Property Management Laws And Regulations In New York

New York regulates third-party property management through several authorities at once, and the rules that matter most to a management company are the ones covering your license, your client trust accounts, and the money you hold on behalf of owners and tenants. This guide covers those rules for professional managers, with the statute or agency regulation behind each one.

Everything below is sourced to New York's own statutes, agency rules, and court materials rather than to secondhand summaries. Specific dollar amounts and deadlines do change; the citations do not, so you can always open the authority and confirm the current text before you act on it.

Licensing Requirements For Property Managers

New York requires a real estate broker license under Real Property Law Article 12-A for anyone who, for a fee, lists, sells, exchanges, leases, or collects rent on behalf of another. Third-party property management companies that collect rent or place tenants in vacant units on behalf of an owner client must be licensed as a real estate broker; firms performing strictly maintenance work without handling client funds or leasing are not required to hold a license. Broker licenses issued by the Department of State are valid for a two-year term.

• A real estate broker license is required for any person who, for another and for a fee, lists, sells, exchanges, leases, negotiates a lease, or collects or offers to collect rent for the use of real estate. (N.Y. Real Prop. Law Art. 12-A)
• A property management company that collects rent or places tenants in vacant units on behalf of a landlord client must hold a real estate broker license; providing strictly maintenance services that do not involve handling client funds does not require licensure. (N.Y. Real Prop. Law Art. 12-A)
• A real estate broker license issued by the Department of State is valid for a two-year term. (N.Y. Real Prop. Law Art. 12-A)

Client Trust Account Rules

New York law treats security deposits and rent-related advances collected by a landlord or managing agent as trust funds that remain the tenant's money, not the landlord's or manager's, and bars commingling those funds with the recipient's own money. For buildings with six or more residential units, the funds must be placed in an interest-bearing account, and the depositor must be told in writing which bank holds the money. Lease clauses attempting to waive these protections are void.

• Money deposited or advanced for the rental of real property continues to be the money of the person making the deposit and must be held in trust by the landlord or agent; it may not be commingled with the recipient's personal funds. (N.Y. Gen. Oblig. Law § 7-103)
• In buildings with six or more residential units, security deposits must be placed in an interest-bearing account earning the prevailing rate a bank would pay on a savings account; the recipient may retain up to 1% per year as an administrative fee, with any excess interest belonging to the tenant. (N.Y. Gen. Oblig. Law § 7-103)
• If a security deposit is placed in a bank, the landlord or agent must give the depositor written notice of the name and address of the bank and the amount deposited. (N.Y. Gen. Oblig. Law § 7-103)
• Any lease provision by which a tenant waives the trust, non-commingling, or interest protections of this section is absolutely void as contrary to public policy. (N.Y. Gen. Oblig. Law § 7-103)

Trust account rules are where New York management companies get into trouble fastest, because a shortage is a licensing problem and not just a bookkeeping problem. The New York Department of State treats commingling as a licensing matter in its own right, so trust accounting for property managers has to be built to prove separation, not just achieve it. The habits that keep you clean are the boring ones: deposit on time, never let operating money and client money mix, reconcile every account every month, and keep a per, property record you could hand to an auditor without preparing it first. Our guide to preparing for a trust account audit walks through what examiners actually ask for.

Security Deposit Rules

The Housing Stability and Tenant Protection Act of 2019 extended the one-month security deposit cap to nearly all residential tenancies statewide and requires landlords to return deposits with a written itemized statement within 14 days after a tenant vacates.

• A landlord may not demand or receive a security deposit or advance in excess of one month's rent for most residential dwelling units, a cap extended statewide to previously unregulated units effective June 14, 2019. (N.Y. Gen. Oblig. Law § 7-108(1-a))
• Within 14 days after a tenant vacates, the landlord must give the tenant a written itemized statement of the basis for any amount of the deposit retained and return the remaining balance. (N.Y. Gen. Oblig. Law § 7-108)
• For buildings with six or more units, any accrued interest on the deposit (net of up to a 1% administrative fee) must be paid to the tenant. (N.Y. Gen. Oblig. Law § 7-103)

Lease Agreements And Required Disclosures

New York requires written notice of lease non-renewal and of any rent increase of 5% or more, scaled to how long the tenant has occupied the unit, and every residential lease is deemed to include a non-waivable warranty of habitability.

• A landlord proposing not to renew a tenancy, or to raise the rent by 5% or more, must give written notice of at least 30, 60, or 90 days depending on whether the tenant has occupied the unit for less than one year, one to two years, or two or more years. (N.Y. Real Prop. Law § 226-c)
• If a landlord fails to give the required notice under this section, the tenant's lawful tenancy continues under the existing lease terms until the required notice period has elapsed. (N.Y. Real Prop. Law § 226-c)
• Every written or oral residential lease is deemed to include a covenant that the premises are fit for human habitation, and any tenant waiver of this warranty is void as against public policy. (N.Y. Real Prop. Law § 235-b)

Rent, Late Fees, And Other Charges

Outside of New York City's rent-stabilization system, which is a distinct, separate regime, New York has no general statewide rent control. However, the 2019 HSTPA capped late fees and application fees statewide, and the 2024 Good Cause Eviction Law now limits 'unreasonable' rent increases on many covered units in New York City and in municipalities that opt in.

