Re: Bill S.3082 - Good Cause Eviction
The idea of “Good Cause Eviction” has consistently and persistently lingered on the floor of the New York State legislature in some form or another. It appears that the so-coined death blow to NYC real estate has been elevated from a mere tenant right aspiration to a genuine threat to NYC landlords. The time has come, therefore, to examine the bill currently in committee in the house and the senate, and potentially brace for the impact.
Bill S.3082 (and its counterpart assembly bill) is the most recent attempt by the NYS legislature to pass good cause eviction.
For those not familiar with the concept, “good cause eviction,” is a relatively simple concept. Should the Bill pass, a landlord may not remove or attempt to remove a tenant, refuse to renew a lease, or remove by other means a tenant in a covered unit except upon an order of a court finding “good cause” for such removal.
Which units are covered?
With the limited exceptions set out below, good cause eviction will apply to all residential housing accommodations (including mobile homes and land in a mobile home park) that aren’t currently subject to rent stabilization or rent control.
Good Cause Eviction will not apply to:
Owner-occupied premises with less than 4 units;
Sublet premises but only where the Sublessor (tenant) seeks to recover possession for his or her own personal use and occupancy;
Units the possession of which is solely incident to employment, and such employment is lawfully terminated (Superintendent Units);
Units covered under other regulation or law that already requires good cause for termination or non-renewal of tenancies (Rent Stabilized or Rent Controlled Units).
We note that “tenant” is defined very broadly, including “any person entitled to possession” and explicitly includes hotel occupants that have possession for 30 days or longer.
What constitutes Good Cause eviction?
Below is a list of the only cause (legal grounds) a Landlord could use to convince a court that a tenant should be evicted. Importantly, these grounds will have to be plead and proved to a court, which is in itself, will be a hurdle that will cause indefinite delays in the leasing process.
The following constitute grounds for Good Cause in S.3082:
Tenant has failed to pay rent due and owing. However, such cause will not be considered grounds for good cause if there was an “unreasonable” rent increase, or an increase imposed for the purpose of circumventing the intent of this law.
There shall be a rebuttable presumption that an increase is unreasonable if the increase is more than the greater of 3% or 1.5 times the annual percentage change in the Consumer Price Index for the region in which the accommodation is located.
Tenant has violated a “substantial obligation” of his or her tenancy, provided such obligation was not imposed for the purpose of circumventing the intent of this law
Tenant is committing a nuisance or interferes with the comfort of the landlord or other Tenants.
Tenants occupancy is in violation of law, landlord is in subject to civil and criminal penalties for such occupation and an agency has issued an order requiring a tenant to vacate.
Such violation will not constitute good cause unless a court finds that the cure for such violation requires removal of the tenant, and that such condition was not created by landlord action or inaction.
Tenant is using the unit for an illegal purpose.
Tenant has refused access to the landlord for repairs required by law, showing the accommodation to a prospective purchaser, mortgagee or other person having a legitimate interest.
Landlord has an “immediate and compelling necessity” to occupy a unit as his or her principle residence, or that of 1st degree relatives, and no other suitable unit in the building exists.
These grounds are limited to only one unit per building, to buildings with fewer than 12 units, and may not be used to evict anyone 62 years or older or disabled.
Landlord seeks in good faith to vacate any or all units in a building with less than 5 units to personally occupy such housing accommodation as his or her principle residence.
How good cause will be applied in practice?
S.3082 leaves substantial gaps in the law that will likely have to be colored by practice and judicial opinions. As it stands, S.3082 appears to require landlords to bring a court action whenever they want to refuse a lease renewal or evict a tenant. Section 214 states “No landlord shall remove a tenant from any housing accommodation, or attempt such removal or exclusion from possession, notwithstanding that the tenant has no written lease or that the lease or other rental agreement has expired or otherwise terminated, except upon order of a court of competent jurisdiction entered in an appropriate judicial action or proceeding in which the petitioner or plaintiff has established one of the following grounds as good cause for removal or eviction…”
What this likely means in practice is a landlord cannot, for example, refuse a renewal upon a reasonable belief of good cause, e.g., the tenant owes rent. In other words, if a tenant has refused to pay rent, you cannot refuse to renew that tenants lease without first bringing an action against him in court. In other words, every attempt to vacate a unit, would require a legal action (potentially a declaratory action). What is unclear however, is what the remedy for vacating a unit without a court order will be. Could a tenant that was instructed by the landlord to vacate a unit, and complied with such instruction, sue to regain possession of a unit after same is vacated, even if good cause existed?
Other important provisions:
S.3082 provides for a private right of action (and the right to recover damages) against fraudulent statements made by a landlord or a purchaser when attempting to recover possession on the grounds that he intends occupy the subject unit.
As with Rent Stabilization, good cause eviction cannot be waived by contract.
S.3082 includes a severability clause. Meaning, any provision of the law that is found unconstitutional/unenforceable can be struck, and the rest of the law remains applicable.
The law is applicable to actions and proceedings after the effective date of the law. In other words, it will apply to all leases in effect on the date it passes.
Email to clients:
Dear Client:
Good Cause eviction appears to be on track to becoming a grim reality for NY landlords. For your convenience, we have attached a memorandum produced by our firm outlining the main points of the good cause eviction bill currently in committee. Below is a high-level outline of what to expect if such bill is passed.
The law will apply to all free market apartments regardless of building size, with some minor exceptions for owner occupied buildings.
The law will prohibit any type of removal (including non-renewal) without a showing of Good Cause.
Some of the main grounds for Good Cause:
Non-payment of rent, provided there wasn’t a rent increase of over 3%.
Violation of a “substantial obligation” of the lease.
Tenant is committing a nuisance or occupying for an illegal purpose
Landlord intends to occupy the unit as primary residence (with prescribed limitations).