New York Evictions Are Plunging Under New Rent Control Law

By Massimo F. D'Angelo

WSJ analysis shows decline was steepest for landlord cases against tenants who fell behind on rent payments; ‘It’s like an earthquake in housing court’

By Josh Barbanel

Nov. 26, 2019

A new tenant protection law enacted by the state may already be paying off for tens of thousands of New York City renters, as the number of eviction cases filed by landlords has plummeted.

The decline was steepest for the most common type of cases, those brought by landlords against tenants who fell behind on rent payments, according to a Wall Street Journal analysis of court data.

The new law eliminated certain incentives for landlords to turn over rent-regulated apartments because they could no longer significantly raise rents on the next tenants, or remove most apartments from city rent rules.

As a result, New York landlords—not known for their patience when it comes to late rent checks—appear to be giving tenants more time, lawyers said.

New eviction cases against city tenants for nonpayment of rent are down by more than 35,000 since the law was signed on June 14, compared with the same period in 2018, a drop of 46%, according to The Wall Street Journal’s analysis.

These shifts were part of a major upheaval in housing court as judges and lawyers rushed to adapt to dozens of changes in a 74-page bill, known as the Housing Stability and Tenant Protection Act of 2019, passed by Democratic-controlled legislature and signed by Gov. Andrew Cuomo.

“It’s like an earthquake in housing court,” said Massimo D’Angelo, a lawyer who represents a number of large building owners in housing court.

He said the changes in the law were so extreme that some landlords were “too scared and too skeptical” to bring even routine cases. They worry that the measure expands the rights of tenants to make counterclaims against them.

“I think it is a wonderful thing,” said Assemblywoman Linda B. Rosenthal of Manhattan, a sponsor of the new law. “The incentive for landlords to get rid of tenants is gone.”

The new law was designed to give tenants more legal protections and preserve affordable housing. As a result, both landlord and tenant lawyers expected owners to drop some more complex cases known as “holdovers” in which landlords try to evict tenants for violating terms of their leases.

In the past, these cases brought against tenants, for example, for illegally subletting their units or using them as a second home, would allow landlords to remove below-market rate apartments from rent regulation. Landlords would collect vacancy increases and increases to cover the costs of renovations. If rents rose above a threshold, the apartment could be leased at market rents. This is no longer an option.

These holdover cases also declined by an average of 11.8% since the new law was passed, compared with the same period in 2018.

But the lawyers were surprised by the steep decline in more routine nonpayment cases, where landlords sue tenants who didn’t pay the rent on time.

Judge Jean T. Schneider, the supervising judge for housing courts in the city, confirmed the steep decline in nonpayment cases.

She said the initial drop was due to new eviction rules that gave tenants more time to respond to lawsuits. For example, landlords were required to wait 14 days, rather than three days, to file suit, after giving the tenant notice.

These filings fell 61% in July and 68% in August compared with similar periods in 2018, and bounced back a bit since then. But in the court term that began on Oct. 7, these filings were still down sharply—35% below filings in the same term in October 2018.

Judge Schneider said the longer notice periods also gave landlords and tenants more time “to work things out.”

Judith Goldiner, attorney in charge of the civil law reform unit of the Legal Aid Society, attributed the decline in filings to the new law and city programs that provide lawyers to more low-income renters in housing court.

“Fewer cases are good for everyone,” she said, “They are good for tenants and good for landlords because no one thinks going to housing court is a good thing.”

Lawyers say that the new rules threw a monkey wrench into otherwise simple cases, because they allow rent-regulated tenants to challenge past rent charges going back decades to the mid-1980s. In the past, the look-back period was typically limited to four years.

Now when tenants say the rent was raised too much, because of a renovation decades ago, landlords will have to provide evidence to justify the increase, even if they didn’t own the building at the time. Landlords can be liable for triple damages, going back six years, under the new law, for rent overcharges.

“If the numbers are down it is either because tenants are paying or because landlords are afraid to bring cases,” said David Skaller, a partner at Belkin Burden Wenig & Goldman LLP, a lawyer who represents landlords.

Mr. Skaller has also dropped holdover cases for some of his clients. However other holdover cases are continuing, such as when a tenant is causing a nuisance for building staff or other tenants.

Original Article

Adam Leitman Bailey, P.C.