Prohibits landlords from charging potential tenants application fees greater than the actual cost of a credit check or other related services paid by the landlord

BILL NUMBER:S5437

Title of bill

An act to amend the real property law, in relation to fees landlords may charge tenants

Purpose or general idea of bill

This bill would allow landlords to charge potential tenants application fees no greater than the actual cost of a credit check or the related services paid to a third party by the landlord, and in no event shall such fee exceed $30.

Summary of specific provisions

Subdivision 1 of the bill defines "application fees", "potential tenants", and "landlords" for the purposes of the new section. Subdivision 2 would allow a landlord to charge an application fee equal to the cost of services paid for by the landlord to a third party, provided that the total of such fee or fees does not exceed $30.

Justification

This legislation would strike a balance between providing necessary protection for tenants and enabling landlords to recover the actual costs involved in researching and verifying the credit histories of potential tenants. The practice of charging prospective tenants "application fees" is completely unregulated under present law. As a result, consumers in tight rental markets throughout New York State have been forced to pay as much as $150 just to be considered for rental.

To curb the abuses which regularly take place in the absence of regulation, this bill would cap the application fee at $30. Consumer credit reports obtained by TRW and other reporting agencies vary in price, but can be obtained easily through a variety of sources for less than $20.

Prior legislative history

2013: A.3407 - Referred to Housing 2011: A.2198 - Referred to Real Property Taxation

Fiscal implications for state and local governments

None.

Effective date

This act shall take effect on the 90th day after it shall have become a law.