• A late fee may not exceed the lesser of $50 or 5% of the monthly rent, cannot be imposed until the rent is at least 5 days late, and must be disclosed in the written lease. (N.Y. Real Prop. Law § 238-a)
• A landlord may not charge a prospective tenant an application, processing, or move-in fee other than the actual cost of a background and credit check, capped at $20, and even that fee is waived if the applicant provides their own report from within the prior 30 days. (N.Y. Real Prop. Law § 238-a(a))
• Under the Good Cause Eviction Law, rent increases on covered units are limited to a 'local rent standard' equal to the lower of 10% or 5% plus the annual change in the applicable regional Consumer Price Index; the law applies automatically in New York City and only in other municipalities that adopt it by local law. (N.Y. Real Prop. Law §§ 211, 212, 213)
• New York City's rent-stabilization system, which separately regulates rent increases and renewal leases for regulated apartments, is administered by NYS Homes and Community Renewal and is distinct from the statewide Good Cause Eviction Law. (N.Y. Emergency Tenant Protection Act; NYC Rent Stabilization Law)

Fee income is also taxable income, and how you record management fees, late fees, and pass, through charges affects both your compliance position and your books. See our guide to New York property management tax deductions for the reporting side.

Fair Housing Obligations

Housing discrimination in New York is prohibited under the state Human Rights Law and enforced by the New York State Division of Human Rights, which recognizes several protected categories beyond federal fair housing law, including lawful source of income, sexual orientation, gender identity, marital status, and status as a domestic violence victim.

• New York's Human Rights Law makes it unlawful to refuse to sell, rent, or lease, or otherwise deny, a housing accommodation because of race, creed, color, national origin, citizenship or immigration status, sexual orientation, gender identity or expression, military status, sex, age, disability, marital status, familial status, lawful source of income, or status as a victim of domestic violence. (N.Y. Exec. Law § 296(5))
• The New York State Division of Human Rights is the state agency responsible for investigating and enforcing housing discrimination complaints under the Human Rights Law. (N.Y. Exec. Law Art. 15)

Habitability And Safety Duties

Every New York residential lease includes a non-waivable implied warranty of habitability, and landlords are barred from retaliating against tenants who make good-faith habitability, code, or discrimination complaints, or who organize with other tenants.

• Landlords warrant that leased premises and common areas are fit for human habitation and that occupants will not be subjected to conditions dangerous or detrimental to life, health, or safety; conditions caused by the tenant's own misconduct are excluded, and the warranty cannot be waived. (N.Y. Real Prop. Law § 235-b)
• A landlord may not retaliate against a tenant, such as by eviction, non-renewal, or an unreasonable rent increase, for a good-faith complaint about a habitability or code violation, discrimination, or for organizing or joining a tenants' association; a retaliation claim raised within one year of the protected activity creates a rebuttable presumption that the landlord's action was retaliatory. (N.Y. Real Prop. Law § 223-b)
• The retaliation protections of this section apply to all residential rental premises except owner-occupied dwellings with fewer than four units. (N.Y. Real Prop. Law § 223-b)

Eviction Basics

Residential evictions in New York proceed as summary proceedings under the Real Property Actions and Proceedings Law. Nonpayment cases require a 14-day written rent demand, and holdover or non-renewal cases require 30 to 90 days' notice depending on tenancy length. Matters are heard in New York City's Civil Court Housing Part or, elsewhere in the state, in city, town, and village courts.

• Before filing a nonpayment eviction proceeding, a landlord must serve a written rent demand giving the tenant at least 14 days to pay the rent due or surrender the premises. (N.Y. Real Prop. Acts. Law § 711(2))
• For holdover or non-renewal cases, a landlord must give 30, 60, or 90 days' written notice, depending on the length of the tenancy, before terminating a month-to-month or similar tenancy. (N.Y. Real Prop. Law § 226-c)

Recent Changes Worth Tracking

These are the New York changes most likely to affect a management company's procedures. Confirm the effective date against the source below before you update a lease template or a policy.

• Effective ongoing through 2025-2026, per the annual DHCR notice published each August 1: Since the Good Cause Eviction Law took effect in 2024, additional municipalities outside New York City (including Albany, Beacon, Ithaca, Kingston, Newburgh, Poughkeepsie, Rochester, and White Plains) adopted local opt-in laws through 2025 and 2026, each setting their own fair market rent exemption percentage and small-landlord definition. (N.Y. Real Prop. Law §§ 212, 213)

Staying Compliant Without Guessing

Most New York compliance failures are not decisions, they are drift: a deposit that sat too long, a reconciliation that got skipped in a busy month, a lease template that never got updated after a statute changed. Build the calendar first. Monthly trust reconciliations, an annual review of your lease and disclosure packet against current statutes, and a documented process for deposits and refunds cover the large majority of what an examiner will ask about.

This guide is a starting point for professional managers, not legal advice. For a specific dispute, a novel fact pattern, or anything with real money at stake, work with a New York attorney, and confirm the current text of any statute cited above with the New York Department of State Division of Licensing Services or the New York legislature.

Sources

Every fact above is drawn from one of the official sources below.

• N.Y. Real Prop. Law Art. 12-A, New York Department of State
• N.Y. Real Prop. Law Art. 12-A (licensing FAQ), New York Department of State
• N.Y. Gen. Oblig. Law § 7-103, New York State Senate
• N.Y. Gen. Oblig. Law § 7-108(1-a), New York State Senate
• N.Y. Real Prop. Law § 226-c, New York State Senate
• N.Y. Real Prop. Law § 235-b, New York State Senate
• N.Y. Real Prop. Law § 238-a, New York State Senate
• N.Y. Real Prop. Law §§ 211, 212, 213, New York State Senate
• N.Y. Emergency Tenant Protection Act; NYC Rent Stabilization Law, New York State Homes and Community Renewal
• N.Y. Exec. Law § 296(5), New York State Senate
• N.Y. Exec. Law Art. 15, New York State Division of Human Rights
• N.Y. Real Prop. Law § 223-b, New York State Senate
• N.Y. Real Prop. Acts. Law § 711(2), New York State Senate
• N.Y. Real Prop. Law §§ 212, 213, New York State Homes and Community Renewal (DHCR)