How tenants can get rent reductions if there is a “good reason”

Are you one of the tenants who are protected from termination for “good reason”? Your rental agreement – whether new or extended – should provide you with information about this.

Since August 18, landlords have been required to inform their tenants whether or not their apartments are protected by a new state law. This gives tenants the opportunity to take action against exorbitant rent increases. These notices must be attached to new leases, extensions or lawsuits.

After years of failed attempts by progressive lawmakers, a valid reason went into effect in April after it was passed as part of the state budget. But the compromises made then could make it harder to determine which homes are insured and which are not.

The law sets parameters for how much a landlord can raise rent and requires them to offer new leases to their tenants—unless there is a “good reason” for termination, such as nonpayment of rent, if the tenant is a nuisance, or if the landlord wants to take the unit off the market. And many buildings are exempt from the law (more on that later).

This law allows tenants to defend themselves against evictions in housing court by, for example, challenging large rent increases as excessive. According to the law, an increase that is more than 10 percent or the annual rate of inflation plus 5 percent, whichever is lower, is considered excessive. The current threshold in New York City is 8.82 percent.

The impact of the law remains to be seen, and many details will be determined by housing court judges, lawyers say.

“There are a number of ambiguous terms that I know confuse both landlords and tenants,” said Sherwin Belkin, an attorney who represents landlords. “I expect some of this will be played out in court.”

However, some tenants have already been able to invoke the law to defend themselves against high rent increases or to obtain an extension of their rental contract.

One of them is Judy Birnbaum, a 76-year-old Upper West Side resident who suffered a 20% rent increase earlier this year when Slate Property Group bought her building. She couldn’t afford to pay nearly $800 more each month, so she began looking for new apartments that fit her budget. It was a demoralizing endeavor. One day, she met the building’s maintenance manager, who told her good news: her apartment was covered by the new just cause rent law.

“The timing was incredible. How fortunate that this law suddenly passes at the exact time when I have to say, ‘I have to go,'” she said. “Everyone in the building starts talking, and we’re all excited.”

She called the manager, cited good cause, and received a lease extension at an 8.5 percent premium. A Slate spokesperson said the company “updated all outstanding lease extensions to bring them into compliance with the law” after it passed.

“An 8.5 percent increase is significant every year, even if it’s much better than what they originally proposed,” Birnbaum said. “That’s still a lot of money for people, especially seniors.”

“Where am I going to get $3,000?”

The law on valid reasons provides for several exceptions. For example, buildings constructed since 2009, rents in condominiums and cooperative buildings, and rent-controlled or rent-regulated units are exempt.

Another exception applies to landlords who own ten or fewer apartments (or 11 if the landlord lives in his building).

However, it is difficult to say how many units a landlord who is an LLC or corporation can own, and the law is not clear on the technical number of units a person owns if he or she shares ownership of some of those units with other people.

“That’s one of the reasons why this notice is included in every lease,” Belkin said. “The tenant may have to do a little digging, but at least they’re given a trail of information to figure it out.”

The notice must explain why the apartment cannot be vacated if it can be terminated without notice.

The Real Estate Board of New York has created a form that landlords can use.

The question of whether or not a renter is covered by the law is a mystery to Irene Cespedes, who has lived in her Bushwick apartment with her husband for over 20 years. The mother of two children, who works part-time while school is in session, faces an increase of nearly 60%, which would bring her monthly payment to $3,000.

“It’s too much money for me,” she said in Spanish. “I suffer from stress and anxiety and was pretty nervous that night. I spent the whole night thinking about where I was going to get $3,000.”

Public records reviewed by the city are not clear whether the building is exempt from the law or not, but a Make the Road New York attorney working with Cespedes believes she is. The attorney sent a letter to the landlord in July but has not yet received a response.

Other tenants do not currently have insurance coverage, but may soon do so as their building is about to undergo a change of ownership.

In Park Slope, Brooklyn, Shirly Bahar and her co-tenants in a two-family home were granted protection in April for good cause because their landlord owned more than 10 units.

But now the landlord wants to sell the building.

Bahar said her landlord is considering selling to someone who doesn’t own enough units to be covered by the law. She hopes the relationship would be positive if that person buys — but then she faces losing her legally guaranteed protections. A big rent increase, she said, could prompt her to look for another, more affordable apartment — likely outside her neighborhood.

“Our prospects out there in the world would be pretty bleak,” she said.

Risk of failure

Disputes over whether or not tenants are insured are just one issue that could end up in court. Another is whether a rent increase above the threshold is “reasonable.”

Tenants who object to a proposed increase can challenge it in court – but should not assume their case is a no-brainer. Ellen Davidson, a lawyer at the Legal Aid Society, points out that the law allows property owners to argue that their utility costs justify a significant increase.

“The language in the law says that a landlord can rebut the presumption that an increase in rent above the reasonable rental standard is still reasonable by considering the increase in costs and suggesting that the court consider things like taxes,” Davidson said.

Other aspects of the law that the courts will have to decide, Davidson said, include whether tenants are protected by just cause if a landlord’s attorney serves notice of termination before the law came into force.

In addition, the law exempts buildings built since 2009 from the scheme. Protection for these buildings begins 30 years after the building permit is issued. However, it is unclear whether a building built in the 1980s, for example, is exempt from the scheme but the owner recently combined some units and received a new building permit in 2024 will be exempt, Belkin said.

Representative Linda Rosenthal (D-Manhattan) expects landlords who want to circumvent valid reasons will try to consolidate apartments – a process some tenant advocates call “Frankensteining.”

“If you can show good cause, you can combine apartments so that the building now no longer qualifies for good cause,” said Rosenthal, who sponsored a version of the good cause bill. “I’m sure we’ll see that. There will be complaints. The issue of providing and enforcing good cause will be litigated in many cases.”

Still, the prospect of litigation can deter renters – even those who are protected by law. The uncertainty of how a court decision might turn out is one thing for lawyers, says Mark Natanawan, a tenant organizer with Housing Conservation Coordinators, but for renters it can cause real anxiety and fear.

“It’s a very different thing when someone who is actually facing the loss of their home is playing that through in their head and wondering if they want to take the risk” of ending up in court, he said.

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