Multi-Family Landlord's Responsibilities
As the owner of a multi-family property, the landlord is responsible for the entire property’s structures and financial/legal affairs. They may share these responsibilities with a management company or a dedicated manager or live-in super (if the property is large enough to warrant dedicated staff). In some cases, the landlords may even share parts of their responsibilities with the tenants through mutual agreement.
If you own a multi-family property in NYC and wish to rent out its units, it’s important to understand what your responsibilities as a landlord would include.
Adherence To Rent-Stabilized Status
If you own a multi-family property with six or more units, was built before 1974, and doesn’t have a co-op status, it’s important to verify if it’s rent-stabilized. If some or all of the apartments in your multi-family are rent-stabilized, it should be communicated in the listing.
You can only increase the rent by the percentages set by the city. They are updated every year. Eviction from rent-stabilized units has to follow specific requirements/conditions to be considered legal.
If a tenant breaches the lease agreement, is not using the unit as a primary residence (spending less than six months there), or you (the landlord) want to occupy the unit yourself, you may give proper notice to the tenant and start working on the eviction process.
Avoiding Violations and Preventing Nuisance
As a landlord, you will be responsible for ensuring that the building doesn’t have any violations. You can also be held responsible for your tenant’s misbehavior and disruptive conduct.
If they are being a nuisance to the neighborhood, you will be responsible for curbing that behavior because a legal complaint from your neighbors may result in the city holding you liable for your tenant’s behavior. This may include loud music, unchecked pets, etc.
Structure and Energy Use
A landlord is responsible for maintaining the structure of the multi-family in a reasonable condition. This includes roof, load-bearing walls, foundation, etc. You are responsible for ensuring that the structure is safe for the dwellers and doesn’t pose any threat to the residents, even in extreme weather conditions.
Similarly, multi-family owners may also need to reduce their energy use to make the building greener and more efficient. This improves tenant comfort, but it’s unclear whether the cost of these initiatives can be passed on to the tenants or not.
Habitable Conditions (Heat, water, no pests/mold)
All landlords in NYC are responsible for ensuring that their rental units are habitable. If you own an apartment in a co-op or condo, the bulk of that responsibility falls on the building’s management.
However, as the owner of the multi-family, you will need to ensure that the building has no pests and molds. Landlords/owners are also required to get rid of the conditions facilitating the presence of mold and pests.
NYC heat laws define the time period and temperature that the landlord needs to ensure within the multi-family units. Landlords are also expected to ensure the availability of hot water for the tenants in the winter.
This broadens the scope of a landlord’s responsibility to HVACs and any other heating and cooling systems they need to ensure habitable conditions inside multi-family units. However, you are not responsible for providing cooling in the summer, though it may improve your multi-family’s attraction.
Maintenance and Repairs
As a multi-family landlord, you would be required to maintain the property. This includes the building structures, heating, cooling, and elements like plumbing, electricity, and general upkeep of the building.
You will also be required to maintain the units themselves, which includes any plumbing and electricity problems in individual units or general wear and tear in unit walls, windows, doors, etc. The maintenance requirements may change from season to season.
If there are gas pipelines in the building, they need to be checked/inspected by a Licensed Master Plumber (LMP) once every four years.
If a tenant damages the unit or another part of the building, they may be responsible for the repairs. But if repairs are needed because of the damage caused by normal wear and tear, it will be your responsibility as a landlord.
Make sure you adhere to the given timeframe allotted for repairs (after the request is raised by the tenant), or they would be well within their rights to raise a complaint. If the repairs require the tenant to temporarily vacate the property, especially if it’s connected to a warranty of habitability which is a landlord’s responsibility, you may need to arrange/pay for alternative accommodation.
You are responsible for making the multi-family safe for all residents. This includes installation and routine checking of smoke and carbon monoxide filtres, installing window guards (unless there are no children in the building), and removing lead-based paint. You should also ensure prompt repairs for damages that may threaten the safety of your tenants.
The landlord will also be responsible for managing all the finances of the building. That’s what makes it different from a co-op and condo, where a board consisting of the residents of the building makes these decisions.
The landlord will directly manage the finances of the building, including taxes, mortgages, and improvements. These costs are usually rolled into the tenant’s rent and not charged separately, as is the case with co-ops and condos.
