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Where, when should you take action against a nonpaying tenant?

The change in New York state law last year that limited how much landlords could raise the rent in properties that are rent-regulated were welcomed by tenants throughout New York City and around the state. The new law has had some other impacts.

There's already been a significant increase in lawsuits by tenants alleging that landlords overcharged them for rent. One attorney, whose firm has seen a 30% rise in such claims, says the increase is in part because these claims can now go back six years instead of four. This puts many landlords at a disadvantage because they may not still have the records indicating improvements they made to a property five or six years ago or added expenses from that far back that warranted a rent increase.

The attorney notes that these claims are often made by tenants who are facing eviction for nonpayment of rent. This concern by landlords of tenants filing these claims has made some landlords hesitant about taking tenants to court who are just a couple of months behind on their rent. According to the Wall Street Journal, the number of these filings has been cut almost in half since late 2018.

Landlords are now more likely, according to the attorney, to settle nonpayment disputes with tenants with the Division of Housing and Community Renewal (DHCR) than in court. This is less expensive. Further, the people handling the disputes are more familiar with rent laws than most judges are.

Another attorney notes that if a landlord-tenant dispute is heard by the DHCR, there are other advantages. For example, a ruling by the agency is less likely to be overturned than a court ruling.

Of course, each case is different. However, it's worth considering at what point it's worthwhile to take action against a nonpaying tenant. As one of the attorneys notes, "Landlords were taking tenants to court for one or two months of nonpayment of rent that they had paid but the landlord's books were messed up/ So someone had to miss work for one or two months of nonpayment, something that gets settled in the hallway."

If you have an issue with a tenant who's not paying their rent, it's wise to consult with an experienced attorney. They can go over your options and provide guidance to help you determine the best course of action.

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