New York State's Good Cause Eviction Law took effect April 20, 2024, extending eviction protections to many NYC tenants who previously had no coverage under Rent Stabilization. But the law has significant carve-outs, and one of the most consequential is the exemption for owner-occupied buildings with 10 or fewer units.
This exemption is not obvious from a first reading of the law, and many landlords who could qualify haven't structured their operations to take advantage of it.
The exemption in plain language
Under NY Real Property Law §231-c, Good Cause Eviction does NOT apply to a tenancy where all of the following are true:
- The building has 10 or fewer residential units
- The owner uses one of the units in the building as their primary residence
- The owner is a natural person (not a corporation, LLC, or partnership)
- The occupancy is genuine and continuous
If all four conditions are satisfied, the landlord is not restricted by Good Cause Eviction rules — including the rent increase reasonableness standard and the just-cause termination requirements. Standard NY landlord-tenant law applies (30-day or 90-day notice depending on tenancy length), but no substantive good cause is required to end the tenancy or refuse renewal.
What "10 or fewer units" means
The exemption is measured at the building level, not the parcel or ownership level. If you own two adjacent triplexes, each is a 3-unit building — each qualifies. If you own a 12-unit building, no exemption applies to any of the units, even if you live in one.
Related buildings under common ownership are not aggregated for this test. This differs from some other laws that aggregate common ownership.
The "primary residence" test
Good Cause specifically requires primary residence — not just occasional occupancy. The New York Department of State has interpreted this to require:
- Physical residence for more than half the year
- No competing primary residence claim elsewhere
- Documented residency indicators (voter registration, driver's license, tax returns)
- Genuine occupancy, not a paper arrangement
If you have a vacation home elsewhere that you also claim as a residence, or if you claim primary residence for tax purposes at another address, the exemption is likely unavailable to you.
Why the natural person requirement matters
The exemption specifically requires ownership by a natural person. This is a significant restriction:
LLC ownership breaks the exemption. If your building is held in an LLC — even a single-member LLC where you are the sole member — the LLC is the legal owner. The exemption does not apply.
Trust ownership creates uncertainty. Living trusts where the grantor is also the trustee and beneficiary may qualify in some interpretations, but the law is not settled. Consult an attorney if you own through a trust and want to rely on this exemption.
Corporate or partnership ownership. Also excluded.
If you currently own through an entity and want to qualify for the exemption, you may need to transfer title to personal ownership. This has tax and liability implications — don't do it without professional advice.
What still applies even under the exemption
Being exempt from Good Cause Eviction doesn't exempt you from:
HPD annual property registration. Required for any building with 3+ units, or any owner-non-occupied building. If your building has 3-10 units, you still must register annually.
Rent Stabilization Law. Good Cause is separate from Rent Stabilization. A building can be Rent Stabilized (6+ units, pre-1974, or tax program enrolled) AND exempt from Good Cause. You still comply with RSL.
Local Laws. Window guards, bedbug disclosure, lead paint, smoke and CO detectors, energy benchmarking (for larger buildings), boiler inspections — all still apply.
Security deposit rules. HSTPA's 1-month cap and 14-day return still apply.
Habitability warranty. State law imposes an implied warranty of habitability regardless of Good Cause status.
The Good Cause notice — required regardless
One important detail: even if your building is exempt from the substantive rules of Good Cause, you may still be required to provide the Good Cause notice at lease signing or renewal.
The notice informs tenants of their Good Cause rights (if any) and provides transparency about coverage. Different guidance is available on whether exempt landlords must serve the notice — but conservative practice is to serve it and note the exemption basis, so tenants understand their rights are limited.
Documenting your exemption
If you rely on the exemption, be prepared to prove:
- Property record showing personal ownership (not entity)
- Deed history showing continuous personal ownership
- Building record showing 10 or fewer residential units (Certificate of Occupancy is authoritative)
- Owner residency documentation: driver's license, voter registration, utility bills, mail
- Any tenant lease showing the exemption acknowledgment
Keep these records accessible. If an eviction action is challenged, the burden is on the landlord to prove the exemption applies.
Common misconceptions
"I live in one unit of my 12-unit building, so I'm exempt." No — over 10 units, no exemption. Your primary residence status doesn't help.
"My LLC owns the building but I live there." No — LLC ownership breaks the exemption. Only natural person ownership qualifies.
"I own a triplex and rent all three units, but I visit one occasionally." No — you need primary residence, not occasional occupancy.
"The exemption means I can evict at will." No — you still need to serve proper notice, respect the terms of any lease, and follow state landlord-tenant law. Good Cause protection is what's removed, not all tenant protections.
The practical bottom line
If you're a NYC landlord with 10 or fewer units and you live in the building as your primary residence, this exemption is significant. It gives you back operational flexibility that Good Cause otherwise removes.
But qualifying requires attention to structure: personal ownership (not through entities), genuine primary residence, and building size within the limit. Landlords who want to qualify should verify these facts before an eviction dispute — not during one.
If any element is uncertain, consult a NY-licensed attorney. The exemption's rules are new (April 2024), and interpretations may evolve as courts weigh in.