Key Takeaways
- The 10-unit exemption counts ALL residential rental units an owner holds statewide — not per building
- The 245% FMR threshold exempts individual units where rent exceeds 245% of HUD Fair Market Rent for the county and bedroom count
- New construction is exempt for 30 years from the original Certificate of Occupancy
- Owner-occupied buildings with fewer than 10 units are exempt, but the owner must actually reside in the building
- LLC and corporate ownership structures can affect exemption eligibility — beneficial ownership is what matters
Why Exemptions Matter
New York’s Good Cause Eviction (GCE) law restricts landlords’ ability to raise rents and evict tenants. But the law includes several important exemptions that remove specific properties from its coverage entirely. If your property qualifies for an exemption, GCE’s rent increase caps and eviction restrictions do not apply to it.
Understanding these exemptions is not optional — it is foundational to knowing your rights and obligations as a New York landlord. This guide breaks down every exemption in detail, including the edge cases that trip up property owners.
Exemption 1: The 10-Unit Rule
The most commonly discussed exemption is the 10-unit rule. If an owner holds 10 or fewer residential rental units statewide, all of those units are exempt from Good Cause Eviction.
How to Count Your Units
This is where most landlords get confused. The count is based on:
- Statewide total — Every residential rental unit you own anywhere in New York State counts, not just units in a single building or municipality
- Beneficial ownership — Units held through LLCs, partnerships, trusts, and other entities are attributed to the beneficial owner(s)
- Related entities — If you and a family member co-own properties through different LLCs but control them together, those units may be aggregated
Examples
| Scenario | Total Units | Exempt? |
|---|---|---|
| You own a 6-unit building in Queens | 6 | Yes — under 10 |
| You own a 4-unit in Brooklyn + 3-unit in Bronx | 7 | Yes — under 10 |
| You own a 6-unit in Queens + 5-unit in Albany | 11 | No — over 10 |
| Your LLC owns 4 units; your spouse’s LLC owns 4 units (same beneficial ownership) | 8 | Yes — under 10 (combined) |
| Your LLC owns 6 units; an unrelated partner’s LLC owns 6 units | Depends | Depends on beneficial ownership analysis |
The LLC Ownership Question
Many landlords hold properties through LLCs for liability protection. Under GCE, the law looks through the LLC to the beneficial owner. If you are the sole or controlling member of multiple LLCs, units across all those LLCs are counted together.
The law does not provide bright-line rules for every ownership structure. If you have a complex multi-entity portfolio, consult a real estate attorney to determine your unit count for GCE purposes.
What Counts as a “Unit”?
The law counts residential rental units. This includes:
- Traditional apartments in multi-family buildings
- Accessory dwelling units (ADUs) that are rented out
- Single-family homes that are rented (each house = 1 unit)
It does not include:
- Commercial units (storefronts, offices) in mixed-use buildings
- Units you occupy as your own residence
- Vacant units that are not on the rental market
Exemption 2: The 245% Fair Market Rent Threshold
Individual units where the rent equals or exceeds 245% of the HUD Fair Market Rent (FMR) for the applicable county and unit size are exempt from Good Cause Eviction. This exemption is evaluated on a unit-by-unit basis.
2024 FMR Thresholds at 245% (Selected NY Counties)
| County | Studio (245%) | 1-BR (245%) | 2-BR (245%) | 3-BR (245%) | 4-BR (245%) |
|---|---|---|---|---|---|
| New York (Manhattan) | $4,655 | $4,753 | $5,317 | $6,748 | $7,252 |
| Kings (Brooklyn) | $4,655 | $4,753 | $5,317 | $6,748 | $7,252 |
| Queens | $4,655 | $4,753 | $5,317 | $6,748 | $7,252 |
| Bronx | $4,655 | $4,753 | $5,317 | $6,748 | $7,252 |
| Richmond (Staten Island) | $4,655 | $4,753 | $5,317 | $6,748 | $7,252 |
| Westchester | $4,655 | $4,753 | $5,317 | $6,748 | $7,252 |
| Nassau | $4,655 | $4,753 | $5,317 | $6,748 | $7,252 |
| Suffolk | $4,312 | $4,459 | $5,390 | $6,958 | $7,840 |
| Albany | $2,254 | $2,450 | $2,989 | $3,724 | $4,116 |
| Monroe (Rochester) | $2,303 | $2,450 | $3,038 | $3,871 | $4,312 |
| Onondaga (Syracuse) | $2,058 | $2,254 | $2,793 | $3,528 | $3,920 |
| Dutchess | $3,185 | $3,381 | $4,116 | $5,145 | $5,733 |
| Ulster | $2,744 | $2,842 | $3,528 | $4,508 | $4,949 |
| Orange | $3,087 | $3,332 | $4,067 | $5,047 | $5,586 |
| Tompkins (Ithaca) | $2,548 | $2,695 | $3,234 | $4,116 | $4,753 |
Note: FMR values are updated annually by HUD. The values above are based on the most recent published FMR data. Always verify current thresholds before making compliance decisions. Use our NY Good Cause Calculator for up-to-date thresholds.
