senate Bill S5465A

Authorizes the commissioner of housing preservation and development for the city of New York to bring a special proceeding for appointment of an administrator for distressed property

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 16 / May / 2013
    • REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 17 / Jun / 2013
    • AMEND AND RECOMMIT TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 17 / Jun / 2013
    • PRINT NUMBER 5465A
  • 21 / Jun / 2013
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 21 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1654
  • 21 / Jun / 2013
    • SUBSTITUTED BY A7834B

Summary

Authorizes the commissioner of housing preservation and development for the city of New York to bring a special proceeding for appointment of an administrator for distressed property; provides for owner liability for costs of operating property and costs of the administrator after the administrator takes over management of the property.

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Bill Details

See Assembly Version of this Bill:
A7834B
Versions:
S5465
S5465A
Legislative Cycle:
2013-2014
Law Section:
Real Property Actions and Proceedings Law
Laws Affected:
Amd §§770 & 778, RPAP L

Sponsor Memo

BILL NUMBER:S5465A

TITLE OF BILL: An act to amend the real property actions and
proceedings law, in relation to grounds for bringing a special
proceeding, and payment to and liability of administrators appointed
pursuant to a special proceeding

PURPOSE: The purpose of this bill is to amends Section 770 and 778 of
Article 7-A of the Real Property Actions and Proceedings Law (RAPL),
relating to the appointment of an administrator for distressed
property through a special proceeding.

SUMMARY OF PROVISIONS:

Section 1 adds the issuance of an order by the Commissioner of the New
York City Department of Housing Preservation and Development ("HPD")
pursuant to Administrative Code § 27-2153 as a basis for bringing a
special proceeding to appoint an administrator.

This section also adds the existence of any municipal arrears or lien
on the property as a basis for HPD to bring an Article 7P.
proceeding. New York City Administrative Code § 27-2153 sets forth the
City's Alternative Enforcement Program ("AEP"), which empowers fin to
designate certain poorly maintained properties as candidates for
special enforcement treatment. Under the AEP, if an owner fails to
comply with a directive to repair violations, HPD may issue an order
and file it against the property, requiring that significant repair
work be performed. If an owner fails to do the work, HPD ensures that
such work is performed, and the cost of the work and program fees
become a lien against the property.

Section 2 clarifies that the court may authorize an administrator to
lease all or any part of the premises that he or she administers. It
also requires an owner to pay or enter into a payment agreement to pay
all outstanding real property tax liens claimed by NYC, all
outstanding charges of the alternative enforcement program, and all
other liens filed by NYC under RPL Section 778. Finally, it provides
that the administrator can be reimbursed for legal fees incurred in
connection with management of the property.

Section 3 clarifies that even when an administrator is appointed, an
owner remains liable for injury to persons and property as a result of
conditions on the premises.

Section 4 authorizes the bill to take effect immediately.

JUSTIFICATION: When owners of buildings included in the AEP abandon
their buildings, often no one is left in place to manage them. This
causes undue hardship and confusion for existing tenants, in addition
to allowing buildings to fall into disrepair. While the City steps in
to repair such buildings, there is still a need for a day-to-day
manager or administrator. This legislation provides two additional
grounds for bringing a special proceeding to appoint such an
administrator: an owner's failure to comply with an ASP order, and the
existence of municipal arrears or liens on these buildings.
Appointment of an administrator in these two cases will help ensure


that tenants are provided with essential services, and help prevent
abandonment or further deterioration of such buildings.

The provision related to leasing is important to ensure that buildings
are competently run and able to realize all potential revenue.
Mandating that an owner repay or enter into a payment agreement to
repay all outstanding real property tax liens, all outstanding
emergency repair liens filed and recorded by the City of New York and
outstanding liens filed and recorded by the City pursuant to this
section before the administrator is discharged ensures that the owner
is financially capable of keeping the building in sound condition and
reimburses the City for rehabilitating the building. The provisions
related to administrator liability address a continuing issue where
administrators must defend themselves in litigation which should
properly be brought against an owner. These provisions provide for
reimbursement of the administrator for legal fees incurred in such
proceedings, and clarify that the owner is still liable for injury to
persons or property due to conditions on the premises.

