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The introduction of New York’s Housing Stability and Tenant Protection Act of 2019 (“HSTPA”)-Part C

Part C. So You Didn’t Make Rent this Month? Recent New York Legislation Protects Your Rights

Day 1-6 of Not Paying Rent –Notification & Late Fee

A landlord must notify the tenant via certified mail, within 5 days of the rent due date. Late fees may not be charged until the sixth day after the rent was due. The maximum late fee is restricted to either $50 or 5% of the monthly rent, whichever is less.

Day 6-14 –Legal (Eviction) Proceedings

A landlord must make a demand for rent in 14 days prior to the proceeding. Oral demands are permitted but will not count for purposes of a legal demand. The tenant will have 10 days to answer the demand or be in default. The tenant may also pay the rent prior to the proceeding, in which case the landlord would not be able to continue with the proceeding.

A Landlord May Not Use the Following Methods to Evict a Tenant

  • Using or threatening the use of force;
  • Landlord conduct which interferes with the tenant’s comfort, tranquility, peace, or quiet in their unit; or
  • Preventing or threatening to prevent the tenant’s occupancy of the unit (such as changing the locks).

The introduction of New York’s Housing Stability and Tenant Protection Act of 2019 (“HSTPA”)-Part B

Part B. Problems with your landlord? Recent New York legislation enhances your rights.

Lease Renewals

If a tenant has been living in a unit for less than one year, and the landlord plans to not offer a lease renewal or plans to increase the rent by more than 5%, the landlord must give the tenant at least 30 days advance notice. If the tenancy was for 1-2 years, the landlord must provide at least 60 days’ notice. If the tenancy was for 2 years or more, the landlord must provide at least 90 days’ notice.

Early Lease Termination

If a tenant decides to vacate his/her unit prior to the lease end date, the landlord now has a duty to mitigate the damages. This means that the landlord must make “reasonable and customary steps” to relet the unit for the current lease value or market value, whichever is lower. The effect is that whereas formerly, a tenant who abandoned his lease would almost certainly still be on the hook for the remainder of his/her lease payments, with new legislation, the landlord must try to find a new tenant to lease the unit and if successful may not charge the former tenant for those months of rent.

The introduction of New York’s Housing Stability and Tenant Protection Act of 2019 (“HSTPA”)-Part A

Part A. How it affects the leasing process of rent-stabilized and unregulated units:

Credit and Background Checks

Landlords may only charge a maximum of $20 or the actual cost of the check, whichever is less, for performing a credit and background checks on prospective tenants. Additionally, the landlord must provide the prospective tenant with a copy of the report and a receipt from the credit reporting agency. Alternatively, tenants may provide the landlord with a copy of their credit or background check, conducted within the past 30 days; in this case, the landlord would not be able to charge a fee.

Blacklists

Blacklists were a way for Landlords to identify if a prospective tenant was ever involved in an eviction proceeding or other landlord-tenant action. Information obtained from a blacklist is no longer a valid reason for rejecting a prospective tenant.

Security Deposits

Security deposits are now limited to a maximum of one-month’s rent.

Inspection

After signing the lease but before occupancy begins, the tenant must be offered an opportunity to inspect the unit with the landlord. They must each note the condition of the unit on a signed agreement. This agreement can later be used as evidence if the landlord decides not to return the security deposit due to damage in the unit.

Resale and The First Sale Doctrine

Can reselling products get you into trouble? Or, can you stop people from reselling your product? Let’s dig into the spirit of trademark protection and an important rule- The First Sale Doctrine.

Have you ever sold your stuff like bikes or phones on the internet? Have you purchased one? Since the early 2000s when E-commerce platforms have mushroomed, much of the trade has taken place at both brick-and-mortar shops and online stores. Reselling goods, among other things, has become more feasible and convenient than ever before. However, can you sell any goods in any way you like even if it’s trademarked and tagged with “®” and “™”? Will your resale business constitute trademark infringement? Let’s take a look at the following examples.

  1. Kelly is always unsettled about technology and desperate to keep abreast of new phones. Knowing a new model is coming out, Kelly wants to sell her old phone “AA Note 8™” online as used product to compensate for the upcoming expense. Will Kelly’s sale infringe the mark owner AA Tech Inc’s right?
  2. Tim has an issue with impulsive buying. On Monday morning, he went out for a cup of coffee but ended up having a brand-new AA Note 8™ in hands. As much as he regretted, within a second, Tom wants to sell the phone online and earmarked it as a brand-new product. Will Tom’s sale infringe the mark owner AA Tech Inc’s right?
  3. Bob is fond of AA Tech products and is a maestro of dropshipping. He was somehow able to acquire a batch of brand-new AA Note 8™ at wholesales prince. He now plans to retail it at his online business storefront “Smartphone Bob” for a fortune. Will Bob’s sale infringe the mark owner AA Tech Inc’s right?

The critical mission of Trademark Law is to identify the source of goods and protect owners’ goodwill and reputation from being diluted or tarnished by consumer confusion. It is all about the protection of goodwill and prevention of confusion. When it comes to resale and trademark infringement, one specific rule needs to be taken into account: the first-sale doctrine (or exhaustion rule). The first sale doctrine limits trademark owner’s right by dictating that those who resell genuine trademarked products are generally not liable for trademark infringement. The rationale behind that is the sale of genuine products will not damage owners’ goodwill or cause confusion to consumers.

However, the first sale doctrine does not apply when there is a material difference between resold products and original products. If a resold product is materially different from those sold by the owner, the resold product is not genuine. The material difference exists when a reseller does not maintain the same level of quality control, customer service, warranty, or return policy. These nonphysical characteristics are expected by consumers. If consumers’ expectation falls short with resentment, the reputation, goodwill, and integrity of a brand will decline.

Let’s go back to the previous examples. Kelly’s sale of the phone as a used product might not infringe AA Tech’s right. The phone is genuine. And the buyer knows that the phone was used by Kelly and has no expectation that Kelly would provide the same service as AA Tech will do. The phone is going to be sold as it is. There will be no confusion of the buyer about the source of product and thus no detriment to AA Tech’s goodwill.

Tim’s sale is pretty much the same. Although he is planning to sell the phone in brand-new condition and a buyer will expect the quality as it should be, the buyer will not be confused with the source of the phone; the buyer knows that he or she is not buying the phone from AA Tech but from Tim, a random individual.

However, Bob’s sale might be a different story. Bob wants to sell a batch of phones through his online storefront Smartphone Bob, where consumers are likely to perceive it as authorized seller, franchisee, branch, or affiliation. Buyers will expect Smartphone Bob to provide the same service and quality control that AA Tech is providing. They will also assume that Smartphone Bob has in depth knowledge of the phone. If Smartphone Bob cannot provide and maintain such, even though there may have been no physical change in the phone, there was a material difference in the nonphysical characteristics associated with the phone. Since a materially different phone is not genuine, the sale of such phones may result in trademark infringement. And consumers may be confused about the source of the phone.

In real life, to determine whether the first purchase doctrine applies to your resale or dropshipping business is not easy and always subject to the totality of circumstances. But keep it in mind: the less confusion you contribute to consumer, the less likelihood that infringement would occur. Other than the trademark issue, copyright is also a major concern where the first sale doctrine also applies.

To know more about your rights, please stay tuned or Contact Us.