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On June 30, 2022, the Supreme Court in Albany County found the “Good Cause” Eviction Statute to be null and void. The Supreme Court in Pusatere v. City of Albany found that Albany’s Good Cause Eviction law (Local Law F of 2021 [see https://bit.ly/3Rt4yOa]) was in direct conflict with and preempted by New York State law. The court’s decision is a major victory for landlords and property owners. The plaintiffs argued that Albany’s Good Cause Eviction law “attempts to regulate rental rates and tenant evictions at the local level, which is preempted by State law.” Even the name of the legislation, “Prohibition of Eviction Without Good Cause Law,” clearly evidences the existence of a conflict as there is no requirement under New York State law to establish “good cause” in order to evict a tenant.
The Preemption Doctrine
The Preemption Doctrine restricts local governments from enacting legislation that is inconsistent with the state’s Constitution or with any laws of the state. The court in Pusatere explains that there are two types of preemptions that apply to local laws “[1] conflict preemption, which prohibits a local government from adopting a law that is ‘inconsistent with’ state law, and [2] field preemption, which prohibits a local government from legislating in a field or area of the law where the ‘Legislature has assumed full regulatory responsibility.’” The court further explained that “…conflict preemption occurs when a local law prohibits what a state law explicitly allows.” If there exists no inconsistency or conflict, then the legislation would be valid, and the preemption doctrine would not apply. However, the court in Pusatere found that Local Law F of 2021 was in direct conflict with New York State’s Real Property Law (“RPL”) and Real Property Actions and Proceedings Law (“RPAPL”).
The Conflict with Albany’s Local Law F of 2021
Section 30-327 Local Law F of 2021 provided that “No landlord shall, by action to evict or to recover possession, by exclusion from possession, by failure to renew any lease or otherwise, remove any tenant from housing accommodation except for good cause as defined in Section 328 of this article.” Section 30-328 further provides:
“A. No landlord shall remove a tenant from any housing accommodation, or attempt such removal or exclusion from possession, notwithstanding that the tenant has no written lease or that the lease or other rental agreement has expired or otherwise terminated, except upon order of a court of competent jurisdiction entered in an appropriate judicial action or proceeding in which the petitioner or plaintiff has established one of the following grounds as good cause for removal or eviction:
(1) The tenant has failed to pay rent due and owing, provided, however, that the rent due and owing, or any part thereof, did not result from a rent increase or pattern of rent increases which, regardless of the tenant’s prior consent, if any, is unconscionable or imposed for the purpose of circumventing the intent of this article. In determining whether all or part of the rent due and owing is the result of an unconscionable rent increase or pattern of rent increases, the Court may consider, among other factors, i) the rate of the increase relative to the tenant’s ability to afford said increase, ii) improvements made to the subject unit or common areas serving said unit, iii) whether the increase was precipitated by the tenant engaging in the activity described at section 223-b (1(a)-(c) of the Real Property Actions and Proceedings Law, iv) significant market changes relevant to the subject unit, and v) the condition of the unit or common areas serving the unit, and it shall be a rebuttable presumption that the rent for a dwelling not protected by rent regulation is unconscionable or imposed for the purpose of circumventing the intent of this article if said rent has been increased in any calendar year by a percentage exceeding five percent….”
The “Prohibition of Eviction Without Good Cause Law,” as the name of the legislation clearly intends, requires that a landlord must establish “good cause” as detailed in Section 30-328(A)(1) above in order to be able to evict a tenant, which is not a requirement of current New York law.
The Rationale of the Court
The judge in Pusatere pointed out that “[n]otably, there is nothing in the RPAPL that requires a landlord to show ‘good cause’ after a lease expires in order to be successful in a special proceeding to evict a tenant.” The judge further states that “To the contrary, RPAPL expressly permits eviction upon the mere showing that the terms of a tenant’s lease have expired.” The court points out that Local Law F not only added “good cause” requirements that did not exist under New York State law, it also restricted a landlord’s right to evict a tenant even where a lease had expired or there was no written lease. The judge pointed out that this was in direct conflict with the RPAPL.
The judge further explained that Local Law F was in direct conflict with Section 228 of the RPL. Under Section 228, a landlord is permitted to end a month-to-month tenancy on 30 days’ notice to the tenant. Again, the court points out that there is no requirement under Section 228 to “demonstrate good cause” in order for a landlord to terminate a tenancy. Additionally, under Section 226-c, a landlord may raise rents by 5% or more provided the tenant is given “adequate written notice” at the time of renewal for those tenants that have written leases, and upon “sufficient notice” for those tenants under month-to-month tenancies. Once again, the judge points out that under the current law “The landlord’s right to increase rent is not conditioned upon a showing of good cause.” Local Law F clearly conflicts with the RPL in that it “…allows a court to interfere with a landlord’s right to increase rent by determining ‘whether all or part of the rent due and owing is the result of unconscionable rent, increase or pattern of rent increases relative to the tenant’s ability to afford said increase.’” Local Law F adds additional requirements that clearly violate the doctrine of preemption.
The court ultimately held that since Sections 30-327 and 30-328 of Local Law F “altered substantive provisions and procedures of existing state law by imposing limitations and prerequisites to the commencement of an eviction proceeding that are not required under state law,” they were deemed null and void. The court further held that since the remaining provisions of Local Law F were enacted solely to support Sections 30-327 and 30-328, the entire law was held to be invalid.
Other Municipalities and the Fate of Good Cause Legislation
Other municipalities such as Poughkeepsie, Newburgh, Beacon and Hudson have passed similar “good cause” eviction laws and their fate remains unknown at this time. Although, it is likely that each of these statutes may suffer a similar demise as the primary element of each of these laws is that “good cause” be established by landlords in order to be able to evict a tenant. According to The Real Deal (see https://bit.ly/3NZbnEk), before the Pusatere decision, tenant advocate groups were attempting to use a local, “incremental” approach to passing “good cause” legislation. However, with the decision in Pusatere, it is now likely that the “local” tactic will be abandoned and the push for the enactment of a statewide “good cause” eviction law will again be the focus of tenant advocate groups and progressive lawmakers. In 2021, the passage of a statewide “good cause eviction” in the legislature was not successful. Landlord and property owner advocates should now be prepared to counter those efforts on the state level.
The real estate industry has expressed concerns regarding the potential repercussions of the FARE Act.
Despite representing different parties, Latimer and Lawler share a bipartisan focus on housing policy solutions. Both have expressed support for raising the cap on the State and Local Tax (SALT) deduction.
Unfortunately, many small businesses, including most real estate brokerage firms, and real estate investment and holding companies, will not meet these criteria and will therefore be required to comply fully with the CTA’s filing requirements.
It is important for brokers and agents to note that where a similar form has been made available by both HGAR and NYSAR, those forms do contain varying provisions. Every broker must carefully review each form, and ultimately determine which they would like to utilize.
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