Legal Tips For First-Time Landlords: A Guide To Manage Your NYC Rental

Being a landlord is one of the most lucrative ways to earn a living in New York City. As of this year, those who own rental properties in the Big Apple can earn about $3,863 per month on an apartment, while those working as landlords can make almost $90,000 a year. There has always been a high demand for housing in NYC, so it's no wonder why many individuals aspire to be landlords. But managing a rental property presents a host of challenges, and if you're not up to date on relevant laws and regulations, you can end up dealing with legal problems that could hinder your future earnings. 

It's important to know your legal obligations so you can protect your interests, as well as your renters’ legal rights. If you're a first-time landlord, here are some legal tips to keep in mind to manage your NYC rental.

Create Detailed Lease Agreements

Every landlord should have a detailed written lease agreement since it's too risky to have just a verbal agreement with a tenant, even if that person is someone that you trust. To avoid any misunderstanding, the lease agreement should be written in a clear and concise way, and because it serves as a contract, it should contain what you and your tenant promise to deliver while they're staying in the unit. You can download a sample of a typical lease agreement online, then just fill out the description of the agreement. Write your name and the tenant's name, tenancy term, property description, monthly rent, and security deposit. 

Don't forget to list down the names of all the people that will be living in the apartment so that it's expressly stated that only those who are mentioned in the contract will be inhabiting the property. You can also include subleases if you don't want the tenant to bring in a person that you don't know. Don't forget to include a pet clause, a list of what's included in the apartment, tenant's duties, your duties, and the grounds for eviction. 

Know the Latest Laws on Rent Increases and Evictions

The rules on rent increases, evictions, and lease renewals in NYC are always evolving, so you need to be updated on these to stay compliant as a landlord. For instance, the newly enforced ‘Good Cause’ law, which covers NYC and four other boroughs, will limit how landlords can raise the rent in eligible apartments. Renters can challenge rent increases above 5 or 10 percent, and it also requires landlords to offer a new lease agreement to tenants who pay their rent on time and who follow the terms from their previous agreement. 

The policy also states that landlords should have a good cause or reason if they refuse to renew a renter's lease. Some of these reasons include illegal behavior, nonpayment of rent, or if the property owner wants to demolish the building or if they plan to use the building for commercial purposes. This policy will expire in 2034, but some apartment buildings are exempt, such as newly constructed buildings from 2009. Check first to see if the law applies to your property before drafting new agreements. 

Be Familiar with Proper Eviction Processes

NYC has proper eviction procedures that should be followed to the letter, and doing so protects your business, as well as the rights of your tenant. Before evicting a tenant from your building, know that the very first thing that you need to do is to secure a court order to start the eviction process. Present an official notice to your tenant, and if they haven't paid the rent, give them a 14-day notice to pay. If they're unable to do so, then they have to move out of the apartment immediately. However, if they refuse to pay or move out, then you can start eviction proceedings through the court system.

Keep in mind that you can't forcefully remove a tenant from the apartment unless you win the eviction lawsuit. Only a sheriff can lawfully remove the tenant from the property, so resist the impulse to do this, even if you're being goaded to do so since this will only result in legal consequences for you. 

Keep Records of Everything

Keeping a logbook or a record of everything that is relevant to the property and your duties as a landlord is a must since there may come a time when they'll be highly useful. Make it a point to keep a record of repairs, emails, text messages, inspections, and transactions related to the rental apartment. These records can be used for compliance, tax deductions, to resolve disputes and even legal defense. Keep physical copies of these records in a fireproof safe, and make digital copies as a backup.  

Knowing the ins and outs of rental laws and regulations can help to protect your business, as well as the rights of your tenants. Keep these legal tips in mind, and stay up to date on NYC rental policies to avoid hassles as a first-time landlord.