Housing Court Proceedings: Changes Under the New Law

The Housing Stability and Tenant Protection Act of 2019 (HSTPA) made significant changes to various statutes governing rent-stabilized housing, including the Emergency Tenant Protection Act, the Rent Stabilization Law of 1969, various provisions of the State Real Property Law, The Real Property Actions and Proceeding Law (RPAPL), and the New York Civil Practice Law and Rules (CPLR).

The Insider’s Summer 2019 Special Issue covered a wide range of rent-related changes enacted by the HSTPA, from vacancies and improvements to preferential rents and deregulation. In this issue, we’ll cover the housing court reforms made by the HSTPA. The new law imposes numerous pro-tenant reforms in the RPAPL. For example, it extends the time for tenants to answer petitions, to cure violations, and to obtain an attorney. It limits the circumstances under which the court can order a tenant to pay rent while a case is pending. And the new law also extends the court’s discretion to stay a tenant’s eviction from six months to one year.

Along with the rent-related changes, it’s important to be aware of how the HSTPA may have changed the way eviction proceedings commenced in Housing Court are conducted. Knowledge of these changes may provide you with a better understanding of the tenant-related strategy your attorney offers, or it may help you make a better informed decision on how to handle a tenant-related issue.

Part M of the HSTPA, designated as the Statewide Housing Security and Tenant Protection Act of 2019, makes a number of changes to the laws governing residential eviction proceedings, applicable to both regulated and unregulated tenants. Here’s a rundown of the changes.

Part M: Rent (RPAPL §702)

The RPAPL is amended to add §702, which defines “rent” in a residential dwelling to mean the monthly or weekly amount charged. Excluded from rent are any and all fees, charges, or penalties the tenant may be responsible for during the course of his tenancy, even if they are specifically authorized by the lease.

This means that rent sought in a summary non-payment proceeding is the amount charged for monthly or weekly occupancy. Any additional charges must be sought in a plenary action or more formal trial, even if provided in the lease. Summary proceedings are generally shorter than plenary proceedings and rarely involve pre-trial discovery.

Part M: Rent—Notice requirements (RPAPL §711)

Owners must give 14 days’ notice before commencing a summary proceeding. RPAPL §711 is amended to add that no tenant or lawful occupant of an apartment can be removed except in a special proceeding. The demand for rent must be made with at least 14 days’ notice for requiring either payment of rent or possession of the apartment, served as prescribed in §735 of the RPAPL.

Under the prior RPAPL §711, where a tenant failed to pay rent under the terms of the lease, an owner was required to give three days’ written notice requiring either payment of rent or possession of the apartment. Also, rent demands must now be made in writing. Oral demands for the outstanding rent are no longer permitted.

Further, in the instance where a tenant dies during the term of the lease and rent hasn’t been paid, RPAPL §711(2) now bars owners from seeking the outstanding rent against a surviving spouse. The owner’s remedy is solely against the estate of the tenant. This section also expands the rights of any occupants living in the apartment after the tenant’s death, as the eviction warrant against the tenant’s estate due to the non-payment of rent won’t permit the owner to also evict the occupants. In such an event, the owner would then have to commence a separate holdover proceeding to evict the occupants and regain possession of the apartment.

Part M: Rent-tender (RPAPL §731)

RPAPL §731 is amended to provide that in a non-payment proceeding, payment to the owner of the full amount of the rent due, at any time before the hearing on the petition, must be accepted by the owner and will dismiss the proceeding. This is a change from before, when an owner had the choice of whether to accept the defaulted rent payment subject to payment of additional costs incurred, such as the legal costs.

Part M: Non-payments (RPAPL §732)

RPAPL §732(1) is amended to require that the notice of petition in a non-payment proceeding be returnable within 10 days after its service. This is a change from before, when the standard was five days.

In addition, stays, or the temporary stopping of eviction warrants, have been significantly adjusted. The issuance of an eviction warrant now can’t be stayed for more than five days, except as provided for by RPAPL §735.

RPAPL §735 is amended by Section 21 of the HSTPA to allow the court to stay the issuance of the warrant, and the cost for the proceeding, for up to one year. Previously, the standard was six months. And the respondent has 10 days to file an answer or be considered in default, subject to the aforementioned RPAPL §735 as amended.

Part M: Holdovers (RPAPL §733)

For holdover cases, where an owner wants to evict for reasons other than non-payment of rent, RPAPL §733 is amended to change the service time of the Notice of Petition and Petition. This notice must be served at least 10 days and not more than 17 days before the time at which the petition is to be heard unless the appropriate Appellate Division has provided other service rules. Previously, the standard was five days and 12 days, respectively.

