New York enacted Good Cause Eviction in April 2024 as part of the FY2025 state budget. The statute, codified at Real Property Law Article 6-A, fundamentally changes the residential landlord-tenant relationship for a large segment of unregulated apartments in New York City and gives other municipalities in the state the option to adopt similar protections. For multi-family owners and investors, the law affects lease forms, renewal practices, rent increases, eviction strategy, and the underwriting of any new acquisition. Unlike rent stabilization, which is a familiar regime with decades of guidance, Good Cause Eviction is a recent statute with limited interpretive case law and an evolving compliance environment. This guide explains what the law does, who is covered, what exemptions apply, and what owners need to do to stay compliant. For investors evaluating new acquisitions in light of the new rules, our guide to buying multi-family property in NYC covers the broader legal due diligence framework.
What the Good Cause Eviction Statute Does
Good Cause Eviction creates two related sets of rights for tenants in covered units. First, the statute restricts the grounds on which a landlord can refuse to renew a lease or evict a tenant. A landlord must establish a statutory good cause, drawn from a list of permitted reasons, before a court will issue a judgment of possession. Second, the statute establishes a rebuttable presumption that rent increases above a defined threshold are unreasonable, giving the tenant a defense to non-payment proceedings predicated on the increased rent.
Together, these protections approximate, but do not equal, the security of tenure that rent-stabilized tenants enjoy. A covered Good Cause tenant has a presumptive right to a renewal lease, but the landlord can defeat the presumption with a permitted reason. A covered Good Cause tenant can challenge an excessive increase, but the landlord can rebut the presumption of unreasonableness with evidence about operating costs and other factors. The statute is more flexible than rent stabilization but considerably more restrictive than the at-will tenancy that previously governed unregulated rentals.
The law took effect immediately on enactment for new leases and lease renewals in New York City. For other municipalities in New York, Good Cause is opt-in. A few cities, including Albany, Beacon, Hudson, Kingston, Newburgh, Poughkeepsie, and Ossining have adopted local versions. Many others have considered and declined. Whether the law applies in any given non-NYC market depends on the local opt-in status, which can change with each new local legislative session.
Who Is Covered: Determining Whether a Unit Falls Under the Law
The single most important step for an owner is determining whether each unit in the portfolio is a covered unit. The statute layers several exemptions, and the analysis is unit by unit, not building by building. A single building can contain covered units, exempt units, and units already covered by rent stabilization, each with its own legal regime.
A unit is generally covered if it is a residential rental in New York City, the tenant has occupied for more than the minimum threshold (the law applies to renewals and continuing tenancies), the unit is not subject to rent stabilization or rent control, and none of the statutory exemptions apply. The statutory exemptions remove a unit from coverage even where the basic occupancy test is met.
Among the most important exemptions are units in owner-occupied buildings with ten or fewer units, units in buildings constructed within the past 30 years (intended to encourage new construction), units with monthly rents above a high-rent threshold defined as a multiple of the area Fair Market Rent (initially set at 245 percent of FMR for the relevant unit type), units in cooperative or condominium buildings, units owned by certain institutional owners with very small portfolios, units occupied by employees of the landlord, hotel and seasonal use units, and certain government-subsidized units that are governed by other regulatory programs.
The portfolio size exemption is particularly tricky. The statute looks at the total residential rental holdings of the owner and any related entities. An LLC that holds one building with twelve units does not automatically qualify under the small-portfolio exemption if the same beneficial owner holds additional rental units in other entities. Owners with multiple LLCs need to aggregate when assessing exemption eligibility, and the entity structure does not by itself shield from coverage.
What Counts as Good Cause for Eviction or Non-Renewal
If a unit is covered, the landlord can pursue eviction or non-renewal only on one of the statutory grounds. The list of permissible grounds includes the following.
- Non-payment of rent. The tenant has failed to pay rent, and the unpaid rent is not the result of a rent increase that the tenant has standing to challenge as unreasonable.
