What you need to know about being a landlord, with the new eviction laws in NYC

Owning a multifamily home in New York City offers a number of advantages including rental income and additional financing options. But recent changes to New York rental laws have made it even more important to be fully informed before going the landlord route. Many multifamily building owners and potential buyers are asking what do I need to know about being a landlord with the new eviction laws in NYC?

I’ve wanted to do an article on this for a while, and then happened upon this Instagram post from Realtor Salvatore Taormina. I reached out to get an experienced perspective from an owner of NYC multifamily properties in order to really dissect how these recent laws affect landlords and what some effective strategies are when owning multifamily properties.

Salvatore Taormina is committed to excellence in the world of NYC real estate. His core foundation of integrity and hard work have quickly established him as a market leader. Having sold and closed on properties across the city, he is well equipped to handle your every need. Sal takes a customer-first approach, understanding that your time is your most valuable commodity. Taking the time to truly listen to his clients’ needs, he custom tailors his marketing strategies and search processes to help to ensure maximum efficiency that produces real results. His commitment to honesty, integrity and openness coupled with superior real estate knowledge make him a one-stop shop for all your real estate needs. He can be reached at 718-938-0662.

1. How have recent NYC rent laws made owning a multifamily property more challenging?

One reason why recent NYC laws have proved challenging is that NYC turned a 30 notice into a 90 day notice for eviction, so a tenant has an additional 60 days until the official start date of an eviction. So if you have a tenant who isn’t paying, you have to wait three months with no rental income from that tenant to even start the eviction process, and the eviction process itself is already very lengthy.

The other issue is that there is a new Good Cause Eviction Law that applies to landlords who own 10 or more units. It says that a landlord can’t evict even if they aren’t getting along with other tenants. You have fewer legitimate reasons to evict a tenant besides non-payment. I had an issue with a tenant where the city was paying the rent – Section 8 – where the tenant was disturbing other tenants in a three family building. It got particularly out of hand when the young child of one of the tenants accidentally took a package of a problematic tenant that was then returned, but all hell broke loose, and a relative of the tenant who had the package delivered was outside the building with a gun and shot it off. This was all caught on camera. It turned out that the guy who shot the gun had been arrested 17 times already, and only the last time he went to jail because of the evidence. The tenant with the child ended up moving, but there was no way to get the tenant who was causing problems out, other tenants were scared. The tenant who was causing problems had been repeatedly threatening the other tenants so they did not want to go in the hallways.

So that’s an example where the landlord can be powerless to evict a tenant who is affecting the safety and security of the other tenants under these new laws. You can’t make a decision to not renew a lease for a tenant that is affecting others’ quality of life and sense of peace. And ultimately, this of course effects whether or not your building is a good investment or not. If you can’t keep tenants due to one problematic tenant, that becomes your big financial problem. These are things you need to know when being a landlord with the new eviction laws in NYC.

2. What are some of the big things to be aware of if someone is considering buying a multifamily building in New York City?

One thing that’s important for landlords to have is cash reserves, because you don’t know when you may have an expense. I had a tenant who filed a complaint for no heat. In this particular case, the tenant was responsible for paying their heating bill, but didn’t pay the bill. So the city came and took the gas meter! They cited a judgement for no heat. So even though the tenants were responsible for keeping current on the bill, the city took the meter. I had to pay $5,000 to restore the meter and the heat. So that’s an example of a gray where you can have an unexpected expense: the tenant and landlord are both responsible, but city charges the landlord.

Another example is that there was a recent proposal for landlords to provide their tenants with air conditioners. So a tenant of mine requested an air conditioner. I bought it for her and left it at her door. The tenant gave it to her friend and said she needed another air conditioner. So I should have made her sign something, instead of trusting that she would act in good faith.

This air conditioner proposed law doesn’t stipulate how many air conditioners. But it proposes that the landlord “install and maintain air conditioner so that temperature inside is 78 or lower” or you get fines like you do for heat, which is $350 to $1,200 per day.

Another pitfall can be whether texting too much constitutes harassment. I watched an HPD seminar saying if you keep texting the tenant they could file harassment charges, which I certainly do not want. So now I’m afraid to text my clients too much. You want to educate yourself continuously on how HPD is considering enforcement against landlords because there can be a lot of changes in interpretation.

3. What are some of the best strategies you’ve seen to deal with the down sides being a landlord with the new eviction laws in NYC?

You definitely need reliable contractors. During heating season, if a tenant has no heat you only have a limited amount of time to fix it. So you want to have a contractor available to do emergency repairs. I had a tenant once who said the hot water was not hot enough, and it was just a matter of turning up the knobs, but because I didn’t fix it immediately the city charged me $80. There are a lot of time sensitive things like that where you can get fined.

I have a friend who has 400 units and to reduce liability, his friend uses virtual assistants. That way the tenants always have someone to call and the virtual assistants are trained to give good customer service and have contacts they can call to resolve issues or get the ball rolling on solving issues. Even though multifamily owners would like to be independent, many of them have full time jobs and can’t field a lot of phone calls.

As for quality tenants, referrals go a long way. On one of my properties, I have tenants who are a family, and then they referred a cousin and a friend. They are all good tenants, clean up after themselves, respect the other tenants and pay on time.

4. What are some other possible tenant issues that people might want to be aware of?

In order to comply with fair housing, you can’t pick and choose your tenants, though you can get referrals for open apartments. I have a friend who owns some apartments where a lady wanted to be in a building and made a complaint that she wanted to be in a building but wasn’t getting a call back. So people can report you if you aren’t responsive to people applying.

Also, if someone has a service animal, you can’t discriminate. I had a pet-free building and accepted a new tenant who didn’t have a pet. The tenant ended up getting a dog once she got a lease. She went on a website and registered it as a service animal. The tenant hired HPD as a liaison. One of the other tenants has a severe dog allergy. The tenant was able to keep the dog, and now there’s no way to evict them. HPD allows the tenant to get a lawyer and fight the eviction, even though it adversely affects the other tenant.

Also, the eviction process for a non-paying tenant takes longer than you might think. I had a tenant who stopped paying rent last August. I had a court date in December and even waived the rent amount due in order to get the tenant out sooner. The judge signed the order to vacate on May 15th, but the tenant kept saying “I’ve been looking and I can’t find anything” so he’s still living in the building, not paying rent a year later.

5. As I saw on your Instagram, you sold a multifamily in New York City and bought a property in New Jersey to VRBO. How does the experience compare between a NJ VBRO and a NYC multifamily?

Well, that story is still unfolding. I sold the multifamily and it was an easy process. Then I looked for and found places by the beach and water. I have a great referral base to find properties. But I can’t comment on how it will go because I just did it. But I like to walk the walk, show people what I’ve done and have expertise in so they can learn from real life experience. So I guess, stay tuned!