Legal Update Regarding Good Cause Eviction

On April 20, 2024, Gov. Hochul signed into law the widely anticipated State budget, which includes sweeping changes to various laws affecting the housing industry, including a new “Good Cause Eviction Law.”  The new and amended laws are set to significantly revamp residential ownership and development in New York City and New York State. This update is our initial overview of Good Cause Eviction Law (“GCE”) codified in Article 6-A of the Real Property Law (“RPL”).  

I. Good Cause Eviction 

Part HH of Chapter 56 of the Laws of 2024 (the “FY 2025 Budget”) introduces GCE, which applies to all housing accommodations in New York City that are not subject to rent regulation, and may be adopted by other municipalities across the State. As a threshold matter, GCE will require that all initial and renewal leases, and notices of non-renewal include a specific “Good Cause Eviction Law Notice,” the contents of which are set forth in RPL § 231-c. This requirement will also apply to all rent demands and Housing Court petitions. This requirement will become effective as of August 18, 2024, one-hundred twenty (120) days from the date that the FY 2025 Budget was signed into law. While we anticipate that the Good Cause Eviction Law Notice will likely be promulgated by the New York State Division of Housing and Community Renewal (“DHCR”) at some point prior to August 18, 2024, Kucker Marino has prepared this notice to provide to our clients, so that leases and non-renewal notices sent prior to the DHCR’s promulgation of the notice, may include this required notice.

The importance of including the Good Cause Eviction Law Notice cannot be overstated, as GCE prohibits the commencement of any action and entry of a judgment of possession where any of the notice requirements of GCE are not strictly complied with. Additionally, properly complying with the procedure for issuing the Good Cause Eviction Law Notice is of paramount importance.

Generally, as it applies to New York City, with certain exceptions for certain buildings and what the law defines as “small landlords,” GCE prohibits the eviction of tenants of apartments that are not subject to rent regulation, absent specific justifications, including nonpayment of rent, provided the rent increase is not unreasonable. GCE creates a “rebuttable presumption that the rent for a dwelling not protected by rent regulation is unreasonable” if it has been increased in any calendar year after April 20, 2024 by an amount that is greater than the “Local Rent Standard,” which is defined as the lesser of 10% or 5% plus the regional consumer price index for all items (“CPI”) for the preceding calendar year, as published by the United States Bureau of Labor Statistics1. In other words, if the CPI rises to 5% or higher, then the most a landlord may increase the rent in any calendar year on a new lease renewal and avoid having such rent increase be presumed “unreasonable,” would be 10%. To be clear, a rent increase that exceeds this amount is not unlawful, but the nonpayment of such an increase may not serve as the sole basis for an eviction, unless the landlord can rebut that presumption. Relevantly, “rent” does not include any charges that are separate from the payment of rent for the apartment, such as services, amenities or facilities for which a separate fee is charged to the tenant, provided that such charges are neither imposed nor increased for the purposes of circumventing GCE.

The following are examples of what is now considered “good cause” grounds for eviction:

  • Failure to pay rent (except where there is an “unreasonable” rent increase). If the rent is, by definition, presumed “unreasonable,” an eviction action may proceed upon the landlord’s rebuttal of such presumption2. Notably, even where the rent increase is not “unreasonable,” and an action to evict is based on the tenant’s failure to agree to “reasonable changes to a lease at renewal, including increases in rent that are not unreasonable ,” the action may only be maintained if the tenant was provided with written notice of the changes to the lease at least thirty (30) days, but no more than ninety (90) days, prior to the expiration of the lease. This inherently creates a potential conflict with existing language of RPL § 226-c, which requires that a notice of any increase equal to or greater than 5% be provided “at least” ninety (90) days prior to the expiration of the lease if the tenant has resided in an apartment for more than two (2) years or has a lease term of at least two (2) years3. Thus, it is imperative to properly make sure that all notices are properly and timely served in accordance with the new law.
  • The tenant’s use of the apartment is: in violation of a substantial obligation under the lease, other than the obligation to surrender possession after the lease has expired; or causing or permitting a nuisance in the building, or interfering with the comfort and safety of other occupants or the landlord; or maliciously or by reason of gross negligence causing substantial damage in the building, or on the property where the building is located; or an illegal purpose.
  • The landlord seeks possession of the apartment for their own personal use as their principal residence, or the principal residence for a member of their immediate family, provided that the tenant is younger sixty-five (65) years of age and not a “disabled person.”
  • The landlord seeks to demolish the “housing accommodation.” Relevantly, the law is unclear whether this applies to the building as a whole, or whether this may also include an intent to demolish an individual apartment only.
  • The landlord seeks to withdraw the “housing accommodation” from the rental market.
  • The tenant refuses to agree to “reasonable changes” to their lease, provided that the requisite written notice of such changes has been given to the tenant not less than thirty (30) and not more than ninety (90) days in advance of the expiration of the tenant’s existing lease.

