What Rights Do Free Market Tenants Have In NYC?

Tenants of unregulated, free-market apartments in NYC have several automatic rights and protections which we outline in this article. These include the rights to sublet and to have a roommate, limitations on the size of security deposits, protections under the warranty of habitability, limitations on advance rent payments and advance notice requirements for non-renewal or rent increases above 5%. These protections exist regardless of the specific language in your lease.

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Limitations on security deposits

Your landlord may not collect a security deposit in excess of one month’s rent.

New York security deposit laws were tightened under the Housing Stability and Tenant Protection Act of 2019.

Right to interest on your security deposit

If you live in a landlord-owned building with six or more units, you are entitled to any annual interest collected on your security deposit in excess of 1%.

Your landlord must place your deposit in a New York bank account earning interest at the “prevailing rate.” The landlord may retain annual interest paid up to 1% as an administrative fee.

Tenants of unregulated, free-market apartments in NYC have several automatic rights and protections.

For example: Your security deposit is $5,000 and the interest rate is 0.75%. Since the prevailing interest rate is less than 1%, the landlord is entitled to keep the full amount of annual interest earned on your deposit.

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Here’s another example: Your security deposit is $3,500 and the interest rate is 1.75%. Total annual interest earned is $61.25 (1.75%). Of this, the landlord may keep $35 (1%) as an administrative fee. You are therefore entitled to interest in the amount of $26.25 (0.75%).

You may request to have your security deposit interest paid out annually, paid in a lump sum at the end of the lease term or applied to rent.

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Right to a timely return of your security deposit

Your landlord must return your security deposit within 14 days of moving out. If a landlord withholds any portion of the security deposit, the landlord must furnish the tenant with an itemized receipt of the damages and associated repair costs within 14 days of the tenant moving out. 

If a landlord fails to provide a receipt within 14 days of move-out, the landlord relinquishes her or his right to withhold any amount from the deposit regardless of whether or not there are damages.

Additionally, you have the right to request an inspection prior to move-out. To avoid having anything withheld from your security deposit, you are permitted to rectify anything the landlord brings up at the inspection prior to vacating the unit.

Limitations on advance rent payments

Rental market regulatory changes enacted in 2019 also prohibit the prepayment of rent in excess of the first month’s rent. This means that the maximum amount of money a New York City landlord may collect upon lease signing is one month of rent and a one month security deposit, for a total of two months.

This provision is designed to make the rental market more accessible by prohibiting prospective tenants from gaining an advantage over other renters by offering to pay a large amount of rent upfront.

Prior to the passage of this law, it was not unheard of for tenants to prepay 6 months or even an entire year of rent in order to outmaneuver less wealthy tenants.

Advance notice of non-renewal or rent increases above 5%

Your landlord must provide advanced notice if she or he intends to raise the rent by more than 5% or if a renewal is not being offered. Minimum notice periods are as follows:

  • 30 days in advance if you’ve lived in the apartment less than one year and have less than a 12-month lease 

  • 60 days in advance if you’ve lived in the apartment for one to two years or if your lease term is between one and two years 

  • 90 days in advance if you’ve lived in the apartment for more than two years or if your lease term of at least two years

Right to a roommate

You have the right to a roommate even if your lease explicitly states otherwise. The right to a roommate is enshrined in New York Real Property Law § 235(f), which is often referred to as the “Roommate Law.”

If your landlord violates the roommate law, you may go to court to seek an injunction to enjoin and restrain such unlawful practice.

You can also sue for actual damages and to recover court costs. Your lease may also entitle you to recover attorney fees.

However, keep in mind that the Roommate Law does require you to inform the landlord of the name of any occupant within thirty days following the commencement of occupancy by such person or within thirty days following a request by the landlord. 

New York Real Property Law § 235(f) is shown below:

235-f. Unlawful restrictions on occupancy.

1. As used in this section, the terms:

(a) “Tenant” means a person occupying or entitled to occupy a residential rental premises who is either a party to the lease or rental agreement for such premises or is a statutory tenant pursuant to the emergency housing rent control law or the city rent and rehabilitation law or article seven-c of the multiple dwelling law.

