Getting the Rental Law Right

The East Hampton Town Board recently proposed a rental registration law that has become the topic of much debate. Ostensibly it is designed to address the problem the town has long had in enforcing the existing laws prohibiting group and transit rentals. Unfortunately, the proposed law does not really solve this problem in a meaningful way, although with a few tweaks it could be a lot more effective.

As a matter of full disclosure: My wife and I have owned a home in the Amagansett Dunes for 35 years. We’ve never rented it nor do we intend to. A number of the homes around us, however, have been rented to groups and transients over the years.

The proposed law requires that an owner submit an affidavit attesting to the number of persons to occupy the property, the proposed rental period, that there is a valid certificate of occupancy, and that refuse will be removed in a timely manner. This is insufficient. The owner should be required to attest under penalty of perjury that the home will be occupied by one family (as required by the town zoning code) and that no shares have been sold giving rights to individuals to occupy individual bedrooms (also prohibited by the zoning code).

At present, there is no legal obligation for landlords to ensure that their rentals comply with the existing laws prohibiting group or transient rentals. They (and their real estate agents) just take the money and run, often involving tens or even hundreds of thousands of dollars. It is the neighbors who are left with the consequences of loud parties, scores of guests, tenants coming home drunk at 3 and 4 a.m., and illegally parked cars.

Indeed, I would propose that the law also require that in any lease the tenant also represent that only one family will occupy the premises and that no shares have been sold. There is already precedence for this in the section of the town code dealing with affordable accessory apartments; it specifies six provisions that must be included in the lease of such an apartment.

The proposed law is very unclear as to whether a landlord has to get a new permit every time he enters into a new lease. The way I read the current draft, all a landlord has to do is update the affidavit in terms of the number of persons occupying the premises and the term of the lease. I suggest that there will be wholesale violation of this provision, as all an owner has to do is publish his rental registration number in any ad. An owner should go through the certification process every time he or she enters into a new lease, as what could be a legal lease one year could be an illegal group rental the next.

People have to get beach parking permits every year; the same should be true of rental permits, which should only be valid for the term of the lease in question. In fact, the Southampton rental permit law has such a provision.

In addition to issuing a rental permit number, the town should also issue a rental permit decal (again, like the beach parking permit) that should be prominently displayed on the door of the premises and that sets forth the registration number and the period for which it is valid. Given East Hampton’s limited resources devoted to code enforcement, it is really the neighbors who are able to identify illegal group and transient rentals. Unlike Southampton, however, East Hampton does not (and probably in the near future will not) have a database of property permits readily accessible on the Internet. The display of a permit will enable neighbors to easily ascertain if the landlord of a rental property has complied with the law rather than having to do a manual search at the Building Department.

Over the years I’ve been told by various code enforcement officers that the problem with enforcing the group rental law is their inability under the law to obtain access to the premises. Once again, the existing town code governing affordable accessory apartments provides a solution. That law requires that the lease of any affordable accessory apartment contain the following clause:

“The tenant consents to an inspection upon reasonable notice by the building inspector, or his/her designee, for the purpose of determining whether the apartment and all other structures on the property are in compliance with the code of the Town of East Hampton, the New York State Uniform Fire Prevention and Building Code, and/or the rules and regulations of any other agency having jurisdiction. The failure to schedule an inspection after due notice from the town or resisting, obstructing, and/or impeding the agents, servants, officers, and/or employees of the Town of East Hampton during an inspection of the premises is a violation of the East Hampton Town Code and subject to the fines and penalties provided herein.”

The proposed rental registration law should have a similar clause. It should provide that by applying for a rental permit the landlord consents to an inspection by the building inspector to ensure compliance with the law, and it should require that the lease of the premises contain an identical consent by the tenant.

Absentee landlords have been thumb­ing their noses at the laws relating to group and transient rentals for years. This has become a real quality-of-life issue in numerous areas of the town. If the town is serious about getting this under control, it needs to do more than what is currently being proposed.

Jack Hassid is a lawyer who practices commercial litigation in New York City.