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Fresh dilemmas arise from New York’s landmark rent legislation

Guzov's Good Advice, Other, Real Estate Legality

One important provision in New York’s landmark changes to rent laws in June 2019 was a twenty-dollar cap on application fees for prospective tenants. However, as the New York Times reported recently, many prospective tenants this summer have found themselves paying hundreds of dollars to brokers for application and “processing” fees–substantially elevating the upfront cost of renting and undermining the spirit of the new laws, which aimed to strengthen tenant’s rights. [1]

However, it appears that imprecise language in the new legislation has failed to distinguish between brokers and landlords, creating the space for fees that exceed the new cap. As the Times reported, regulators and lawmakers have yet to offer clarity on this and other issues arising from ambiguities in the new law, such as whether extra money for a security deposit may be charged if tenants have a pet. The new laws governing fee restrictions may also affect co-ops, which typically charge substantially higher application fees, although this too remains unclear.

Although these and other issues will surely be resolved in time, the new law has created fresh dilemmas for many parties involved in New York City real estate, suggesting the legislation ought to have been better and more precisely crafted.

[1] Ferré-Sadurní, L. (September 2019) $500 to Apply for an Apartment? So Much for the $20 Cap in the New York Times https://www.nytimes.com/2019/09/03/nyregion/apartment-rental-application-fees.html accessed September 6 2019

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