Relates to prohibiting legal fees to be charged by a lessor or agent thereof

Summary of specific provisions

Section 1 amends the administrative code of the city of New York by adding section 26-416 that would prohibit a lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the lessor has the legal authority to do so pursuant to a court order. Any agreement or assessment to the contrary shall be void as contrary to public policy.

Section 2 amends sections 6 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four by adding a new subdivision f-1 that would prohibit a lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the lessor has the legal authority to do so pursuant to a court order. Any agreement or assessment to the contrary shall be void as contrary to public policy.

Section 3 amends section 26-512 of the administrative code of the city of New York by adding a new subdivision g that would prohibit a lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the lessor has the legal authority to do so pursuant to a court order. Any agreement or assessment to the contrary shall be void as contrary to public policy.

Section 4 amends subdivision 4 of section 4 of chapter 274 of the laws of 1946, constituting the emergency housing rent control law that would prohibit a lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the lessor has the legal authority to do so pursuant to a court order Any agreement or assessment to the contrary shall be void as contrary to public policy.

Section 5 amends the real property law by adding a new section 234-a that would prohibit a lessor or agent thereof from charging or including any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the lessor has the legal authority to do so pursuant to a court order. Any agreement or assessment to the contrary shall be void as contrary to public policy.

Section 6 sets the effective date.

Justification

Nearly half of all New Yorkers live below or close to the poverty line. Accordingly, it is critical that New York City has protections in place to safeguard its residents' basic necessities, one of the most important of which is housing. With an average rent of over 51,000 in the City, programs that reduce the rent burden are essential. One important example is New York City's system of rent control and rent stabilization, which provides a variety of tenant protections to over 2 million people.

Despite the high need for these tenant protections, many landlords are increasing the cost of housing, by imposing non-rent fees on rent stabilized tenants. One major example, and the focus of this bill, is a fee or surcharge for legal services. Landlords do not have legal authority to impose a legal fee unless: a) The tenant's lease has a clause that allows the landlord to seek such fees; b) The tenant is sued by the landlord in a court and; c) Either a judge has ordered a tenant to pay the legal fees or the tenant has agreed to pay the fee in a court approved agreement.

Most of the time, landlords add these surcharges without meeting any of the above conditions. A recent survey of tent stabilized tenants indicates that 56% were charged a legal fee in the last year and on average, the fee exceeded 1,000 dollars: Many tenants feel forced to pay these fees because they fear eviction. This bill is necessary to protect low-income tenants in New York City and ensure that they are not being charged more than they legally owe for rent. This extra cost raises rents and makes rent controlled and rent stabilized apartments unaffordable for many New Yorkers.

Prior legislative history

2013-14: A.8262-A- Referred to Rules/S.6113-B- Referred to Judiciary

Fiscal implications

None to the State.

Effective date

This act shall take effect immediately.

{1} The Burden of Fees: How Affordable Housing is Made Unaffordable " Community Action for Safe Apartments and the Community Development Project, September 2013 http://www cdp-ny mg/report/The Burden of Fees FINAL pdf