Accordingly, the Mayor urges the earliest possible favorable
consideration of this proposal by the Legislature.

LEGISLATIVE HISTORY: New Bill.

FISCAL IMPLICATIONS:Mone.

EFFECTIVE DATE: This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5465--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Housing, Construction  and
  Community  Development  -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the  real  property  actions  and  proceedings  law,  in
  relation  to grounds for bringing a special proceeding, and payment to
  and liability  of  administrators  appointed  pursuant  to  a  special
  proceeding

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 1 of section 770 of the real  property  actions
and  proceedings  law, as amended by chapter 877 of the laws of 1982, is
amended to read as follows:
  1. One-third or more of the tenants occupying a  dwelling  located  in
the  city  of New York or the commissioner of the department of the city
of New York charged with enforcement of the housing maintenance code  of
such city, or in the counties of Nassau, Suffolk, Rockland and Westches-
ter  may maintain a special proceeding as provided in this article, upon
the ground that there exists in such dwellings or in any part thereof  a
lack  of  heat  or  of running water or of light or of electricity or of
adequate sewage disposal facilities, or any other condition dangerous to
life, health or safety, which has existed for five days, or an  infesta-
tion  by  rodents,  or  any combination of such conditions; or course of
conduct by the owner or [his] THE OWNER'S agents of harassment,  illegal
eviction,  continued  deprivation of services or other acts dangerous to
life, health or safety, OR THE ISSUANCE OF AN ORDER TO THE OWNER OF SUCH
DWELLING BY THE COMMISSIONER OF SUCH DEPARTMENT OF THE CITY OF NEW  YORK
PURSUANT TO THE ALTERNATIVE ENFORCEMENT PROGRAM UNDER SECTION 27-2153 OF
THE  ADMINISTRATIVE  CODE  OF  THE  CITY OF NEW YORK, PROVIDED THAT SUCH
DWELLING HAS NOT BEEN DISCHARGED  FROM  THE  PROGRAM  PURSUANT  TO  SUCH

