Earlier this year, ProPublica reported that close to 200,000 New York City apartments that should have been registered as rent stabilized, were not registered, noting that state and city officials have neglected to police these landlords who receive over a billion dollars in property tax breaks in return for stabilizing rents.
Prompted by ProPublica’s findings, a new bill was introduced that would ultimately increase the penalties faced by landlords for overcharging tenants. If passed, first-time violators could expect to pay five times the amount overcharged and repeat offenders could pay up to 10 times the amount, plus interest. Currently, the law provides for penalties up to three times the amount overcharged with no differentiation between first-time or repeat offenders.
In general, rent-stabilized units give tenants the right to caps on yearly rent increases and they also provide eviction protection. However, years of poor enforcement practices, a lack of strong penalties and overall confusion has led to a failure to register by many NYC building owners, as the law requires.
According to ProPublica, the lack of enforcement has contributed to the substantial gap in the number of units that should be rent stabilized and those that might not be. Estimates show that 50,000 apartments that were enjoying tax breaks under two programs were not included in rent stabilization.
For over 20 years, New York City has estimated that there are approximately one million rent-stabilized units in the city. However, data obtained from the state shows that since 1994, the number of actual registered apartments is between 804,000 and 870,000.
Senator Brad Hoylman (who introduced the bill along with Assemblywoman Linda Rosenthal) noted that his hope is that the increased penalties would “force more landlords to comply with the rent-stabilization laws. Just the mere fact of heavier fines, I think, will give landlords pause.”
In addition to this bill, Assemblywoman Rosenthal introduced a related bill that would charge a $2,000 fine per apartment for failing to register. A number of city council members have also introduced legislation to impose a similar fine.
Although the Rent Stabilization Association, which represents property owners in New York City, decided not to comment on the bill, others have shown their support. ProPublica notes that the executive director of Tenants & Neighbors (a tenants’ rights group in New York) stated that she supported the increased penalty for overcharging tenants because “unscrupulous landlords are currently operating in an environment where they intentionally break the laws, and there are no consequences.”
Unfortunately, state and city regulators have a history of failing to enforce existing rent-stabilization laws – which may leave tenants with the responsibility to take on the battle themselves.
If you are a landlord and you have questions regarding New York landlord-tenant law and/or rent stabilization, please contact Griffin Alexander to speak with a knowledgeable attorney right away.
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