NYC-based boutique law firm Pardalis & Nohavicka brings the latest legal updates from the world of real estate to PropertyShark. Pardalis & Nohavicka handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions, currently litigating and representing clients throughout the United States and around the world.
With summer approaching, thoughts of beach trips and rooftop cocktail parties quickly flood the minds of New York City professionals. However, those in the real estate industry should not be so quick to check themselves into vacation mode just yet. In less than one month, there may be some major upheavals in real estate, as the laws that regulate rent-stabilized properties are set to expire on June 15, 2019.
The current rent regulation laws, which have been in place for over 20 years, are set to expire and will likely set off a chaotic struggle between tenants and landlords. Politicians and advocates alike have swooped in during this crucial time of legal reconsideration to propose a set of nine bills with the intention of enacting a form of universal rent control.
The progressive wave for real estate law reform is leaving property owners with a deep-rooted fear of being unable to afford repairs and necessary maintenance for their buildings. Here is a guide to some of the most significant points within the new set of proposed bills that all property owners should be aware of:
- Good Cause Eviction
This bill would prohibit property owners from evicting tenants or failing to renew a lease without “good cause,” such as failing to pay rent, violating an obligation of the tenancy, committing a nuisance, or allowing the premises to be used for illegal purposes.
- Vacancy Decontrol
This bill revisits previous rent laws that allow property owners to deregulate units, removing them from rent control once the property is vacated and renting them for over $2,700 per month. The bill seeks to repeal vacancy decontrol and reregulate properties that have fallen through this loophole.
- Maintaining Preferential Rent
Property owners may charge a tenant a “preferential rent” which is less than the legal regulated rent when the property does not meet the market value price. However, when the lease is up, the property owner is within their right to revert to the higher regulated rent, which could cause major rent hikes for tenants. This bill seeks to prevent property owners from raising the preferential rent upon renewal of the lease. According to the bill, they would only be allowed to do so in instances of vacancy.
- The Vacancy Bonus
Under the current laws, when there is a new vacancy, property owners are allotted a vacancy bonus in which they can increase the rent 20%. This has allowed for instances in which a landlord may fail to maintain living conditions, indirectly pushing tenants out of their homes, turning the apartment into a market rate property. This bill seeks to eliminate the vacancy bonus for property owners.
- Rent Hikes for Renovations
By current laws, property owners may raise the rent on rent stabilized apartments when upgrading the building or improving individual units, even after they have recovered renovations costs. This bill seeks to repeal provisions of the law allowing property owners to increase rent due to property improvements.
While the new set of proposed bills are still under examination, all tenants, renters, and property owners should be aware of the impending changes in rent regulation laws, as they have the potential to significantly alter the state of the real estate industry in New York.
Taso Pardalis is a founding partner of the Law Offices of Pardalis and Nohavicka, a leading full- service NYC law firm with offices in Manhattan, Queens and WeWork. Taso may be a well-known attorney with many cases making headlines in major media outlets, but at heart, he is a true entrepreneur that believes in supporting the small business community. His areas of concentration are: Intellectual Property, Trademarks, Corporate, Business Law and Real Estate Law.
Contributing Legal Writer Katrin Vulaj has just recently graduated from The New School with a Master’s degree in Media Studies. She is currently part of the Media Relations team at PN Lawyers where she creates and edits digital content, manages social media presence, coordinates events, and works on overall marketing and publicity efforts.