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10829-07-3

S. 5465--A                          2

SECTION  AND  THERE  HAS  NOT  BEEN  A  DETERMINATION THAT THE OWNER HAS
SUBSTANTIALLY COMPLIED WITH SUCH ORDER.
  S  2.  Subdivision  1  of section 778 of the real property actions and
proceedings law, as amended by chapter  95  of  the  laws  of  1989,  is
amended to read as follows:
  1. The court is authorized and empowered, in implementation of a judg-
ment  rendered  pursuant  to  section seven hundred seventy-six or seven
hundred seventy-seven of this article, to appoint a  person  other  than
the  owner,  a  mortgagee  or lienor, to receive and administer the rent
moneys or security deposited with [him] SUCH OWNER, MORTGAGEE OR LIENOR,
subject to the court's direction. The court may appoint the commissioner
of the department of the city of New York charged  with  enforcement  of
the  housing  maintenance  code of such city or [his] THE COMMISSIONER'S
designee as such administrator, provided that [he] THE  COMMISSIONER  OR
THE  COMMISSIONER'S DESIGNEE shall consent, in writing, to such appoint-
ment. Any administrator is authorized and empowered in  accordance  with
the  direction of the court, to order the necessary materials, labor and
services to remove or remedy the conditions specified in  the  judgment,
and to make disbursements in payment thereof; and to demand, collect and
receive the rents from the tenants; and to institute all necessary legal
proceedings  including,  but not limited to, summary proceedings for the
removal of any tenant or tenants; and to rent or  lease  for  terms  not
exceeding  three years any part of said premises, however, the court may
direct the administrator to rent or lease commercial parts of said prem-
ises for terms that the court may approve. In addition, such administra-
tor is authorized and empowered in accordance with the direction of  the
court  to  accept  and  repay  such  moneys  as may be received from the
department charged with enforcement of the housing maintenance  code  of
the city of New York for the purpose of replacing or substantially reha-
bilitating  systems  or  making  other  repairs  or capital improvements
authorized by the court. All moneys expended by the department  pursuant
to  the foregoing shall constitute a debt recoverable from the owner and
a lien upon the building and lot, and upon the rents  and  other  income
thereof.  Such  lien shall be enforced in accordance with the provisions
of article eight of subchapter five of the housing maintenance  code  of
the  city of New York. Such administrator, shall, upon completion of the
work prescribed in such judgment, file with the court a full  accounting
of all receipts and expenditures for such work. Such administrator shall
dispose of the rents and other monies deposited with [him] SUCH ADMINIS-
TRATOR according to the following order of priority:
  (a)  Payment  in  full  for all of the work specified in the judgment.
Until all of the work specified in the judgment has been  completed  and
payment  for  such  work  has been made, no other disbursements shall be
permitted, except for fuel bills,  fire  and  liability  insurance,  and
bills for ordinary repairs and maintenance.
  (b)  Payment  of a reasonable amount for the services of such adminis-
trator, INCLUDING REIMBURSEMENT OF  ANY  LEGAL  FEES  INCURRED  BY  SUCH
ADMINISTRATOR IN CONNECTION WITH MANAGEMENT OF THE BUILDING.
  (c) Payment of outstanding real property tax liens claimed by the city
of New York.
  (d)  Payment  of outstanding emergency repair liens filed and recorded
by the city of New York and outstanding liens filed and recorded by  the
city pursuant to this section.
  (e)  Payment  to  the owner of any surplus remaining after payments of
paragraphs (a) through (d) of this subdivision have been made.

S. 5465--A                          3

  S 3. Subdivision 6 of section 778 of the  real  property  actions  and
proceedings law, as added by chapter 877 of the laws of 1982, is amended
to read as follows:
  6.  Such  administrator  shall  be  liable only in his OR HER official
capacity for injury to persons and property by reason of  conditions  of
the  premises in a case where an owner would have been liable; he OR SHE
shall not have any liability in his OR HER personal  capacity.  APPOINT-
MENT  OF  AN  ADMINISTRATOR  PURSUANT TO SUBDIVISION ONE OF THIS SECTION
SHALL NOT RELIEVE AN OWNER OF LIABILITY FOR INJURY TO PERSONS AND  PROP-
ERTY IN SUCH CASE.
  S  4.  Section 778 of the real property actions and proceedings law is
amended by adding a new subdivision 11 to read as follows:
  11. THE COURT MAY ONLY DISCHARGE AN ADMINISTRATOR  IF  THE  OWNER  HAS
PAID  IN  FULL  OR  ENTERED  INTO A PAYMENT AGREEMENT TO PAY IN FULL ALL
OUTSTANDING REAL PROPERTY TAX LIENS CLAIMED BY THE CITY OF NEW YORK, ALL
OUTSTANDING EMERGENCY REPAIR LIENS FILED AND RECORDED BY THE CITY OF NEW
YORK, ALL OUTSTANDING CHARGES AND LIENS ASSESSED IN  CONNECTION  TO  THE
ALTERNATIVE  ENFORCEMENT  PROGRAM  AUTHORIZED  BY SECTION 27-2153 OF THE
ADMINISTRATIVE CODE OF THE CITY OF NEW YORK, AND OUTSTANDING LIENS FILED
AND RECORDED BY THE CITY PURSUANT TO THIS  SECTION.  THE  PROVISIONS  OF
THIS  SUBDIVISION  SHALL  NOT APPLY TO BUILDINGS TRANSFERRED PURSUANT TO
SUBDIVISION TEN OF THIS SECTION.
  S 5. This act shall take effect immediately.

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