Governor Kathy Hochul has signed a contentious bill that broadens the definition of fraud in rent overcharge cases, dealing a significant blow to landlords. The legislation focuses on limiting rent on “Frankenstein” apartments, where vacant, rent-regulated units are combined.
Impact on Rent-Stabilized Market
Critics argue that the bill could lead to an influx of rent overcharge cases, putting property owners at risk, especially if they can’t produce records about building renovations. Real estate attorney Zachary Rothken expressed concerns, stating that the bill’s language leaves room for any mistake to be interpreted as fraud, potentially impacting the rent-stabilized market.
Despite landlord opposition, tenant advocates assert that the bill corrects long-exploited loopholes, providing clarity to existing housing laws.
The new legislation’s impact on the rent-stabilized market raises concerns, with critics predicting potential negative consequences for property owners. Community Housing Improvement Program’s Jay Martin goes as far as calling the law a “disaster” that could jeopardize rent-stabilized housing.
Clarifications and Amendments
The bill, sponsored by Sen. Brian Kavanagh and Assembly member Linda Rosenthal, seeks to bring clarity to the 2019 Housing Stability Tenant Protection Act. However, Governor Hochul introduced chapter amendments, emphasizing the need to avoid unintended consequences and address technical legal concerns.
In a related move, Governor Hochul vetoed another rent stabilization-related bill. This measure aimed to allow tenants to consult rent histories beyond the usual four-year lookback, challenging a 2020 state Court of Appeals decision. Landlords argued that the bill contradicted the court’s ruling, while Senator Kavanagh emphasized the bills’ intention to clarify existing law.
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