Part M: Adjournments (RPAPL §745)

RPAPL §745 is amended to require an adjournment of the trial for not less than 14 days at the request of either party. A second or subsequent request for adjournment can be granted at the court’s discretion. Previously, the standard adjournment was a maximum of 10 days.

Part M: Rent Deposit Law (RPAPL §745)

A judge can make a tenant deposit the rent the owner claims is owed under two circumstances: (1) if there have been two adjournments granted solely at the request of the tenant; or (2) upon the 60th day after the parties’ first appearance in court. When calculating the days that have expired, you may count only the days that are attributable to adjournment requests made by the tenant. When calculating days that count towards the 60-day standard, an initial adjournment due to an unrepresented party seeking an attorney doesn’t count towards the 60-day period.

When either two adjournments or 60 days are attributable to the tenant, and only after the owner makes a written motion for a rent deposit or use and occupancy, the court may order a deposit of rent or use and occupancy sums that accrue after the date of the order. Previously, you could obtain an order after oral application and for all rent that had accrued post-petition.

A tenant can challenge the order for a rent deposit or ongoing use and occupancy if she can present any of the following defenses:

• The owner isn’t a proper party to the proceeding;
• The tenant has vacated the apartment as a result of actual eviction, partial eviction, or constructive eviction;
• There are hazardous or immediately hazardous violations of the Housing Maintenance Code in the tenant’s apartment or common area of the building;
• Defense based upon 143b of the Social Services Law;
• Colorable defense of overcharge; and
• Lack of personal jurisdiction.

When calculating the rent or use and occupancy, the court can’t exceed the amount of the regulated rent for the unit or the amount of the tenant’s share for any subsidy program, or the amount of the tenant’s share under an expired subsidy, unless the tenant has entered into an enforceable new agreement to pay the full lease rent.

Also, a person on a fixed income, including but not limited to Social Security income, Supplemental Social Security income, or pension income, can’t pay more than 30 percent of his monthly income. In addition, Department of Social Services or other direct government subsidies aren’t considered income for the purposes of this calculation.

Failing to comply with the court order for deposit of rent or use and occupancy payments results in the court, at its discretion, ordering an immediate trial. Previously, you could strike the answer and obtain a judgment for possession.

The court can extend the deadline for payment upon good cause shown. And the new law explicitly states that at no time shall a failure to pay use and occupancy or rent deposit result in the dismissal of any of the tenant’s defenses or counterclaims, with or without prejudice to their assertion in another forum.

Part M: Warrants (RPAPL §749)

A tenant now has 14 days to vacate after notice of a warrant. RPAPL §749 is amended to require that the warrant of eviction not only describe the property, but also state the earliest date that the court may order execution of the warrant. The warrant is limited to persons named in the proceeding and must give at least 14 days’ notice before the execution of the warrant. This is a change from 72 hours’ notice required before the new law.

The court will command the marshal/sheriff to remove all persons named in the proceeding. And if good cause is shown, the court may issue a stay that prevents the owner from re-renting or renovating the apartment for a reasonable period of time.

The issuing of a warrant no longer cancels the landlord-tenant relationship. And nothing can deprive the court from the power to stay or vacate a warrant for good cause shown, or to restore the tenant to possession of the apartment after execution of the warrant.

If the owner establishes that the tenant, in a non-payment proceeding, withheld rent in bad faith, the court will vacate the warrant if the tenant deposits with the court the full rent due at any time prior to the execution of the warrant.

Part M: Stays (RPAPL §753)

RPAPL §753 is amended to permit, upon the tenant’s request, a stay (or temporary stop) of the issuance or execution of an eviction warrant to collect the costs of the proceeding for a period of not more than one year. This is a change from six months.

The stay is granted if the request is made in good faith—that is, if the tenant can’t secure similar premises within the neighborhood after making due and reasonable efforts to do so, or if it would cause extreme hardship to the tenant or his family if the stay weren’t granted. The factors the court may consider include:

• Serious ill health;
• Significant exacerbation of an ongoing condition;
• A child’s enrollment in a local school; and
• Any other extenuating life circumstances affecting the ability of the tenant or his family to relocate and maintain quality of life.

This section doesn’t apply to a holdover proceeding involving an occupant whose conduct is objectionable, so long as the owner’s evidence proves, to the court’s satisfaction, that the occupant who’s holding over is objectionable.

