Owners, tenants lament flaws in rent regulation overhaul

By Sabina Mollot

Five months into the cityʼs new rent regulations, the industry continues to digest the sweeping changes to how landlords can and can’t raise rents.

At a seminar hosted by the New York Bar Association last week, panelists argued over the pros and cons of the legislation, with freshman New York State Senator Zellnor Myrie, who pushed hard for the reforms in Albany in June, saying, “I will never apologize for standing up for tenants.

“There were way too many incentives for bad behavior and we have increased protections against bad behavior.”

Myrie was joined on a panel that included RuthAnne Visnauskas, commissioner and CEO of the state housing agency, Homes and Community Renewal and Luise Barrack, a managing member of Rosenberg & Estis, a real estate industry law firm. Daniel M. Bernstein, member with Rosenberg & Estis, P.C. and co-chair of the NYC Bar Association Committee on Housing & Urban Development, led the morning seminar.

Barrack warned about unintended consequences of the reforms, such as making landlords less inclined to take tenants with spotty or no credit histories, pet owners or people who are unemployed.

The problem, she said, stems from the fact that owners are no longer allowed to charge more than one month in rent as a security deposit.

“If someone has potential credit issues, the landlord no longer has that cushion (of advance rent),” she said. She also said this could impact would-be renters from overseas, including students, who commonly have paid or have had their parents pay their rent for a semester or even a year in advance.

“It was a system enjoyed by both sides,” said Barrack. “You can no longer do that and owners with properties near NYU or Columbia or other schools in New York City may no longer rent to overseas tenants, especially students, since the problem is their parents are also overseas. Common sense tells us no one is going to put their properties at risk to the extent that they don’t have to. You will likely not see that money and you will be chasing them and never recovering the money. There are no consequences for things done wrong by tenants.”

But attorneys representing tenants worries the new laws aren’t far-reaching enough.

David Hershey-Webb, a tenant attorney and partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph, brought up another change in the law, the elimination of tenant blacklists.