- Material lease violation. The tenant has materially violated an obligation of the lease and has not cured after notice. The violation must be more than a technical breach.
- Nuisance or substantial damage. The tenant has committed a nuisance or willfully caused substantial damage to the unit.
- Use of premises for illegal purposes. The tenant has used the unit for an illegal purpose, including but not limited to drug-related activity that has been the subject of an arrest or conviction.
- Refusal to allow access. The tenant has unreasonably refused the landlord access for repairs, inspections, or showings to prospective buyers or tenants.
- Necessary repairs requiring vacancy. The unit must be vacated for repairs or rehabilitation that cannot be performed with the tenant in occupancy, and the landlord has obtained the required permits.
- Demolition. The landlord intends to demolish the building, with permits in hand and a credible timeline.
- Personal or family use. The landlord or an immediate family member intends to occupy the unit as a primary residence.
- Withdrawal from rental market. The owner intends to remove the unit from the residential rental market entirely, subject to good faith requirements.
The grounds are exclusive. A covered tenancy cannot be ended for any reason outside this list. A landlord who proceeds without a statutory ground risks dismissal of the holdover proceeding and exposure to attorney's fees if the lease so provides. The personal-use ground in particular has been a source of dispute, and courts have begun to demand specific factual showings rather than conclusory assertions.
The Rent Increase Standard and How to Compute It
Even where a tenant remains and the lease is being renewed, the law constrains how much the rent can increase. The statute creates a rebuttable presumption that any rent increase greater than the lower of (a) ten percent or (b) five percent plus the change in the regional Consumer Price Index for All Urban Consumers (CPI-U) is unreasonable. The presumption applies to the renewal rent and any subsequent increase during the tenancy.
The CPI-U component is computed as the year-over-year percentage change in the relevant regional index, published by the federal Bureau of Labor Statistics. The 5 percent plus CPI calculation has produced thresholds in the 8 to 9 percent range during the past two years, depending on the relevant 12-month window, and the 10 percent ceiling has been the binding threshold during periods of higher inflation.
A landlord whose proposed increase exceeds the threshold can still impose the increase, but the tenant can raise unreasonableness as a defense in any non-payment proceeding seeking the increased amount. To rebut the presumption, the landlord must produce evidence of operating cost increases, capital expenditures, or other factors justifying the higher increase. Documentation matters. A landlord who simply asserts that costs have risen will lose. A landlord who can show a documented increase in property taxes, insurance, fuel, or major repairs has a credible rebuttal case.
Best practice in most cases is to keep increases at or below the threshold. The threshold is a safe harbor. Increases at or below the limit are presumptively reasonable and create no litigation exposure on this issue. Increases above the threshold are economically appealing in some markets but should be reserved for situations where the documentation is in place and the landlord is willing to defend the increase if challenged.
Lease Drafting and Required Notices
The Good Cause statute imposes specific notice and disclosure requirements that must appear in covered leases. Failing to include the required notices does not by itself make a tenancy non-Good-Cause, but it does expose the landlord to defenses and to claims that the tenant was not properly informed of their rights.
Each new lease and lease renewal for a covered unit must include a written notice in a prescribed format informing the tenant whether the unit is subject to Good Cause Eviction and, if not, the specific exemption that applies. This is a substantive disclosure, not a boilerplate disclaimer. A landlord who claims an exemption must identify the exemption in writing, and a misidentified or unsupported exemption claim creates serious problems if the tenancy is later challenged.
Owners using legacy lease forms from 2023 or earlier should not assume that small modifications are sufficient. A complete review of the lease and rider package is necessary, including the notice of Good Cause status, the rent increase disclosure for any increase exceeding the threshold, and updates to default and remedies provisions to align with the new grounds for eviction. We have rewritten lease forms for several multi-family clients since the statute took effect, and the typical engagement is a thorough redraft rather than a patch.
