Bill S3170-2013

Prohibits landlords from charging potential tenants application fees greater than the actual cost of a credit check or other related services paid by the landlord

Allows landlords to charge potential tenants application fees no greater than the actual cost of a credit check or related services paid to a third party by the landlord.

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  • Jan 8, 2014: REFERRED TO JUDICIARY
  • Jan 31, 2013: REFERRED TO JUDICIARY

Memo

BILL NUMBER:S3170

TITLE OF BILL: An act to amend the real property law, in relation to fees landlords may charge tenants

PURPOSE OR GENERAL IDEA OF BILL: This bill would allow landlords to charge potential tenants application fees no greater than the actual cost of a credit check or the related services paid to a third party by the landlord.

SUMMARY OF SPECIFIC PROVISIONS: Subdivision 1 of the bill defines "application fees", "potential tenants", and "landlords" for the purposes of the new section. Subdivision 2 would allow a landlord to charge an application fee equal to the cost of services paid for by the landlord to a third party. Subdivision 3 would enable a potential tenant to file a complaint with the division of housing and community renewal. If the division determines that the landlord has violated this section a fine of one hundred dollars for a first or second violation may be imposed and a third or subsequent violation may be subject to a fine of two hundred fifty dollars.

JUSTIFICATION: This legislation would strike a balance between providing necessary protection for tenants and enabling landlords to recover the actual costs involved in researching and verifying the credit histories of potential tenants. The practice of charging prospective tenants "application fees" is completely unregulated under present law. As a result, consumers in tight rental markets throughout New York State have been forced to pay as much as $150 just to be considered for rental.

This legislation would curb the abuses which regularly take place in the absence of regulation. Consumer credit reports obtained by TRW and other reporting agencies vary in price, but can be obtained easily through a variety of sources for less than $20.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall have become a law.


Text

STATE OF NEW YORK ________________________________________________________________________ 3170 2013-2014 Regular Sessions IN SENATE January 31, 2013 ___________
Introduced by Sen. KRUEGER -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the real property law, in relation to fees landlords may charge tenants THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property law is amended by adding a new section 220-a to read as follows: S 220-A. APPLICATION FEES. 1. WHEREVER USED IN THIS SECTION: A. "APPLICATION FEE" MEANS ANY APPLICATION PROCESSING FEE OR CREDIT CHECK CHARGE OR SIMILAR CHARGE THAT A POTENTIAL TENANT MUST PAY OR IS IN ANY WAY REQUESTED TO PAY TO A LANDLORD IN ORDER TO BE CONSIDERED FOR RENTAL OR LEASE OF ANY REAL PROPERTY OR PORTION THEREOF USED FOR RESI- DENTIAL PURPOSES. B. "POTENTIAL TENANT" MEANS ANY PERSON WITH AN INTENTION TO LEASE OR RENT ANY REAL PROPERTY OR PORTION THEREOF FOR RESIDENTIAL PURPOSES, EXCLUDING POTENTIAL TENANT SHAREHOLDERS OF COOPERATIVE HOUSING CORPO- RATIONS. C. "LANDLORD" MEANS ANY OWNER, MANAGING AGENT OR PRIME LESSOR OF REAL PROPERTY OR ANY REAL ESTATE BROKER, PROVIDED, THAT THIS SECTION SHALL NOT LIMIT THE FEE THAT CAN BE LAWFULLY CHARGED BY SUCH BROKER IF THE POTENTIAL TENANT ENTERS INTO A LEASE OR OCCUPIES REAL PROPERTY FOR RESI- DENTIAL PURPOSES AS A RESULT OF THE BROKER'S SERVICES. 2. A LANDLORD MAY CHARGE A POTENTIAL TENANT AN APPLICATION FEE EQUAL TO THE ACTUAL COST OF A CREDIT CHECK OR OTHER RELATED SERVICES PAID FOR BY A LANDLORD TO A THIRD PARTY. 3. WHERE A LANDLORD CHARGES APPLICATION FEES IN VIOLATION OF THIS SECTION, A POTENTIAL TENANT MAY FILE A COMPLAINT WITH THE DIVISION OF HOUSING AND COMMUNITY RENEWAL. UPON A FINDING BY THE DIVISION THAT A LANDLORD HAS VIOLATED THE PROVISIONS OF THIS SECTION, THE DIVISION SHALL IMPOSE A FINE OF ONE HUNDRED DOLLARS FOR A FIRST OR SECOND VIOLATION AND
A FINE OF TWO HUNDRED FIFTY DOLLARS FOR A THIRD OR ANY SUBSEQUENT VIOLATION. S 2. This act shall take effect on the ninetieth day after it shall have become a law.

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