(b) “Occupant” means a person, other than a tenant or a member of a tenant’s immediate family, occupying a premises with the consent of the tenant or tenants.

2. It shall be unlawful for a landlord to restrict occupancy of residential premises, by express lease terms or otherwise, to a tenant or tenants or to such tenants and immediate family. Any such restriction in a lease or rental agreement entered into or renewed before or after the effective date of this section shall be unenforceable as against public policy.

3. Any lease or rental agreement for residential premises entered into by one tenant shall be construed to permit occupancy by the tenant, immediate family of the tenant, one additional occupant, and dependent children of the occupant provided that the tenant or the tenant’s spouse occupies the premises as his primary residence.

4. Any lease or rental agreement for residential premises entered into by two or more tenants shall be construed to permit occupancy by tenants, immediate family of tenants, occupants and dependent children of occupants; provided that the total number of tenants and occupants, excluding occupants’ dependent children, does not exceed the number of tenants specified in the current lease or rental agreement, and that at least one tenant or a tenants’ spouse occupies the premises as his primary residence.

5. The tenant shall inform the landlord of the name of any occupant within thirty days following the commencement of occupancy by such person or within thirty days following a request by the landlord.

6. No occupant nor occupant’s dependent child shall, without express written permission of the landlord, acquire any right to continued occupancy in the event that the tenant vacates the premises or acquire any other rights of tenancy; provided that nothing in this section shall be construed to reduce or impair any right or remedy otherwise available to any person residing in any housing accommodation on the effective date of this section which accrued prior to such date.

7. Any provision of a lease or rental agreement purporting to waive a provision of this section is null and void.

8. Nothing in this section shall be construed as invalidating or impairing the operation of, or the right of a landlord to restrict occupancy in order to comply with federal, state or local laws, regulations, ordinances or codes.

9. Any person aggrieved by a violation of this section may maintain an action in any court of competent jurisdiction for: (a) an injunction to enjoin and restrain such unlawful practice; (b) actual damages sustained as a result of such unlawful practice; and (c) court costs.

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Right to sublet

If you’re renting in a building with four or more residential units, New York Real Property Law 226-b gives you the right to sublet the apartment provided you obtain written consent of the landlord in advance of the subletting. The landlord may not unreasonably withhold consent.

However, the law does mandate a rather pedantic process for actually exercising one’s right to sublet.

Firstly, the tenant must share a bunch of required information with the landlord via certified mail, return receipt requested. The following items must be submitted to the landlord:

  • the term of the sublease

  • the name of the proposed sublessee

  • the business and permanent home address of the proposed sublessee

  • the tenant’s reason for subletting

  •  the tenant’s address for the term of the sublease

  •  the written consent of any cotenant or guarantor of the lease

  • a copy of the proposed sublease, to which a copy of the tenant’s lease shall be attached if available, acknowledged by the tenant and proposed subtenant as being a true copy of such sublease. 

Afterwards, the landlord has the right to ask the tenant for additional information within ten days after the mailing of such request.

Thereafter, the landlord has up to 30 days after the mailing of the request for consent, or of the additional information reasonably asked for by the landlord (whichever is later) to send the tenant a notice of the landlord’s response. Landlord’s failure to send such a notice within this timeframe shall be deemed to be a consent to the proposed subletting.

Tenants in buildings with three or fewer units do not have a statutory right to sublet. This means that a landlord does not have to agree to a proposed sublet.

New York Consolidated Laws, Real Property Law – RPP § 226-b. Right to sublease or assign

2. (a) A tenant renting a residence pursuant to an existing lease in a dwelling having four or more residential units shall have the right to sublease his premises subject to the written consent of the landlord in advance of the subletting. Such consent shall not be unreasonably withheld.

(b) The tenant shall inform the landlord of his intent to sublease by mailing a notice of such intent by certified mail, return receipt requested. Such request shall be accompanied by the following information: (i) the term of the sublease, (ii) the name of the proposed sublessee, (iii) the business and permanent home address of the proposed sublessee, (iv) the tenant’s reason for subletting, (v) the tenant’s address for the term of the sublease, (vi) the written consent of any cotenant or guarantor of the lease, and (vii) a copy of the proposed sublease, to which a copy of the tenant’s lease shall be attached if available, acknowledged by the tenant and proposed subtenant as being a true copy of such sublease.