Owners should also review the disclosures provided at lease signing more broadly, including lead paint, bedbug, sprinkler, window guard, and stove knob cover disclosures, all of which have their own statutory triggers. The leasing process for any covered unit needs a clear checklist that integrates Good Cause notice with the longer-standing required disclosures. Our broader contract review framework applies to lease agreements as well as purchase contracts.
Practical Implications for Acquisition Underwriting
Investors underwriting multi-family acquisitions in NYC must now incorporate Good Cause coverage into their analysis. Pre-2024 underwriting models often assumed the ability to push market-rate units to true market on turnover. Under the new law, that assumption is wrong for any covered unit. Pro forma rent growth assumptions need to align with the legal increase ceiling, and exit assumptions need to reflect the constrained rent trajectory.
On the diligence side, buyers should request the seller's coverage analysis for each unit in the building, including the specific exemption claimed where applicable. A seller representation that no units are covered should be tested against the statutory criteria, not accepted at face value. We have seen sellers misclassify units under the small-portfolio exemption based on entity-level holdings, only for the buyer to inherit a coverage problem at closing.
Buyers should also review existing leases for Good Cause notice compliance, identify any tenancies where the landlord has imposed an above-threshold increase that has not yet been challenged, and assess any pending or threatened tenant complaints. The seller's representations and warranties in the purchase agreement should specifically address Good Cause status and notice compliance, with appropriate indemnification for pre-closing exposure. The sellers' commercial real estate counsel should expect these provisions to be part of any 2026 multi-family transaction.
Lenders are also paying more attention. A lender underwriting a multi-family loan in NYC is likely to scrutinize the rent roll for above-threshold increases that could be challenged, the diversity of unit-level coverage status, and the building's capital plan in light of the new constraints on rent growth. For broader context on the legal due diligence framework, see our guide to buying multi-family property in NYC.
Interaction with Rent Stabilization and Other Regimes
Good Cause Eviction does not displace rent stabilization. Stabilized units remain governed by the Rent Stabilization Law and the Rent Guidelines Board's annual orders, which set permissible increases for one and two-year leases. A stabilized tenant has security of tenure and a renewal right that exceed Good Cause protections. The two regimes operate in parallel, and a single building can contain stabilized, covered Good Cause, and exempt market-rate units.
Owners should be careful when units transition between regimes. A unit that exits stabilization because of high-income or high-rent deregulation may then come within Good Cause coverage if the rent at deregulation falls below the high-rent exemption threshold. An owner who treats deregulated units as fully market may be operating in violation of Good Cause without realizing it. The exemption analysis should be run at every renewal for any unit that is not stabilized.
Section 8 vouchers, public housing, and other subsidized programs operate under their own federal and state regulatory frameworks. These programs typically have their own good-cause-equivalent protections embedded in the program rules. Good Cause Eviction generally does not apply to units regulated under these programs, but the analysis should be specific to the program because some hybrid arrangements have triggered coverage.
Litigation and Enforcement Patterns Since the Statute Took Effect
In the two years since enactment, NYC Housing Court has handled a steadily growing docket of Good Cause cases. Two patterns have emerged. First, courts have been receptive to coverage arguments raised by tenants in non-payment and holdover proceedings, often dismissing or staying cases until the coverage question is resolved. Owners who proceed without a clear coverage analysis lose preliminary motions and face delays even if they eventually prevail.
Second, courts have applied the rent-increase presumption with some consistency, requiring landlords to put on real evidence of operating cost increases or capital expenditures to justify above-threshold rent jumps. Conclusory testimony has been rejected. Landlords who maintain organized records of operating expenses, tax bills, insurance premiums, fuel costs, and major repairs are positioned to rebut the presumption when needed. Landlords who do not are not.
Local enforcement remains a question of evolving practice. The state and city have not announced a unified Good Cause enforcement scheme outside of the courts, so most disputes arise as defenses in housing court rather than as freestanding affirmative actions by tenants. That posture may change as the statute matures and as administrative and legislative actors propose enforcement models.
