The NYC small-landlord law survival kit (2026)

If you own a two-family in Bay Ridge, a small walk-up in Astoria, or a single rental condo in the Bronx, you are running a real business under some of the strictest rental laws in the country — usually without a lawyer on retainer. The rules changed fast between 2019 and 2026, and most of the old habits (charging a big application fee, keeping "first, last, and security," or filling a vacancy in a week) are now either capped or flat-out illegal. This survival kit walks a small NYC landlord through the laws that actually get owners fined, with the specific dollar limits, deadlines, and official sources so you can stay compliant and still run a profitable, honest rental.

None of this is meant to scare you off. Good tenants and good owners want the same thing: a clean lease, on-time rent, and no surprises. CertRent gives owners a free way to create NY-compliant leases and e-sign them, and lets applicants show up with a verified profile so you are not chasing paperwork. Let's go area by area.

The compliance checklist at a glance

Keep this table next to your lease file. Every row is a place where a small owner most commonly gets tripped up in 2026.

Screening fees: the $20 cap and the free-report waiver (RPL 238-a)

Under New York Real Property Law section 238-a, you cannot charge an applicant more than $20 total, and that $20 has to cover the background check and the credit check combined. The old $50–$100 "application" or "processing" fee is gone. On top of that, the law says you must waive the fee entirely if the applicant gives you a copy of a background check or credit report completed within the last 30 days. You also have to hand the applicant a copy of any report you run and an itemized receipt.

For a small owner, the practical move is to stop trying to profit on screening and instead accept a recent report the tenant already carries. That is exactly what a CertRent verified renter profile provides — identity, bank-confirmed rent history, and income already checked — so you skip the fee, skip the wait, and still get real underwriting data. It is faster for you and cheaper for them.

The FARE Act: if you list it, you pay the broker

The Fairness in Apartment Rental Expenses (FARE) Act took effect in June 2025. The core rule: the party who hires the broker pays the broker. If you engage an agent to list and show your unit, that commission is now your cost, not the tenant's. You also must disclose, in writing and in the listing itself, any fee a tenant could owe before they apply.

Many small owners respond by simply renting the unit themselves — no broker, no fee, no exposure. If you self-list, use clean forms: our free NY lease templates and lease template guide are built for owners who handle their own rentals. If you do hire a broker, budget the commission as an operating expense and never try to pass it to the tenant — DCWP enforces this and issues penalties.

The tenant-blacklist ban (RPL 227-f)

It is illegal to refuse to rent to someone — or to retaliate against a current tenant — because they were once a party to a housing court proceeding. Tenant-screening reports that flag "housing court history" cannot be the basis for a rejection, and the law presumes retaliation if an adverse action follows shortly after a tenant asserts their rights. So if a screening service surfaces a prior case, set it aside and judge the applicant on income, references, and rent history instead. This is a common and easily avoided violation for owners who rely blindly on a vendor's red flags.

Fair Chance for Housing: criminal-screening limits

New York City's Fair Chance for Housing Act sharply limits when and how you can look at an applicant's criminal record. In almost all cases you may not ask about or run a criminal background check until after you make a conditional offer. Certain records — sealed cases, most non-convictions, older matters, youthful-offender adjudications — cannot be considered at all.

If you pull a record after the conditional offer and want to withdraw it, you must follow a defined process: identify the specific conviction, do an individualized assessment of how it directly relates to the safety of the property or other residents, and give the applicant a chance to respond with context such as time passed or rehabilitation. A blanket "no records" or "no felonies" policy is illegal. The NYC Commission on Human Rights enforces this and accepts complaints, so document your reasoning if you ever decline on this basis.

Source-of-income discrimination

You cannot refuse an applicant, quote a higher rent, or slow-walk the process because of their lawful source of income — that includes CityFHEPS, Section 8, Social Security, disability, unemployment, and child support. "No vouchers" or "no programs" language in an ad is itself a violation. Voucher tenants come with a guaranteed government-backed portion of rent, which is often a plus for a small owner's cash flow. Treat a voucher applicant exactly as you would any other and evaluate them on the same criteria.

Security deposits: one month, itemized, 14 days

Statewide law caps the security deposit at one month's rent. You cannot collect "first, last, and security," and you cannot ask for two months down as a deposit. Hold the deposit in a separate account and, in a building with six or more units, in an interest-bearing account.

When the tenant moves out, you have 14 days to return the deposit with an itemized statement of any deductions. Miss that deadline and you generally forfeit the right to keep any of it — a harsh but simple rule. You must also offer a pre-move-out walk-through inspection so the tenant can cure small issues. Deduct only for actual damage beyond ordinary wear and tear, unpaid rent, or charges the lease specifically allows. Photograph the unit at move-in and move-out; that record is your best defense.

Late fees: $50 or 5%, whichever is less

The maximum late fee is the lesser of $50 or 5% of the monthly rent, and it cannot be charged until the rent is at least five days late. If the rent is $2,500, five percent is $125 — but the $50 cap wins, so $50 is the most you can charge. You cannot stack a weekly late fee or write a bigger number into the lease and expect it to hold. Put the exact figure in the lease and apply it consistently.

Required lease riders and disclosures

A compliant NYC residential lease is more than the rent and term. Depending on the unit, you generally need to attach or include:

• Lead-based paint disclosure (federal) for any building constructed before 1978, plus the EPA pamphlet.
• Bedbug disclosure — the annual filing history for the building (NYC HPD requirement).
• Sprinkler disclosure stating whether the unit has a maintained sprinkler system.
• Window guard rider — required, and mandatory if a child 10 or under lives in the unit.
• Stove knob-cover notice and the gas leak / heating season notices required by local law.
• Good Cause Eviction notice — where the law applies, leases and certain notices must state whether the unit is covered and the basis for exemption.

