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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S3170-2013 Actions

• Jan 31, 2013: REFERRED TO JUDICIARY

S3170-2013 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  provid-
ing  necessary  protection for tenants and enabling landlords to recover
the actual costs involved in researching and verifying the credit histo-
ries 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.

S3170-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    3170

                         2013-2014 Regular Sessions

                              I N  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

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD01790-01-3

 S. 3170                             2

  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.