Is Your Property Exempt? NYC’s Good Cause Eviction Law Guide

FREE CONSULTATION

Call us now at (718) 514-7900

For decades, owning “market-rate” property in New York City meant you had the final word on who stayed in your building once a lease expired. On April 20, 2024, that paradigm shifted permanently. Currently, the good cause eviction law acts as a universal regulatory framework for tenants, effectively transforming almost every apartment in the five boroughs into a specialized form of rent stabilization.

At Flatrate Eviction Attorney, we consult with property owners daily who are stunned to discover they can no longer exercise a “no-cause” non-renewal. This guide is curated to help you determine your exemption status, ensure strict compliance if you remain covered, and explain why our “Flat Rate” approach is the most effective shield against the rising complexities of Housing Court.

Key Takeaways

• Determine Exemption Eligibility: Verify your building’s status immediately as the primary step for any NYC property owner.
• Establish Legal Justification: Provide a specific, court-admissible reason for any lease termination under the Good Cause Eviction Law.
• Audit Rent Increase Caps: Review annual hikes against the “presumptively unreasonable” standard, currently hovering around 8.4% based on the CPI+5% formula.
• Execute Mandatory Compliance: Attach specific disclosure language to every legal notice to prevent summary dismissal of your case.

Understanding NYC’s Good Cause Eviction Law

The Good Cause Eviction Law (as enacted in 2024) effectively reduces a landlord’s ability to terminate tenancies or simply not renew them for non-regulated, rent-stabilized apartments. The rule has also changed. Scenarios in which an owner can simply decide to end a lease for absolutely no reason at all used to be common. Now, it is the landlord who must provide evidence if they want to end a leasing agreement.

The Fundamental Pillars

• The Entitlement to Renewal: Covered tenants possess a statutory right to a lease renewal unless the owner can demonstrate a “Good Cause” recognized by the court.
• Price-Gouging Protections: The law institutes a “local rent standard.” Any annual increase exceeding the lower of 10% or 5% plus the Consumer Price Index (CPI) is flagged as “presumptively unreasonable.”
• Compulsory Disclosure: Owners must embed a specific notice in every new lease, renewal offer, 14-day demand, and eviction petition, declaring whether the unit falls under the law’s jurisdiction.

What Specifically Constitutes “Good Cause”?

This means that if your unit does not qualify for one of the exemptions, you must provide at least one of the following reasons to keep your property:

A. Fault-Based Grounds (Tenant Malfeasance)

• Non-Payment of Rent: This still accounted for the majority of cases before the courts (although tenants now have “unreasonable” rent increases as a legal defence).
• Nuisance Activity: Engage in a pattern of activity that interferes with the safety or comfort of other residents, including recurring noise or creating unsafe conditions.
• Material Damage: Describe intentional or grossly negligent damage/destruction of units or common areas.
• Evidence of Illegal Activity: Clearly describe what you wish to establish the use of the residence for commercial business or criminal enterprises.
• Refusal to Allow Reasonable Access: Petition for Eviction in case a tenant refuses access for necessary repairs or showings if proper legal notice was served.

B. No-Fault Grounds (Landlord Requirements)

• Owner Occupancy: Take back your unit for personal use or for a family member who qualifies, unless the tenant is disabled or 65 years old.
• Demolish or Withdraw: Demonstrate a legitimate intention to either demolish viable buildings or permanently withdraw the unit from rental use.

Is Your Property Exempt?

The threshold question for any sophisticated owner is whether the property falls into a specific “carve-out” category designed to bypass these restrictions.

1. The “Small Landlord” Exemption

This is currently the most litigated exemption in New York courts.

• The Quantitative Rule: You are exempt if you own 10 units or fewer across New York State.
• The Entity Look-Through: Courts will “pierce” the LLC to identify the natural persons behind the ownership. If any partner’s total portfolio exceeds 10 units, the exemption is voided.
• The Evidentiary Burden: You must provide a notarized disclosure of all property interests to the tenant to successfully claim this status in court.

2. The 30-Year “New Construction” Grace Period

To incentivize development, the state granted a reprieve for recent housing stock.

• The Certification Date: Buildings with a Certificate of Occupancy (CO) issued on or after January 1, 2009, are exempt for 30 years from that date.
• The Current Context: A building completed in 2010 remains exempt until 2040, whereas a 2008 structure is now likely subject to full regulation.