Rather than assemble these by hand, start from a form set that already bundles the riders. Our lease template resources keep the required NYC and NY State disclosures attached so you are not guessing which rider goes where.

Good Cause Eviction — and the exemptions that matter to small owners

New York's Good Cause Eviction law, effective in New York City, gives many market-rate tenants a right to lease renewal unless you have a legally recognized "good cause," and it lets tenants challenge rent increases above a set threshold. The presumptively unreasonable increase is tied to the local Consumer Price Index plus 5%, capped at 10% — whichever is lower — for covered units.

Here is the honest part small owners need to hear clearly: Good Cause has real exemptions, and several were written for you. The key carve-outs include:

• The small-owner exemption: owners who own 10 or fewer units total are generally exempt. This covers most mom-and-pop landlords.
• Owner-occupied buildings with a small number of units (the classic two- to four-family where you live in one unit).
• New construction: units in buildings that got a certificate of occupancy after 2009 are exempt for a period after construction.
• High-rent luxury units above 245% of the fair market rent for the area.
• Rent-stabilized units, which are already covered by their own (usually stronger) rules and are not double-covered.

Even when you are exempt from Good Cause, you still must follow the proper notice periods for non-renewal or a rent increase over 5% — 30, 60, or 90 days depending on how long the tenant has lived there — and you must use the courts for any eviction. Self-help lockouts and shutting off utilities are illegal and expensive. For the mechanics of doing it right, see our NYC eviction process guide for landlords.

Rent reporting: the honest 2026 picture

Offering to report a tenant's on-time rent to the credit bureaus is a genuine perk, but be precise about what it does. Rent reporting mainly helps tenants who are credit-invisible and can factor into newer models like VantageScore and FICO 9+. It is not counted by the older FICO 8 and classic mortgage scores most lenders still use, so never promise a tenant a "credit score boost." Overstating it can create liability.

On the legal front, the rules differ by state. California's AB 2747 is enacted and requires many landlords to offer rent reporting and to let tenants opt out. In New York, the comparable bill A2729 is still proposed, not law, as of mid-2026 — so reporting here is voluntary today, but a disclosure-and-opt-out framework is the likely direction. If you offer it, get written tenant consent, disclose any fee, allow opt-out at any time, and report accurately (including missed payments only if your program discloses that). Our NY rent-reporting law guide tracks A2729's status so you can stay ahead of it.

Your five-step compliance routine

1. Use compliant forms. Start from a current NY lease with the required riders attached — don't reuse a 2018 template.
2. Screen legally and in order. Cap the fee at $20 (or waive it), delay any criminal check until after a conditional offer, and ignore housing-court flags.
3. Document the unit. Photos at move-in and move-out protect your deposit deductions and satisfy the 14-day itemized-return rule.
4. Give proper notice. 30/60/90-day notice for non-renewals and increases over 5%, in writing, every time.
5. Never self-help. No lockouts, no utility shutoffs — use housing court for any eviction.

Run those five steps consistently and the vast majority of small-owner violations simply never happen. If you want a head start, CertRent lets you generate a compliant lease, e-sign it, and offer optional rent reporting in one place.

Frequently asked questions

What is the most I can charge an applicant to apply?

$20 total, under RPL 238-a, covering the background and credit check together. You must waive it entirely if the applicant provides their own report from the last 30 days, and you must give them a copy of any report you run plus an itemized receipt. Anything labeled a "processing" or "admin" fee on top of the $20 is illegal.

I only own a two-family — does Good Cause Eviction apply to me?

Most likely not. Good Cause exempts owners of 10 or fewer units, and separately exempts small owner-occupied buildings, so a typical mom-and-pop landlord is exempt. But you still must give proper 30/60/90-day notice for non-renewals or increases over 5%, and you must go through housing court to evict. Confirm your specific status before relying on the exemption.

Can I reject an applicant because of a past housing court case?

No. RPL 227-f bans "tenant blacklisting." You cannot deny housing or retaliate because someone was once a party to a housing court proceeding, even if a screening report flags it. Judge applicants on income, rent history, and references instead.

When can I run a criminal background check?

Not until after you make a conditional offer, under the Fair Chance for Housing Act. If you then want to withdraw the offer based on a conviction, you must do an individualized assessment tied to safety, and give the applicant a chance to respond. Blanket "no records" policies are illegal.

How long do I have to return a security deposit?

14 days after move-out, with an itemized statement of any deductions. Miss the deadline and you generally forfeit the right to keep any of it. You must also offer a pre-move-out walk-through so the tenant can fix small issues first.

Can I promise a tenant that rent reporting will raise their credit score?

No — and you shouldn't. Rent reporting helps credit-invisible renters and can factor into VantageScore and FICO 9+, but classic FICO 8 and mortgage scores ignore it. Offer it as a real but limited benefit, get written consent, and allow opt-out. In New York, reporting is voluntary today; the A2729 bill that would formalize it is still pending.

Official sources

• NYC Department of Housing Preservation and Development (HPD) — registration, bedbug/heat rules, and required disclosures.
• NYS Homes and Community Renewal (HCR) — Good Cause Eviction and rent-regulation guidance.
• NYC Department of Consumer and Worker Protection (DCWP) — FARE Act broker-fee enforcement.
• NYC Commission on Human Rights (CCHR) — source-of-income and Fair Chance for Housing enforcement.
• New York State Attorney General — deposit, application-fee, and landlord-tenant resources.
• Consumer Financial Protection Bureau (CFPB) — credit reporting and rent-reporting consumer rules.

This guide is educational information, not legal advice. Facts current as of July 2026; laws change — verify with the official sources above.