How to Use the FMR Threshold
Compare your unit’s current rent to the 245% FMR for the appropriate county and bedroom count. If your rent meets or exceeds the threshold, the unit is exempt from GCE.
Important considerations:
- The threshold is evaluated at the time of the lease renewal or proposed rent increase
- If you raise rent above the FMR threshold during a tenancy, the unit becomes exempt going forward
- If FMR increases and your rent drops below 245%, the unit could become covered again
- The exemption applies per unit, not per building — you could have both covered and exempt units in the same building
Who This Exemption Helps
The 245% FMR threshold primarily benefits landlords with luxury or high-rent apartments, particularly in:
- Manhattan (where many market-rate apartments exceed the threshold)
- Brooklyn brownstone neighborhoods (Cobble Hill, Carroll Gardens, Park Slope)
- Newer luxury buildings with high starting rents
In upstate cities like Albany, Rochester, and Syracuse, the thresholds are much lower, meaning more units will be covered by GCE even at moderate rent levels.
Exemption 3: New Construction (30-Year Window)
Buildings that received their first Certificate of Occupancy (CoO) less than 30 years ago are exempt from Good Cause Eviction. This is designed to avoid discouraging new housing construction.
Key Details
- The 30-year clock starts from the original Certificate of Occupancy, not from any subsequent alteration or renovation
- A gut renovation of an existing building does not restart the clock unless the building receives a new initial Certificate of Occupancy
- If your building’s CoO was issued in 2000, the exemption runs until 2030
- If your building’s CoO was issued in 1990, the exemption expired in 2020 and GCE now applies
Why 30 Years?
The 30-year window mirrors the new construction exemption in New York City’s rent stabilization system. The theory is that developers need certainty of rental income to justify construction financing, and a 30-year window provides that certainty while eventually bringing the building under tenant protections.
Exemption 4: Owner-Occupied Buildings Under 10 Units
If the owner occupies a unit in the building as their primary residence and the building has fewer than 10 units, the entire building is exempt from Good Cause Eviction.
Requirements
- The owner must actually live in the building as their primary residence — not just maintain a mailing address there
- The building must have fewer than 10 residential units total
- This exemption applies to the building, not to the owner’s total portfolio — so you could own more than 10 units total but still have this exemption for the building where you live
Common Scenarios
| Scenario | Exempt? |
|---|---|
| You live in your 3-family house and rent out 2 units | Yes |
| You live in a 12-unit building you own | No — 10+ units |
| You own a 6-unit building but live elsewhere | Not under this exemption (check 10-unit rule) |
| Your LLC owns the building and you live in it (under 10 units) | Yes, if you are the beneficial owner of the LLC |
Exemption 5: Condominiums and Cooperatives
Individually owned condominium units and cooperative apartments are exempt from Good Cause Eviction. This applies to the individual unit owner, not to the building as a whole.
If a condo owner rents out their unit, GCE does not apply to that rental. The theory is that condo and co-op owners are individual homeowners, not commercial landlords, and the law was designed to regulate commercial rental operations.
Exemption 6: Already Regulated Units
Units already subject to one of the following regulatory systems are exempt from GCE:
- Rent stabilization (NYC and ETPA municipalities)
- Rent control (the older, pre-1971 system)
- Mitchell-Lama housing
- LIHTC (Low-Income Housing Tax Credit) projects
- Section 8 project-based contracts
- HUD-regulated housing
- Other regulatory agreements that include tenant protections
The rationale is simple: these units already have their own rent increase caps and eviction protections. Layering GCE on top would create conflicting regulatory requirements.
For a comparison of rent stabilization and GCE protections, see our guide on Rent Stabilization vs Good Cause Eviction.