FREE CONSULTATION

Call us now at (718) 514-7900

3. Owner-Occupied Exemption

• The Principle: If you reside in your building and it contains 10 or fewer units, the premises are exempt from the good cause eviction law, regardless of your other real estate holdings.

4. The “Luxury” Rent Threshold

• The Valuation Rule: Units with a monthly rent exceeding 245% of the Fair Market Rent (FMR) are exempt.
• Current Estimations: In the current market, this typically applies to 1-bedrooms exceeding approximately $6,100 and 2-bedrooms exceeding $6,900.

Managing the Rent Increase Cap

The most friction-prone element of the legislation is the cap on rent hikes.

• The Calculation: Increases are limited to 5% plus the local CPI, or 10%, whichever is lower.
• Current Metrics: With inflation stabilized, the maximum “reasonable” increase generally lands between 8.4% and 8.9%.
• Justifying Higher Rates: To exceed these caps, you must prove significant capital improvements or astronomical increases in property taxes and insurance premiums.

The Critical Role of Mandatory Notices

Currently, procedural errors are fatal to your case. Your filings must include the “Good Cause Disclosure Notice” in:

• Every initial lease agreement and renewal offer.
• Every 14-day rent demand and notice of non-renewal.
• Every Petition filed within the New York Housing Court.

How Flatrate Eviction Attorney Protects Your Investment

The NYC Housing Court is currently struggling with a massive backlog, and judges are applying high scrutiny to good cause filings. A single clerical error can result in a dismissal, costing you months and significant lost revenue.

Our Specialized Legal Services

• Conduct Portfolio Audits: Analyze your ownership structure to identify Small Landlord exemption opportunities and gather the necessary deeds for the court.
• Draft Bulletproof Notices: Utilize court-vetted disclosure language to ensure your 90-day non-renewals and rent demands survive judicial review.
• Provide the Flat Fee Advantage: Eliminate the uncertainty of $500/hour billable rates with our predictable pricing model for contested cases.
• Execute Violation Clearances: Resolve HPD and DOB violations to maintain eligibility for maximum base rent increases.
• Lead Aggressive Litigation: Leverage our daily presence in the Queens and Brooklyn courts to navigate tenant-side strategies and move cases to judgment efficiently.

Quick Facts for Landlords

• 10-Unit Rule: Defines the “Small Landlord” exemption threshold.
• 30-Year Rule: Protects properties with a CO issued after Jan 1, 2009.
• 8.4%–8.9%: The current “reasonable” rent increase range.
• Mandatory Notice: Must be attached to all landlord-tenant communications.
• Flat Rate: The strategic choice for cost-effective litigation in NYC.

The Landlord’s Action Plan

1. Verify your CO Date: Confirm if your property falls under the post-2009 exemption.
2. Audit Your Portfolio: Ensure your unit count across all LLCs is accurately documented.
3. Update Your Lease Forms: Incorporate the current Disclosure Notice to avoid petition dismissals.
4. Avoid Prohibited Acts: Refrain from self-help evictions, as penalties are severe.

Do not allow your real estate investment to be compromised by regulatory complexity. Visit us at flatrateevictionny.com or call our office to consult with a NYC specialist regarding the good cause eviction law.

Frequently Asked Questions

Q: Does this law apply to my commercial tenants?

A: No. The legislation is strictly limited to residential dwellings. Commercial assets like retail, office, or industrial space are governed by their specific lease terms and do not require a “Good Cause” for non-renewal.

Q: Can I evict for unauthorized subletting?

A: Yes, provided you offer a 10-day Notice to Cure. Unauthorized subletting is a violation of a substantial obligation of the tenancy, though you must prove the rule was reasonable and consistently enforced.

Q: Does the law protect “Month-to-Month” tenants?

A: Yes. The absence of a written lease does not waive tenant protections. Any occupant in a non-exempt unit for over 30 days is covered by the law and cannot be removed without a cited cause.

Q: Am I liable for illegal Airbnb rentals?

A: Yes, and this constitutes a strong “Good Cause” for eviction. Illegal short-term rentals subject owners to massive municipal fines, allowing you to terminate the lease to mitigate legal and financial risk.

Q: What are the consequences of an incorrect exemption claim?

A: Misrepresenting yourself as a “Small Landlord” can lead to case dismissal, the awarding of tenant legal fees, and potential sanctions for frivolous litigation. Always conduct an ownership audit before certifying your status.

FREE CONSULTATION

Call us now at (718) 514-7900