If you have listed the amenities that tenants will have access to in a lease, it’s your responsibility to make sure these are provided. It may include unconditional use of the washer-dryer, storage space, use of front yard/backyard, etc.
Multi-Family Landlord's Rights
Multi-family landlords enjoy many of the rights that landlords of other property types enjoy in NYC.
Credit Check (Financial Vetting) and References
You have the right to assess the finances of potential tenants to ensure whether they can afford to consistently pay their rent. You can pull their credit report to gauge their payment history. You can also ask for personal and professional references when vetting your tenants.
However, it’s important that you don’t deny a potential tenant based on discriminatory reasons. As individuals, multi-family landlords may be more exposed/vulnerable to discriminatory lawsuits than co-op boards.
The landlord has the right to ask for one month’s deposit before renting out a unit in their multi-family. However, the deposit has to be returned in full when the tenant vacates, or if you have a legal right to retain part of this deposit to cover unpaid rent, utilities, or pay for damages, you need to inform the tenant of this within 14 days of the vacancy.
Being Notified About Any Change
As a landlord, you have the right to be informed about any significant change the tenant is planning or making in your property. It’s a good idea to discuss this topic comprehensively in the lease and clearly explain what changes the tenant can make without informing you and what kind of changes they must make beforehand.
Rent Collection and Increase
You have the right to receive timely rent. If the rent is delayed, you are allowed to charge a late fee, but only if it’s stated in the original or renewed lease and the tenant has knowingly agreed to it. Rent is considered late if it’s not paid within five days of the due date. The late fee cannot exceed $50 or 5% of the current rent, whichever is lower.
Your first recourse is a notice to let the tenant know that they are behind on their rent. If they don’t comply within a few days, you can serve them with a 14-day notice to pay or evict the premises. If they neither pay the rent nor evict the premises after 14 days, you can reach out to the court to start the legal eviction process. As a multi-family landlord, you do not have the right to forcefully evict a tenant or lock them out of their home, even if they haven’t replied to your notice.
You can increase the rent even if the units are rent-stabilized (up to the allowed limit), but it’s imperative to give proper notice in both rent-stabilized and market-rate apartments. The notice period is determined by how long a tenant has occupied the unit.
As the landlord, you or your representative (property manager, repairman, etc.) have the right to enter the rental units for a valid reason if you inform the tenant beforehand or if there is an emergency. The reasons may include repair work or inspection of the property.
Noise and Pet
Since it’s your property, you can determine whether to allow pets in your multi-family or not. This has to be communicated clearly at the time of the lease. Similarly, you would be responsible for ensuring that your tenants are not a noise nuisance. So you can give your tenants verbal warning if you receive a complaint from other tenants or from your neighbors. If the situation persists, you may have the legal right to evict such a tenant, but the threat of eviction processing alone might be enough to ensure a resolution.
You have the right to evict a tenant even if their lease isn’t up if they are guilty of non-payment (after the appropriate notice is served) or if they violate any of the lease terms.
As a landlord, you are within your right to ask your tenant to buy renter’s insurance, but it’s important to be reasonable with your coverage requirements since higher levels of coverage usually come with a higher yearly insurance fee.
Ambiguous Rights and Responsibilities
Surroundings (Snow removal)
The law dictates that any “person having charge of the building” is responsible for clearing snow off their adjacent sidewalk, but that doesn’t explicitly allot the responsibility to tenants or the landlord. In a multi-family property with multiple tenants, the responsibility of snow removal or paying for the snow removal may be shared by all residents of the multi-family.
Multi-family Landlord: On-Premises vs. Off-Premises
It’s important to understand that a multi-family landlord’s rights and responsibilities do not change if they are not present on the premises, i.e., not occupying part of the multi-family property. However, the methods of exercising these rights and discharging their responsibilities can significantly change.
Let’s take the landlords that reside on the property. They are accessible to tenants and can keep a close eye on the property. They can handle many of the problems like noise complaints or repair requests from tenants right away. This arrangement makes it easier for them to discharge their responsibilities.
If the landlords do not occupy the multi-family units themselves, they mostly have to act through proxies. A property manager that can handle repair calls from tenants at any time might offer a lot of benefits in this situation, but it will cut deep into the multi-family’s profits. Otherwise, the landlord can ask the tenants to take care of the repairs themselves and deduct the expenses from the rent.