Edge Cases and Complications
Mixed Buildings
A building can have both GCE-covered and exempt units. For example, a 20-unit building where 5 units are rent-stabilized and 15 are market-rate: the stabilized units are exempt from GCE (they have their own protections), while the market-rate units are subject to GCE (assuming no other exemption applies).
LLC Structures and Beneficial Ownership
The law’s focus on beneficial ownership creates complexity for landlords who use multiple LLCs. Key questions that remain subject to interpretation:
- If two unrelated individuals each own 50% of an LLC that holds 8 units, and each also personally owns 4 units, what is each person’s unit count? The answer likely depends on whether the LLC units are attributed to both members (giving each 12 units) or split proportionally (giving each 8 total).
- If a parent and adult child each own separate LLCs, are their units aggregated? Only if they are deemed to have common beneficial ownership or control.
These questions do not have definitive answers yet. As GCE litigation develops, courts will provide guidance. In the meantime, landlords with complex ownership structures should err on the side of compliance or seek legal counsel.
Properties Straddling the 10-Unit Threshold
If you currently own 10 units and acquire one more, all 11 units become subject to GCE (assuming no other exemption applies). Conversely, if you sell a property and drop to 10 or fewer units, the remaining units become exempt.
This creates a practical consideration for portfolio growth: acquiring the 11th unit has regulatory implications beyond the new property itself.
FMR Fluctuations
Because the 245% FMR threshold changes annually with HUD’s FMR publication, a unit that is exempt this year could become covered next year if FMR increases faster than the unit’s rent. Landlords relying on this exemption should track FMR annually.
“The 10-unit rule sounds simple, but it is not. The statewide count, beneficial ownership lookthrough, and LLC aggregation questions make this the most complex exemption in the Good Cause Eviction law. If you are anywhere near the threshold, get a definitive legal opinion before assuming you are exempt.”
— Rachid Abadli, Founder & CEO at LeaseBase
How to Determine Your GCE Status
Follow this decision tree for each property:
- Is the unit rent-stabilized, rent-controlled, or under another regulatory agreement? If yes → Exempt from GCE.
- Is the building new construction (CoO less than 30 years old)? If yes → Exempt from GCE.
- Is the unit a condo or co-op? If yes → Exempt from GCE.
- Does the owner occupy the building and is it under 10 units? If yes → Exempt from GCE.
- Does the owner hold 10 or fewer residential rental units statewide? If yes → Exempt from GCE.
- Does the unit’s rent equal or exceed 245% of FMR? If yes → Exempt from GCE.
- Is the property in NYC or an opt-in municipality? If yes → GCE applies. If no → GCE does not apply (regardless of exemptions).
Use our NY Good Cause Calculator to run through this analysis automatically for your properties.
Frequently Asked Questions
Does the 10-unit count include units in other states?
No. The 10-unit count is for residential rental units in New York State only. Properties you own in other states do not count.
If I own 10 units and sell one, am I immediately exempt?
Yes. Once your statewide unit count drops to 10 or fewer, the remaining units become exempt from GCE (assuming no other exemption already applies or doesn’t apply).
Does a vacant unit count toward the 10-unit threshold?
If the unit is a residential rental unit that is temporarily vacant (between tenants), it likely counts. If the unit has been permanently withdrawn from the rental market, it may not count. The law does not provide explicit guidance on this point.
My building has commercial units on the ground floor. Do those count?
No. Only residential rental units count toward the 10-unit threshold. Commercial spaces are excluded.
I am a condo owner who rents out my unit. Does GCE apply?
No. Individually owned condominium units are exempt from Good Cause Eviction, regardless of whether the owner rents them out.
What if my rent is just under the 245% FMR threshold?
If your rent is below 245% of FMR, the unit is not exempt under this provision. However, you may raise rent to above the threshold (subject to GCE’s rent increase reasonableness standard if the unit is currently covered), at which point the unit would become exempt for future lease renewals.
Track Your Exemption Status Automatically
GCE exemption status is not static. Unit counts change as you buy or sell properties. FMR thresholds change annually. New construction exemptions expire after 30 years. What is exempt today may not be exempt next year.
LeaseBase’s NY Good Cause Calculator evaluates every exemption for each of your properties, using current FMR data and your actual unit count. You always know which units are covered and which are exempt — and you get alerted when a status change is approaching.