Hamptons Summer Season: The Landlord Lowdown On Rentals

To paraphrase the poet Alfred Tennyson, in spring a Hamptons homeowner’s fancy lightly turns to thoughts of renting out their homes for the summer. I have had people tell me that the rent they collect supports them for an entire year. Others use the opportunity to travel over the summer or even rent vacation homes in places like Italy and France. My home is worth too much for me to use it over the summer is a refrain I have heard more than once. Real estate brokers in the Hamptons derive a portion of their income from summer rentals. They often tell me that the trend is towards shorter term rather than seasonal rentals. For the landlord, three different tenants over a three-month period can result in greater rental income. Others prefer one tenant for the season, even if the result may be less income. A good example of the opportunity for gain with short term rentals has been the popularity of the kinds of services offered by the website Airbnb whose practices have been exposed and roundly criticized in an October, 2014 Report by New York State Attorney General, Eric T. Schneiderman as being illegal.

In 2007, the Town of Southampton adopted a rental permit law for the unincorporated portions in the Town. Among other things, it includes a restriction on rentals of fewer than fourteen days. Violations of the law can result both significant fines and criminal prosecution for misdemeanors. Some landlords who have gone to court to collect owed rent have learned that absent the required rental permit, the collection of rent is illegal. The Town of East Hampton was intending to create a rental registration law to go into effect in 2015, but seems to have lost its enthusiasm for it, although the concern with short-term rentals still exists. The Town of Southold is considering the creation of a prohibition on short-term rentals.

Some of the widely held beliefs among the public concerning rental laws contradict the facts. Homeowners contemplating becoming landlords should have a real estate attorney prepare the lease. Real estate brokers must use leases either prepared by an attorney or subject to review by an attorney.

New York Law addresses issues such as when the rent is due, (absent an agreement to the contrary stated in the lease, at the end of the month), who and how many persons may occupy, can the landlord limit the occupancy only to those named on the lease, (New York’s “Roommate Law” says No!), issues such as subletting and assignment of the lease, (both are permitted unless the lease prohibits it, and in some instances, permission by the landlord may not unreasonably be withheld), the tenants obligation to pay rent through the end of the term of the lease should they vacate before its expiration, (they must, unless the landlord agrees otherwise), the issue of security deposits, to whom they belong, what they may be used for, and when they must be returned, laws regarding eviction, lead disclosure, and Federal, State, and Local Fair Housing Laws.

A NY State Law that became effective on December 3, 2014, RPL Section 231-a, states that every residential lease shall provide conspicuous notice in bold face type as to the existence or non-existence of a maintained and operative sprinkler in the leased premises. If there is a maintained and operative sprinkler system in the leased premises, the residential lease agreement shall provide further notice as to the last date of maintenance and inspection. According to New York attorneys, Adam Lietman Bailey and Dov Trieman in an article they wrote which was published in the “New York Law Journal” on December 14, 2014, stated, “The law is effective through the entire state of New York and appears to cover both main leases and subleases as well as new leases and renewal leases and makes no exceptions for premises that are governmentally regulated or even governmentally run.” Managers of residential condominiums who allow rentals and residential cooperatives who have tenant shareholders as well as subtenants should consult legal counsel.