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

Right to interest on your security deposit

Right to a timely return of your security deposit

Limitations on advance rent payments

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

Right to a roommate

Right to sublet

Protection against unreasonable lease provisions

Protection against high late fees

Right to reasonable accommodations for disabilities

Protection against harassment and retaliation

Right to a livable, safe and sanitary apartment

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.

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.

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.

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.

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.

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.

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

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:

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.

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).

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.

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.

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.

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.