(c) Within ten days after the mailing of such request, the landlord may ask the tenant for additional information as will enable the landlord to determine if rejection of such request shall be unreasonable. Any such request for additional information shall not be unduly burdensome. Within thirty days after the mailing of the request for consent, or of the additional information reasonably asked for by the landlord, whichever is later, the landlord shall send a notice to the tenant of his consent or, if he does not consent, his reasons therefor. Landlord’s failure to send such a notice shall be deemed to be a consent to the proposed subletting. If the landlord consents, the premises may be sublet in accordance with the request, but the tenant thereunder, shall nevertheless remain liable for the performance of tenant’s obligations under said lease. If the landlord reasonably withholds consent, there shall be no subletting and the tenant shall not be released from the lease. If the landlord unreasonably withholds consent, the tenant may sublet in accordance with the request and may recover the costs of the proceeding and attorneys fees if it is found that the owner acted in bad faith by withholding consent.

Protection against unreasonable lease provisions

Landlords are prohibited from including specific lease provisions under New York State Law. In addition, sections of leases must be appropriately captioned and the print must be large enough to be read easily. (General Obligations Law § 5-702; NY C.P.L.R. § 4544).

The following lease provisions are not allowed according to the NYS Office of the Attorney General, as outlined here:

  • Exempting landlords from liability for injuries to persons or property caused by the landlord’s negligence, or that of the landlord’s employees or agents (General Obligations Law § 5-321);

  • Waiving the tenant’s right to a jury trial in any lawsuit brought by either of the parties against the other for personal injury or property damage (Real Property Law§ 259-c);

  • Requiring tenants to pledge their household furniture as security for rent (Real Property Law § 231);

  • Exempting landlords from mitigating the damages of a tenant vacating the premises before the lease expires (Real Property Law § 227-e);

  • Waiving the Warranty of Habitability (Real Property Law § 235-b); and

  • Restricting a tenant from living with their immediate family members and/or one additional occupant and the occupant’s dependent children (Real Property Law § 235-f ).

  • If a lease states that the landlord may recover attorney’s fees and costs incurred, a tenant automatically has a reciprocal right to recover those fees as well (Real Property Law § 234)

If the court finds a lease or any lease clause to have been unconscionable at the time it was made, the court may refuse to enforce the lease or the clause in question (Real Property Law § 235-c).

New York Consolidated Laws, Real Property Law – RPP § 226-b. Right to sublease or assign

2. (a) A tenant renting a residence pursuant to an existing lease in a dwelling having four or more residential units shall have the right to sublease his premises subject to the written consent of the landlord in advance of the subletting. Such consent shall not be unreasonably withheld.

(b) The tenant shall inform the landlord of his intent to sublease by mailing a notice of such intent by certified mail, return receipt requested. Such request shall be accompanied by the following information: (i) the term of the sublease, (ii) the name of the proposed sublessee, (iii) the business and permanent home address of the proposed sublessee, (iv) the tenant’s reason for subletting, (v) the tenant’s address for the term of the sublease, (vi) the written consent of any cotenant or guarantor of the lease, and (vii) a copy of the proposed sublease, to which a copy of the tenant’s lease shall be attached if available, acknowledged by the tenant and proposed subtenant as being a true copy of such sublease.

(c) Within ten days after the mailing of such request, the landlord may ask the tenant for additional information as will enable the landlord to determine if rejection of such request shall be unreasonable. Any such request for additional information shall not be unduly burdensome. Within thirty days after the mailing of the request for consent, or of the additional information reasonably asked for by the landlord, whichever is later, the landlord shall send a notice to the tenant of his consent or, if he does not consent, his reasons therefor. Landlord’s failure to send such a notice shall be deemed to be a consent to the proposed subletting. If the landlord consents, the premises may be sublet in accordance with the request, but the tenant thereunder, shall nevertheless remain liable for the performance of tenant’s obligations under said lease. If the landlord reasonably withholds consent, there shall be no subletting and the tenant shall not be released from the lease. If the landlord unreasonably withholds consent, the tenant may sublet in accordance with the request and may recover the costs of the proceeding and attorneys fees if it is found that the owner acted in bad faith by withholding consent.

