Residential transactions tend to increase as spring approaches. This year expects to be no different. Whether you plan on buying, selling, or leasing residential real estate in the coming season, this client alert will provide a summary of the recent changes to residential real estate laws that may affect your transaction.
Flood Risk Disclosures In Residential Leases
Section 231-B of the New York State Real Property Law mandates that landlords provide comprehensive flood risk disclosures to tenants in residential leases. This includes information on floodplain status, historical flooding events, and the availability of FEMA flood insurance.
This law, effective since June 21, 2023, applies to all residential leases and lease renewals, including leases of co-operative and condominium apartments.
Disclosures In Real Estate Sales
Similarly, Section 462 of the New York State Real Property Law targets the sale of residential real estate. This legislation marks a departure from the previously customary practice of offering a $500 closing credit in lieu of a property condition disclosure statement. Effective March 20, 2024, sellers of single-family homes and 1-4 family townhouses, including New York City townhouses, are now required to supply a detailed disclosure statement regarding the condition of the property, which includes information similar to that required under Section 231-B, floodplain status, insurance coverage, and the property’s flood history. We note that the disclosure statement is not required for condominium units, cooperative units, or unimproved lots. Furthermore, the following transactions are not subject to the disclosure requirements:
- Transfers pursuant to a court order,
- Transfers due to a mortgagee or agent of mortgagor due to a foreclosure,
- Transfers to a beneficiary of a trust,
- Transfers pursuant to foreclosure sale,
- Transfers by a sale under a power of sale that follows a default in the satisfaction of an obligation that is secured by a mortgage,
- Transfers by a mortgagee, beneficiary under a mortgage, or an affiliate or agent thereof, who acquired the property at a sale under a residential foreclosure,
- Transfers by a fiduciary in the course of administration of an estate, guardianship, conservatorship, or trust,
- Transfers from one co-owner to another co-owner or co-owners,
- Transfers to a spouse or lineal descendant,
- Transfers between spouses or former spouses as a result of a dissolution of a marriage,
- Transfers to or from a governmental entity,
- Transfers of a new construction,
- Transfers by a sheriff, or
- Transfers pursuant to a partition action.
A Reminder About The Housing Stability And Tenant Protection Act (HSTPA)
Though passed in 2019, the HSTPA is an ongoing source of confusion and frustration for New York City landlords.
The HSTPA requires that all residential landlords, including those of unregulated units, provide advance notice if they are not renewing a lease or if they are raising the rent by 5% or more. The length of the notice period depends on how long the tenant has occupied the apartment.
- Tenants who have occupied an apartment for less than 1 year are entitled to 30 days’ notice.
- Tenants who have occupied an apartment or have a written lease term for at least one year are entitled to 60 days’ notice.
- Tenants who have occupied an apartment or have a lease term for at least two years are entitled to 90 days’ notice.
Landlords engaged in seasonal summer rentals face additional considerations. Local regulations in areas such as the Hamptons require rental properties to be registered, offering exemptions from certain HSTPA stipulations for “seasonal use dwelling units” under specific conditions. To learn more about these specific requirements, visit our blog here.
These legislative measures emphasize the need for landlords and other real estate stakeholders to stay abreast of legal requirements and market trends. Tools like RezCue can aid in HSTPA compliance.
The foregoing is not intended to be comprehensive nor constitute legal advice. If you would like to discuss your specific circumstances or would like more information, feel free to contact us at (212) 625-8505.