as senior citizens or disabled individuals, which may provide exemptions or limitations on allowable rent increases.
• Consider the implications of Major Capital Improvements (MCIs) and Individual Apartment Improvements (IAIs) for rent-stabilized units, as these can legally justify rent increases beyond the annual guidelines under certain conditions.

The Bottom Line

Raising rent in New York City is a complex process governed by a myriad of laws and regulations. As a landlord, it’s not only about understanding what you can do but also about navigating how to do it in a manner that is lawful, respectful, and transparent. The key to successfully managing rent increases lies in staying updated with the latest laws and regulations, keeping open lines of communication with your tenants, and meticulously documenting all transactions and communications.

Remember, the aim should not only be compliance with the law but also fostering a positive relationship with your tenants. A fair and just approach to rent increases can contribute significantly towards this goal, ensuring a stable tenancy and a reliable income stream for landlords. Given the complexity of New York City’s rental regulations, consulting with a legal professional who can provide valuable guidance and help you navigate the intricacies of rent increases comprehensively.

Navigate NYC Rent Increase Regulations With Confidence

Navigating rent increases in New York City can be a complex ordeal for landlords and property owners. With Belkin Burden Goldman, LLP, on your side, you can leverage our decades of experience in New York real estate law to help advise you on compliant and effective rental practices. Connect with us today.