In April of 2024, the New York state legislature passed a new budget that updated landlord-tenant regulations.
The new “good cause” eviction rules prevent New York City property owners and operators from evicting holdover tenants at the end of their lease term, if they haven’t violated lease rules or local laws. In effect, that means landlords must renew lease agreements unless they meet specific exception criteria. The new law also adds new rent stabilization policies and opens the door for all other New York cities and municipalities to opt in.
But what constitutes good cause evictions? Which rental units are covered, and which are exempted? And how can property managers and landlords protect against losses under the New York Good Cause Eviction Law?
The law comes with some confusion and contention, so we’re here to break it down for you.
What is the “Good Cause” Eviction Law in NY?
New York joined several other renter-friendly states such as California, New Jersey, and Florida to pass statewide tenant protection rules limiting property owners from non-renewing rental contracts and restricting rent increases.
The new law took effect immediately as of April 20, 2024, but gives property owners and managers a four-month window to comply with the disclosure requirements.
Mandatory lease renewals
Once a renter moves in, property managers and landlords must continue renewing their lease contract even after it expires, unless they have “just cause” to non-renew the lease or evict the tenant.
Good Cause Eviction Law includes a list of allowed exceptions, such as tenants who break the law or lease rules (more on what constitutes good cause evictions shortly).
The law also features carve-outs for some property owners. Exceptions include smaller landlords with fewer than 10 units and owners and operators of newer buildings built before 2009.
Rent stabilization rules
Property operators may only raise the rent by a “reasonable” amount each year, and cannot evict renters for non-payment of rent when the amount is considered “unreasonable” based on a threshold defined in the law.
The Good Cause Eviction Law marks the threshold for “unreasonable” as the lower of either 10% per year or 5% plus the consumer price index (CPI) rate. As of 2024, the current CPI of 3.3%, plus 5%, puts the annual rent hike cap at 8.3%.
But the law ultimately leaves the decision for what counts as “reasonable” in judges’ hands. Judges could allow higher rent hikes for units that recently experienced major repairs or property tax hikes, for example.
Disclosure rules
Property managers or owners must disclose to renters in writing whether their unit falls under the law’s coverage or is considered an exception.
The disclosure should be included in new and renewing lease contracts moving forward. Property operators must also send written notice by August 20, 2024.
Expiration
The rules created by the good cause eviction law expire on June 15, 2034, unless renewed by the New York state legislature between now and then.
In the meantime, municipalities can opt in or out as they prefer.
What constitutes good cause for eviction or non-renewal
These are the following reasons a property operator or landlord can evict a tenant:
Demolishing the building
Family member moving into the unit
Nonpayment of rent: Operators and landlords can file for eviction unless a recent rent hike was defined as unreasonable.
The tenant violates a substantial obligation of their tenancy: This leaves room for discretion as there is no defined way to qualify what actions are substantial. For example, if the renter brings an unauthorized hamster as a pet into the unit when the lease specifies no pets, does that count? What about a cat? A small dog? A large dog? The law leaves the word “substantial” up to judges to interpret.
The tenant uses the property for illegal means.
When property managers or landlords file in court for eviction, they must declare in writing the total number of units owned—because small landlords enjoy an exemption from the new anti-eviction policy.
Units not covered by the law
Not every rental unit falls under this new tenant rights law in New York.
To begin with, the good cause eviction law only applies to units owned by landlords who own more than 10 units. That’s easy enough for buildings with more than 10 units, but gets murkier for multiple buildings that together add up to more than 10 units.
Technically, the Good Cause Eviction Law applies to buildings owned by different limited liability companies (LLCs) that are all owned by the same person. But renters and tenant advocacy groups may struggle to prove singular ownership in court.
The Good Cause Eviction Law also exempts buildings with 10 or fewer units, when the owner lives in one of the units in that building. So, an owner could own 40 units, but the building where they live would still qualify for an exception.
Mobile homes, co-ops, condominiums, dorm buildings, hotels, seasonal rentals, and apartments covered by separate rent regulations are also exempted. The law also provides an exception for new buildings with a certificate of occupancy issued in 2009 or later (you can check a building’s certificate of occupancy at the NYC Department of Buildings website).
Finally, the law includes an exception for high-end rental units. The Good Cause Eviction Law exempts units rented for 245% more than local fair market rent, as established by the Department of Housing and Urban Development (HUD).
Where does the Good Cause Eviction Law apply?
While the New York State Legislature passed the Good Cause Eviction Law, it applies specifically to New York City.
Other towns and municipalities in the state of New York can opt into the law if they so choose.
The burden of proof
If tenants want to object to a rent hike on the grounds that it is “unreasonable,” all they have to do is stop paying their rent. The property operator would then have to serve an eviction warning notice, file for eviction, show up in rent court, and then prove to the judge that the increase in rent was in fact reasonable.
Renters face little penalty for doing so. If the judge rules against them, they simply have to do what they were contractually obligated to do in the first place: pay their rent. If the judge rules that a rent increase was unreasonable, they score lower rents moving forward.
Tenants who live in buildings with 10 or fewer units may have trouble proving that their landlord owns more than 10 units, however. The website Who Owns What links properties to individual owners, but doesn’t maintain perfect records.
Still, landlords must disclose all owned units when they file in court for eviction. If they fail to do so, they could perjure themselves on a legal document submitted to the court system.
How to protect yourself as a property owner
The New York Good Cause Eviction Law marks a major win for housing justice advocates. New York City already had strong tenant safeguards and eviction protection, but now property owners have no choice but to renew tenant’s rental contracts unless they’ve committed an evictable offense.
While New York City already had many units under rent stabilization rules, now most rental units qualify for them. Landlords must justify all rent increases as “reasonable” in order to enforce their lease agreements.
When in doubt as a landlord or property manager, speak with a landlord-tenant attorney. Changes in legal rights for tenants can quickly get confusing, especially for smaller landlords. If you don’t know how to navigate the new legal landscape, consult with a legal expert.
You can also insure against losses from rent defaults with Rent Coverage from TheGuarantors. When tenants stop paying, rent coverage kicks in to make payments while you go through the eviction process.
It becomes all the more important to screen tenants thoroughly before signing a lease, when you can’t non-renew that lease in the years to come.
Lastly, consider investing in more owner-friendly markets in the future. That doesn’t help you with your existing rental investments, but it can prevent you from losing money on future investments due to new tenant defense laws like this continuing to change the rules in the years to come.