On Monday, May 9, the State Senate passed S. 3115, a mandatory rent-deposit law sponsored by Housing Committee chair Vincent Leibell (R-Putnam).

The law would require tenants being sued for not paying rent to pay "all sums of past rent and future rent as it becomes due" to either the court or the landlord. If they failed to comply by the deadline (the second adjourned date in most cases), they would lose the right to a trial and the court would issue an immediate eviction order.

The landlord lobby has been demanding such a law since 1995. Republicans in the Legislature have consistently pushed it as a possible trade-off for the renewal of rent and eviction protections.

Tenant advocates see rent deposits as a way to speed up evictions and deprive tenants of the right to defend themselves when the landlord is charging unlawfully high rent or failing to make repairs or provide heat and hot water. "We do not intend to stand by while the constitutional due process rights of tenants are trampled and the rate of evictions is doubled," declares Met Council Chair Scott Sommer. Legal Aid civil lawyer Judith Goldiner calls the bill "hideous in every way imaginable."

A Housing Court administrative judge has characterized mandatory rent deposits as an "administrative nightmare," because of the titanic amounts of paperwork processing tens of thousands of deposit requests would create.

Rent deposits were first turned back in 1995, when City Council Speaker Peter Vallone and Housing Committee Chair Archie Spigner (both D-Queens) sponsored a resolution urging the state Legislature to enact a rent deposit law. Met Council joined others in fighting it, and Vallone could not get enough votes to get the resolution onto the floor—a rare defiance of his rule.

Landlords tried again in Housing Court in January 1996, declaring a "Justice Week" campaign to get judges to use their power under current law to order rent deposits. That also failed, as Met Council and the City-Wide Task Force on Housing Court prepared a friend of the court brief and Legal Aid and legal services attorneys volunteered to cover every courtroom.

According to most people who are familiar with how Housing Court works, issuing default judgments—usually used against people who don’t show up for court—against all tenants who can’t deposit the entire disputed amount is about the worst change you could make. "The public and many elected officials do not fully understand the danger," explains Larry Wood of the Goddard Riverside Community Council. "There are a whole host of reasons a tenant might not have the money they are sued for, including the fact that they might not owe any."

Most members of the state Assembly, including Housing Committee chair Vito Lopez, Manhattan Democratic chair Denny Farrell, and Brooklyn Democratic Clarence Norman, oppose the Leibell bill. Others who have supported rent deposits in the past have changed their positions. Earlier this year, Gloria Davis (D-Bronx) withdrew a rent-deposit bill she had sponsored, and in late April Nick Perry (D-Brooklyn) told a public meeting that he will put a "sponsor hold" on a bill he had backed.

The Leibell bill takes away tenants’ rights even more than earlier such measures. For example, tenants could still be evicted for not paying the deposit even if they were ready for trial before the deadline, but the court delayed the case due to a crowded calendar. It takes about two to three weeks for a city marshal to execute an eviction warrant when a judgment is issued.

Mandatory rent deposits would also conflict with practical policy considerations, such as not wanting to double or triple the number of low and moderate-income families evicted for their homes for owing relatively small amounts of back rent. At least 20,000 families are already evicted every year by city marshals, with probably at least as many leaving their homes under threat of imminent eviction. But the overwhelming majority of the 200,000 nonpayment cases brought each year are resolved without eviction—either by a determination that the tenant does not owe any rent, the tenant paying the back rent, or some combination of those two.

Under existing law, a tenant who is sued for back rent can respond that conditions in the building are dangerous to life, health, or safety. The state’s "warranty of habitability" law says that if the landlord does not provide all required services, he is not entitled to all of the rent. Given that there are 3 million code violations on record with the city's housing department, it is obvious that many tenants facing eviction are not liable for the rent demanded.

 Overcharges

Tenants also currently have the right to make the landlord establish that the rent being sought in court is the legal rent. Landlords must produce certified records from the state Division of Housing and Community Renewal (DHCR). (Unfortunately, most judges allow landlords simply to prove that the lease amount is registered, improperly requiring the tenant to prove that the rent exceeds the lawful regulated amount.)

Housing Court judges like to say that they are "deferring to the DHCR’s expertise," which is a nice way of saying that as DHCR does not enforce the overcharge law, they don’t have to either. DHCR typically takes up to five years to rule on an overcharge complaint, which is a long time for an overcharged tenant to continue paying 50%, 60%, or even 70% of their income for rent.

In fact, most tenants move out before even finding out if their rent is legal. The fact that tenants are only given five days to pay any back-rent judgment the court issues makes it even more appropriate for the legal rent to be determined before a judgment is issued.

The Leibell bill also tries to get around several objections raised against earlier rent-deposit bills. For example, it exempts rent "which is payable by government subsidy." In most cases, however, tenants who are applying for an emergency rent grant or who have been improperly cut off from or denied public assistance will not be able to prove from the beginning that their rent is "payable" by the government. As a result, it would force into the street thousands of families whose evictions are now prevented when they are found to be entitled to benefits.

The Leibell bill also says that the rent can be used for "emergency repairs." However, if emergency conditions exist, the landlord is not legally entitled to collect rent until they are corrected. Tenants who have been living with deplorable conditions should not have to turn over money they do not owe to pay the landlord's repair bills.

The only two other exceptions in the bill would be if the landlord is not "a proper party," or if the tenant can establish that he has already "quit the premises." This latter provision is clearly intended as an invitation for tenants to agree to leave their homes in exchange for not having to pay a small amount of rent arrears.

Some supporters of mandatory rent deposits claim that the law would "help" tenants, by identifying those with financial problems earlier. But for those whose financial problem is a brief hiatus between a job and unemployment benefits, or who do not owe any money in the first place, granting quick default judgments and eviction warrants to owners will only help tenants in one way—onto the street.