Protection against high late fees

According to Real Property Law § 238-a, a landlord may not charge a late fee of more than $50 or 5% of your monthly rent, whichever is less.

Moreover, a rent payment may only be considered late if it’s received by the landlord more than five days after the due date.

Right to reasonable accommodations for disabilities

The New York State Human Rights Law requires landlords to make reasonable accommodations or modifications to a building or living space to meet the needs of people with disabilities.

Both real estate licensees (i.e. real estate agents) and housing providers (i.e. landlords) are required to present tenants with the official NOTICE DISCLOSING TENANTS’ RIGHTS TO REASONABLE ACCOMMODATIONS FOR PERSONS WITH DISABILITIES.

Real estate agents must provide this form to prospective tenants upon “first substantive contact.” Landlords must provide this notice within 30 days of tenancy.

This form (as well as other NY disclosure forms) can be sent via Cribfox, an app which allows agents to efficiently send required disclosure forms as well as custom documents for e-signature.

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Protection against harassment and retaliation

Your landlord may not harass or retaliate against you in order to entice you to move out or to waive any rights granted by law or by the language in your lease.

According to the NY Attorney General, harassment “may take the form of physical or verbal abuse, willful denial of services, disruptive construction or renovation projects that interfere with health, safety, and use of an apartment, or multiple instances of frivolous litigation.”

If your landlord lies or intentionally misrepresents the law, this also constitutes harassment.

“No landlord, or any party acting on the landlord’s behalf, may interfere with the tenant’s privacy, comfort, or quiet enjoyment of the apartment,” the Attorney General adds.

Right to a livable, safe and sanitary apartment

Your landlord is obligated under the warranty of habitability (NY Real Property Law 235-b) to keep your unit livable, safe and sanitary at all times. This obligation also extends to the common areas of the building. The statutory protections afforded by the warranty of habitability cannot be waived based on language in your lease.

Here are some examples of issues covered by the warranty of habitability:

  • Lack of heat or hot water

  • Electrical problems

  • Vermin problems

  • Broken appliances

  • Missing smoke or carbon monoxide detectors

  • Problems with the elevator

  • Dirty common areas

  • Broken windows

Obviously the protections afforded by the warranty of habitability do not apply if you cause the unlivable, unsafe or unclean condition. For example, the landlord is not responsible for curing an insect infestation if it was caused by your own hoarding or failure to routinely clean or dispose of trash.

New York Real Property Law

SECTION 235-B

Warranty of habitability
Real Property (RPP) CHAPTER 50, ARTICLE 7

§ 235-b. Warranty of habitability.

1. In every written or oral lease or rental agreement for residential premises the landlord or lessor shall be deemed to covenant and warrant that the premises so leased or rented and all areas used in connection therewith in common with other tenants or residents are fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety. When any such condition has been caused by the misconduct of the tenant or lessee or persons under his direction or control, it shall not constitute a breach of such covenants and warranties.

2. Any agreement by a lessee or tenant of a dwelling waiving or modifying his rights as set forth in this section shall be void as contrary to public policy.

3. In determining the amount of damages sustained by a tenant as a result of a breach of the warranty set forth in the section, the court;

(a) need not require any expert testimony; and

(b) shall, to the extent the warranty is breached or cannot be cured by reason of a strike or other labor dispute which is not caused primarily by the individual landlord or lessor and such damages are attributable to such strike, exclude recovery to such extent, except to the extent of the net savings, if any, to the landlord or lessor by reason of such strike or labor dispute allocable to the tenant’s premises, provided, however, that the landlord or lesser has made a good faith attempt, where practicable, to cure the breach.

(c) where the premises is subject to regulation pursuant to the local emergency housing rent control law, the emergency tenant protection act of nineteen seventy-four, the rent stabilization law of nineteen hundred sixty-nine or the city rent and rehabilitation law, reduce the amount awarded hereunder by the total amount of any rent reduction ordered by the state division of housing and community renewal pursuant to such laws or act, awarded to the tenant, from the effective date of such rent reduction order, that relates to one or more matters for which relief is awarded hereunder.

Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.

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