The following are some of the more relevant exemptions from GCE coverage:

  • Rent stabilized and controlled units.
  • Hotel rooms or any other “transient use” Class “B” dwelling units, as that term is defined in the Multiple Dwelling Law.
  • Units in buildings owned as a condominium or cooperative, or where there has been an “offering plan” submitted to the Office of the Attorney General.
  • Dormitories owned and operated by an educational institution.
  • Units where occupancy is solely an incident of the occupant’s employment.
  • Units within and for use by a religious facility or institution.
  • Any units owned by a “small landlord,” defined as a landlord of no more than ten (10) units (e.g., if a landlord owns two buildings with six units in each building, the landlord is not a “small landlord”). Where the building is owned by an entity, in whole or in part, the names of every natural person with direct or indirect ownership interest in the entity, or any affiliated entity, must be provided in order to qualify as a “small landlord,” and the total number of units that such natural person maintains an interest in is counted to determine whether the “small landlord” exemption applies.
  • Any units in a building ten (10) units or less where the landlord resides in the building.
  • Units that are subject to an “affordable rent” or “income restriction” requirement pursuant to a regulatory agreement, restrictive declaration, statute or regulation. Notably, it is unclear whether units where the tenancy is subject to a “Section 8” agreement are covered by this exemption.
  • Any “housing accommodation” for which a temporary or permanent certificate of occupancy was issued on or after January 1, 2009, with such exemption for a period of thirty (30) years from the date that such certificates. Although this exemption has been widely reported by other industry insiders as applying to “new construction,” there is nothing in the law that specifically limits this exemption to “new construction.”
  • Units where the monthly rent is greater than 245% of the “fair market rent” for the region established by the United States Department of Housing and Urban Development, which shall be published by DHCR annually by August 1.4

These exemptions are not inclusive of all the exemptions that are set forth in the new RPL § 214, and we strongly urge you to contact us to determine whether your property may be exempt from GCE.

Should you wish to discuss how Good Cause Eviction may affect your interests, please contact your trusted KMWB attorney. 

  1. For calendar year 2023, that amount was 2.9%. ↩︎
  2. Evidence that the court is directed to consider includes, but is not limited to costs pertaining to: fuel, insurance, utilities, maintenance (not defined in the statute), taxes or “recent increase thereof’, recent :”significant” repairs to the subject unit (non-cosmetic, requiring a permit, involving a substantial modification to the apartment’s structural, electrical, plumbing, or mechanical systems, and/or abatement of lead-based paint, mold, or asbestos). ↩︎
  3. We suggest that in all matters where this conflict exists that owners choose to comply with the “at least 30 but no more than 90” day notice requirement, to be in the best position to bring an action to enforce the lease offer, given that the only downside to giving long-term tenants less than 90 days’ notice of an increase of more than 5% is that the increase will be effective only a few days later than planned. ↩︎
  4. As published currently by HUD, these amounts are: $5,845.70 for a studio; $6,004.95 for a 1BR; $6,742.40 for a 2BR; $8,413.30 for a 3BR; and $9,065.00 for a 4 BR. ↩︎