After trial in a holdover proceeding requiring a notice to cure due to the breach of a lease provision, the court will grant a 30-day stay of the issuance of the warrant to give the tenant time to cure the breach. Previously this stay was limited to 10 days.

Part M: Notice of 5 percent increase or non-renewal of lease (RPL §226-c)

Effective Oct. 12, 2019, RPL §226-c is amended to require written notice of rent increases greater than 5 percent or intention not to renew tenancy by the following schedule:

• If the tenant has occupied the apartment for less than one year and doesn’t have a lease term of at least one year, the owner must provide at least 30 days’ notice;
• If the tenant has occupied the apartment for more than one year, but less than two years, the owner must provide at least 60 days’ notice;
• If the tenant has occupied the apartment for more than two years or has a lease term of at least two years, the owner must provide at least 90 days’ notice.

Part M: Unlawful eviction (RPAPL §768)

This section makes it a criminal offense (Class A misdemeanor) for an owner to use or threaten to use force to interfere, or intend to interfere, with a tenant’s ability to use the apartment. There’s a civil penalty of $1,000 to $10,000 for each violation and $100 per day up to six months after the tenant requests to be restored to occupancy. The owner is required to restore the person unlawfully removed under this section upon request.

Part M: Retaliation (RPL §223-b)

Real Property Law (RPL) §223-b was amended to increase protections for retaliatory evictions. It expressly adds a warranty of habitability claim as a ground for retaliatory eviction and prohibits changes to the terms of tenancy. It creates a presumption of retaliation for efforts to evict within one year of a good faith complaint, adding attorney’s fees to a civil action for retaliatory eviction. Previously, the standard was six months. In addition, a retaliatory eviction claim can now be made against an owner’s agent for offering a new lease with an unreasonable rent increase.

Part M: Duty to mitigate damages (RPL §227-e)

When a tenant breaks her lease and moves out before the end of the lease term, owners have a duty to mitigate damages. In a newly added Section 227-e of the Real Property Law, owners now have a duty to take reasonable and customary actions to mitigate their damage by attempting to rent the apartment at fair-market value or the rent paid during the prior tenancy, whichever is lower. If the owner re-rents the apartment, the previous tenant’s lease is terminated upon the effective date of the new tenant’s lease. This means an owner can no longer simply fail to re-let the apartment and collect damages from the prior tenant through the end of the lease term.

Part M: Right to recover attorney fees (RPL §234)

RPL §234 is amended to prohibit the owner’s recovery of attorney’s fees upon a default judgment.

Part M: Obligation to provide written receipt (RPL §235-e)

If rent hasn’t been received within five days of the date specified in the lease agreement, the owner must now send a written notice by certified mail stating that the rent payment hasn’t been received. We’ve given you a Model Notice: Send Notice of Failure to Pay Rent on Time, below, that you can use to preserve your ability to evict the tenant.

If the owner initiates a non-payment proceeding, the proof of certified mailing must be attached to the Notice of Petition and Petition. The tenant can use an owner’s failure to send the notice by certified mail as a defense in a summary proceeding.

RPL §235-e was also amended to require the owner to provide written rent receipts for payments made by cash or any instrument other than personal check. The owner must maintain records of cash receipts for at least three years.

Rent receipts must be issued immediately if rent is personally transmitted and within 15 days if payment of rent is transmitted indirectly. And RPL §235-e(b) requires owners and their agents to provide a receipt for rent paid by personal check when requested by the tenant. This request remains in effect for the duration of the tenancy and requires the receipt to include: the date, amount, identity of the premises, and signature of the person receiving rent.

Part M: Limitation on fees, late payment charges (RPL §238)

In a newly added Section 238-a of the Real Property Law, owners are barred from charging application fees to review, process, or accept an application to lease residential property unless another statute gives the landlord the right to charge such fees.

Owners can charge only up to $20 for background or credit checks. Under the same section, RPL §238-a, while owners may still charge a tenant for a background check or credit check, the fee may not be more than the actual cost of the review or $20, whichever amount is lower. Additionally, if the owner collects a fee from the tenant to obtain a background check or credit check, the owner must provide a copy to the tenant.

In addition, if the potential tenant provides a copy of a credit or background check conducted within the past 30 days, the fee for a credit or background check must be waived.

This section of the RPL also says that no owner may demand any late fee unless the payment of rent has not been made within five days of the date it was due, and the late fee can’t exceed $50 or 5 percent of the monthly rent, whichever is less. These protections against additional fees may not be waived by the terms of the lease.