Nadel & Ciarlo, P.C.

Rent stabilization law draws New York landlords into lawsuit

Rent stabilization is always a hot-button topic for landlords and tenants alike in New York. However, the new changes to the rent rule put in effect by Gov. Andrew Cuomo have ignited a new firestorm.

Recently, Cuomo signed a package of bills that virtually overhauled the existing rent laws. The new legislation affects the income and assets of the landlords for about 1.3 million apartments that are either rent-controlled or rent-stabilized.

Landlords will no longer be able to increase rents by 20% when a regulated apartment changes occupants. In addition, landlords will only be able to increase rents by 2% when they make building-wide renovations or improvements, down from the previously allowed 6%.

While these changes have been pushed forward on the basis that they're "tenant-friendly" and helpful to the housing crisis, landlords believe that they're actually the opposite. They say that the new regulations will make it difficult -- if not impossible -- for them to keep up with necessary repairs on the buildings they own. They simply won't be able to afford it. They say the rules will actually increase the cost of market-rate apartments since tenants won't want to move from their permanently stabilized buildings.

Two major associations of landlords, the Community Housing Improvement Program (CHIP) and the Rent Stabilization Association (RSA), expect to file a challenge to the new laws in federal court by the middle of July. They say that the new laws amount to a violation of the Fifth Amendment's "taking" clause, essentially depriving landlords of the fair use of their property.

While this recent development is taking the disagreements about rent stabilization into a larger arena, there are many smaller disputes that have to be settled every day. If you are struggling with a rent stabilization issue, find out more about your legal options.

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