Good Cause Eviction in New York City

Coverage Is the Threshold Question

Before anything else, a building has to determine unit by unit whether the law applies. Getting this wrong in either direction is costly — treating a covered unit as exempt invites a defense that defeats the proceeding, and treating an exempt unit as covered gives away rights the owner has.

• Categories generally outside the law

  Units that are already rent stabilized or rent controlled are governed by those systems rather than by this one. Cooperative and condominium units, certain owner-occupied small buildings, units in buildings that are relatively newly constructed, units already subject to regulatory agreements or government housing programs, manufactured housing, seasonal use and certain institutional housing all sit outside the statute in whole or in part.

• The small owner exemption

  Owners holding no more than a small number of units in total are exempt. The test looks at the owner's holdings across properties rather than at the single building, which means ownership structure matters and related entities have to be examined rather than assumed to be separate.

• The high-rent exemption

  Units renting above a defined threshold are exempt. That threshold is tied to a measure that is adjusted annually and varies by unit size, so it is not a figure to commit to memory — it has to be checked against the current published number each time it is relied on, and a unit can move in or out of coverage as rents and the threshold change.

• New construction

  Recently constructed buildings are exempt for a defined period measured from their certificate of occupancy. As with the rent threshold, the operative dates need to be confirmed for the specific building rather than assumed.

Because several of these thresholds are indexed and updated, any coverage determination should be documented with the figures and sources relied on and the date it was made. That record is what an owner produces later if coverage is disputed.

Grounds for Ending a Covered Tenancy

For a covered unit, a proceeding has to rest on one of the grounds the statute recognizes. In broad terms these include:

• Nonpayment of rent, where the rent being demanded is itself reasonable under the statute
• Violation of a substantial obligation of the tenancy, after notice and an opportunity to cure
• Nuisance, or conduct that substantially interferes with other occupants or damages the property
• Illegal use of the unit
• The tenant's unreasonable refusal of access for repairs or inspection
• The owner's or an immediate family member's good faith intent to occupy the unit as a primary residence
• The owner's good faith intent to demolish the building
• Withdrawal of the unit from the rental market
• The tenant's failure to sign a reasonable lease renewal offered by the owner

The recurring theme across the owner-side grounds is good faith. Intent to occupy, to demolish or to withdraw a unit will be examined, and a claimed intent that is contradicted by what the owner does afterward tends to surface in later litigation.

The Rent Increase Standard

The provision that affects the most units, including ones where no eviction is contemplated.

An increase above a defined threshold — set by reference to a fixed percentage or to a measure of inflation, whichever produces the lower figure — is presumed unreasonable. The presumption is rebuttable: an owner can seek to justify a larger increase by reference to increased costs such as fuel, insurance, taxes and property maintenance, or substantial capital improvements to the building or the unit.

Practically, this arises as a defense. A tenant who did not pay an increased rent raises unreasonableness in the nonpayment proceeding, and the owner then has to justify the increase with actual cost documentation. Owners intending to take increases above the threshold should be building that documentation at the time of the increase, not assembling it after a defense is raised. The applicable percentage changes with the inflation measure, so the current figure has to be confirmed each year.

Notices

The statute requires owners to give tenants notice about the law's applicability to their unit, including where the owner takes the position that the unit is exempt and why.

These notices attach to leases, renewals and certain proceedings, and a missing or defective notice can undermine a proceeding regardless of the merits. For a managing agent, this is a forms problem as much as a legal one: every lease and renewal template in the portfolio needs the correct notice, and exempt buildings need a notice that states the basis for the exemption accurately — an exemption asserted on the wrong ground is worse than none.

What Owners and Agents Should Be Doing

• Determine coverage unit by unit, and document the determination with the figures and the date
• Examine ownership across related entities before relying on the small owner exemption
• Re-check rent-threshold and new-construction exemptions periodically, since units move in and out of coverage
• Update lease and renewal forms across the portfolio to include the required notices
• Document the cost basis for any increase above the threshold at the time it is taken
• Build the record for any good faith ground — owner occupancy, demolition, withdrawal — before commencing anything
• Train the managing office, since these decisions are made at the renewal desk long before they reach counsel

Speak With Our Firm

• Coverage analysis and compliance

  This is a statute where the law is still being applied by the courts and where several of the operative numbers change annually. The useful work for an owner or agent is a documented coverage analysis across the portfolio and a set of forms that match it — done once, rather than litigated unit by unit.

  Call 212-233-1233 or email [email protected]. See also representation of building owners, nonpayment proceedings, holdover proceedings and rent stabilization.