How Agarunov Law Firm Helps Multi-Family Owners
At Agarunov Law Firm we represent multi-family owners and investors in transactions and operational compliance across New York City. Our work on Good Cause includes coverage and exemption analysis at acquisition, lease form redrafting, renewal strategy, rent increase documentation review, and counsel on holdover and non-payment exposure. We coordinate closely with property management, accounting, and litigation counsel where pre-existing disputes need to be resolved alongside the broader compliance retrofit. Our office at 30 Broad Street in the Financial District serves clients across all five boroughs and the lower Hudson Valley. For investors looking at acquisitions in light of the new rules, we layer Good Cause review onto our standard multi-family due diligence, including rent roll analysis, regulatory status verification, and acquisition contract negotiation. For broader real estate practice information, our New York real estate practice page describes the full scope of representation we offer.
Frequently Asked Questions
Does Good Cause Eviction apply to my building?
It depends on the unit, not the building. A unit is covered if it is residential rental, located in NYC or in a city that has opted in, the tenant has the requisite occupancy history, and none of the statutory exemptions apply. The most common exemptions are owner-occupied buildings with ten or fewer units, buildings constructed within the past thirty years, units with rent above the high-rent threshold (which moves with the area Fair Market Rent), units in co-ops and condos, and units already governed by rent stabilization. Each unit needs its own analysis.
How much can I increase rent on a covered unit?
The statute creates a rebuttable presumption that any increase greater than the lower of ten percent or five percent plus regional CPI-U is unreasonable. You can impose a higher increase, but the tenant can raise unreasonableness as a defense in any non-payment proceeding for the increased amount. To rebut the presumption, you need evidence of cost increases or capital expenditures justifying the higher increase. Most owners stay at or below the threshold to remain in the safe harbor.
Can I refuse to renew a lease for a covered unit?
Only if you have a statutory good cause. The permitted grounds include non-payment, material lease violation, nuisance or willful damage, illegal use, unreasonable refusal of access, demolition, necessary repairs requiring vacancy, the owner's or immediate family member's intent to occupy as a primary residence, and withdrawal of the unit from the rental market. Refusing to renew without one of these grounds is not permitted, and a holdover proceeding without a stated ground will not survive the tenant's motion to dismiss.
What is the small landlord exemption and how is it counted?
Buildings owned by individuals or entities with very limited rental holdings can fall outside Good Cause coverage. The exemption is structured around portfolio size, and it aggregates holdings across related entities. An owner who holds one twelve-unit building through one LLC and several other rentals through other LLCs may not qualify for the exemption even though no single LLC exceeds the limit. Get a written analysis from counsel before relying on the exemption, especially if your ownership structure includes multiple entities.
Are new construction buildings exempt?
Buildings that received a certificate of occupancy within the past thirty years are exempt from Good Cause Eviction. The exemption was included to avoid discouraging new multifamily development. The exemption runs from the issuance of the original certificate of occupancy, and substantial gut rehabilitations do not generally restart the clock. A building built in 2010 will exit the exemption in 2040, at which point the units in the building will become subject to Good Cause unless another exemption applies.
What disclosures must I include in covered leases?
Each new lease and lease renewal for a covered unit must include a written notice telling the tenant whether the unit is subject to Good Cause Eviction. If the unit is exempt, the notice must identify the specific exemption. The disclosure is not boilerplate. A misidentified exemption can be challenged later, and an unsupported exemption claim creates exposure if the tenancy is contested. Owners should review their entire lease form, including riders, to bring it into compliance with current law before issuing any new or renewal leases.
Does Good Cause apply outside New York City?
Good Cause is opt-in for municipalities outside NYC. A handful of cities, including Albany, Beacon, Hudson, Kingston, Newburgh, Poughkeepsie, and Ossining, have adopted local versions, with adjustments to thresholds and exemption parameters in some cases. Many other municipalities have considered and declined. Owners with portfolios outside NYC should verify the current opt-in status in each market and recheck periodically because legislative action continues.
Need Legal Help?
Contact Agarunov Law Firm for a free consultation about your real estate transaction.
Schedule Consultation