new lease

Pols Draft Proposal to Fine Brokers, Landlords Who Flout New Rent Laws

An apartment building in the Lower East Side. Lawmakers are looking to give renters more protection after holes found in state bill.
An apartment building in the Lower East Side. Lawmakers are looking to give renters more protection after holes found in state bill. Photo: Ben Fractenberg/THE CITY

A pair of state lawmakers plan to introduce a bill to “impose hefty fines” against landlords and brokers who don’t follow New York’s newly enacted rent laws.

Assemblymember Linda Rosenthal said Thursday she and Assemblymember Harvey Epstein (both D-Manhattan) are drafting a measure to boost compliance with the overhaul. The move came after THE CITY reported a gap in the law that allows the real estate industry to work around provisions on upfront fees charged to renters.

“What I’m going to introduce is a bill that’s basically shot across the bow. We’re going to impose hefty fines if they don’t comply by the new law,” Rosenthal told THE CITY. “These tricks they try to get around the law so they can make more money are not going to fly.”

While the new laws governing rent-regulated and market-rate apartments offer tenants a wide scope of protections, the current statute doesn’t impose fines or penalties if the cap on application fees is exceeded.

The measure passed in June bans landlords from charging prospective renters more than $20 to apply. But as the law is written, the limit doesn’t apply to the brokers who connect people with landlords, the Real Estate Board of New York contends.

Thousands in Penalties Threatened

Rosenthal argues that REBNY’s reading of the new law is a “willful misinterpretation,” while the trade group maintains the law is full of ambiguities.

A REBNY spokesperson said the sweeping rent-reform package, which was introduced on a Tuesday and signed into law three days later, was passed hastily without “any opportunity for public scrutiny.”

“Legislation should be based upon data, reasonableness and proportionality and not emotion,” added the spokesperson, Jamie McShane.

Rosenthal says her and Epstein’s proposal would impose thousands of dollars in fines against landlords and others acting on their behalf for every violation of the new state laws.

“Anybody who act as an agent of the landlord or the representative of the landlord” has to abide by the application fee limit, she said.

But any changes to the law will likely have to wait until 2020, when the next legislative session is slated to reconvene in Albany.

State legislators aren’t the only ones trying to curb the upfront fees apartment hunters have to pay.

Councilmember Keith Powers (D-Manhattan) introduced a bill in February that would cap fees for agents hired by landlords at one month’s rent. Broker or agent fees typically vary, ranging anywhere from 7% to 15% of a unit’s annual rent. One month’s rent would be 8%.

“The legislation doesn’t impact the state law on application fees, but in the same spirit it is aimed at reducing fees at the beginning of a rental process,” Powers said in a statement Thursday.

Powers’ proposal drew the attention of roughly a thousand real estate brokers who flocked to City Hall in late June to protest the measure, arguing that such a limit would harm the industry and put people out of work.

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