Coopersmith and Coopersmith

Some people may be hitting the gym in anticipation of summer, but landlords also need to get in shape for the summer rental season.

In this alert we will address the current rental market, what owners need to do to prepare for the upcoming rental season, and other issues for seasonal summer rentals.

Rents in New York City have been increasing. The median rent in Manhattan, Brooklyn, and Queens was $3,000.00 in January 2021 and $4,097.00 in January 2023, representing a 36.5% increase. On top of that, inflation has also been increasing. The U.S. Bureau of Labor Statistics reported in January 2023 that the Consumer Price Index for all items over the prior 12 months increased 6.4%.

In order to keep up with inflation and the current market, owners need to know about the Housing Stability and Tenant Protection Act of 2019 (HSTPA).

The HSTPA requires that all residential landlords, including of unregulated units, provide advance notice if they are not renewing a lease or if they are raising the rent by 5% or more. The length of the notice period depends on how long the tenant has occupied the apartment.

  • Tenants who have occupied an apartment for less than 1 year are entitled to 30 days’ notice.
  • Tenants who have occupied an apartment or have a written lease term of at least one year are entitled to 60 days’ notice.
  • Tenants who have occupied an apartment or have a lease term of at least two years are entitled to 90 days’ notice.

The HSTPA also affects landlords’ obligations regarding security deposits. As of 2019, security deposits may not exceed one month’s rent. This includes prepaid rents, such as collecting last month’s rent at lease signing, and additional pet deposits. Landlords must offer an inspection 1-2 weeks before the tenant surrenders possession of the apartment and provide the tenant 48 hours’ notice of the inspection. Then, they must provide an itemized list of any damage or other condition discovered in the inspection that must be cured, and tenant has the right to cure before surrendering the apartment. Finally, the landlord must return the security deposit within 14 days of tenant’s surrender and can only be retained in part or in whole to cover such itemized damage. Failure to timely return the deposit with any itemized list of deductions for uncured damage or conditions forfeits the right to retain any portion of the deposit for cleaning or repairs.

Landlords who rely on seasonal summer rentals may have additional obligations. Several towns in the Hamptons, for example, require all rentals to be registered with the town, but for those rentals that are registered, there may be additional benefits. An amendment to the HSTPA provides an exclusion to the requirement that security deposits not exceed one month’s rent for leases of “a seasonal use dwelling unit”, provided certain conditions are met.

  • Seasonal use dwelling units must be registered as seasonal use dwellings with the appropriate local government or county registry.
  • The dwelling unit cannot be rented for more than 120 days during each calendar year.
  • The lease must expressly provide the local or county government agency with which the property is registered as a seasonal use dwelling, a lease term of 120 days or less, and the primary residence that the tenant will return to after the term ends.

Keeping up with the HSTPA doesn’t have to be difficult. We have developed RezCue to assist with HSTPA compliance. RezCue helps landlords, property owners, and brokers keep track of important deadlines.

The foregoing is not intended to be comprehensive nor constitute legal advice. If you would like to discuss your specific circumstances or would like more information, feel free to contact us at (212) 625-8505.