Assembly Bill A5479

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

                                  5479

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            February 13, 2009
                               ___________

Introduced by M. of A. V. LOPEZ -- read once and referred to the Commit-
  tee on Housing

AN  ACT  in  relation  to establishing legal stabilized and maximum rent
  controlled rents and determination of occupancy rights where a cooper-
  ative or condominium is deconverted

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

  Section 1. The cooperative corporation deconversion rent and occupancy
rights act is added to read as follows:
                  COOPERATIVE CORPORATION DECONVERSION
                      RENT AND OCCUPANCY RIGHTS ACT
Section 1. Short title.
        2. Definitions.
        3. Applicability.
        4. Non-purchasing tenants.
        5. Deconversion  resulting  from  mortgage  foreclosure;  former
             owners and current renters.
        6. Legal stabilized rent for units vacant on the base date.
        7. Cooperative or condominium conversions revoked  retroactively
             by the attorney general on fraud or other grounds.
  Section  1.  Short  title. This act shall be known and may be cited as
the "cooperative corporation  deconversion  rent  and  occupancy  rights
act".
  S 2. Definitions. For the purposes of this act:
  (a)  "Deconversion"  shall  mean  the loss of title to a building by a
cooperative corporation in the event of a foreclosure of the  underlying
mortgage,  or  where  a cooperative or condominium conversion is revoked
retroactively by the attorney general to the date immediately  prior  to
the  effective  date of the conversion plan, on the basis of fraud or on
other grounds.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08713-01-9

              

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  (b) "Conversion plan" shall mean every offering statement or  prospec-
tus  submitted to the department of law pursuant to section 352-e of the
general business law for the conversion of a building or group of build-
ings or development from residential rental  status  to  cooperative  or
condominium  ownership  or other form of cooperative interest in realty,
other than an offering  statement  or  prospectus  for  such  conversion
pursuant to article 2, 8, or 11 of the private housing finance law.
  (c)  "Division"  shall  mean  the  division  of  housing and community
renewal.
  (d) "Rent laws" shall mean the emergency housing rent control law, the
emergency tenant protection act of 1974,  the  local  emergency  housing
rent  control  act,  the  rent control and the rent stabilization law of
1969.
  (e) "Base date" shall mean for the purpose of establishing  the  legal
registered rent and required services under the rent laws the date imme-
diately  preceding  the  date of the deconversion and the restoration of
rent regulation.
  S 3. Applicability.  (a) Upon deconversion, units which  were  subject
to  rent  regulation  prior  to conversion to cooperative or condominium
ownership shall revert to rent regulated status, and remain regulated as
provided for under related rent laws.
  (b) Upon deconversion, units subject to rent regulation  solely  as  a
condition  of  receiving  governmental  benefits shall remain subject to
rent regulation only for such period of time as is required by law or by
the rules of the governmental program.
  S 4.  Non-purchasing  tenants.  Upon  deconversion,  a  non-purchasing
tenant's occupancy rights are as follows:
  (a)  except  as  provided  for under the applicable rent laws, tenants
protected from eviction pursuant to section 352-eee or 352-eeee  of  the
general business law shall retain such protected status.
  (b)  Upon  deconversion,  each non-purchasing tenant's rent, which was
continuously regulated prior to deconversion, shall continue  to  be  so
regulated without any adjustment to the rent.
  S  5.  Deconversion resulting from mortgage foreclosure; former owners
and current renters. (a) Where the unit is occupied by a renter  on  the
base date, the unit's owner's occupancy rights are as follows:
  1. Units in cities with a population of 1,000,000 or more.
  2. Except as provided in paragraph 3 of this subdivision, the owner of
shares  allocated  to a cooperative unit loses all ownership interest in
such unit upon deconversion. The current renter,  although  not  a  rent
regulated  tenant at the time of initial occupancy, shall be entitled to
remain in occupancy upon deconversion as a rent regulated tenant.
  3. Where the owner occupies the unit as a primary residence at the end
of the current renter's lease, the owner shall not be required to  offer
a renewal lease to such renter, and will become a regulated tenant under
the following conditions:
  a.  such  owner  rented the unit for a period of no more than 2 out of
the last 4 years immediately preceding the base date with the  intention
to  occupy  the  unit  as  a primary residence at the end of the current
renter's lease; or
  b. such owner had been in occupancy at any time prior to  the  current
renter,  and  rented  the  unit as a primary residence at the end of the
current renter's lease.
  (b) Units located outside a city with a  population  of  1,000,000  or
more.

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  1.  Upon  deconversion the following types of renters shall qualify as
rent-regulated tenants and are entitled to remain in occupancy:
  a. subsequent renters in occupancy on July 1, 1993;
  b. non-purchasing tenants; and
  c. subsequent renters not in occupancy on July 7, 1993 but in occupan-
cy upon deconversion.
  2.  a.  Except as provided in this paragraph the owner of shares allo-
cated to a cooperative unit loses ownership interest in such  unit,  the
owner  loses  any  right to occupancy as against a current renter not in
occupancy on July 7, 1993.
  b. The former proprietary lessee-owner  shall  be  permitted  to  take
occupancy  of  a unit as a regulated tenant where the renter is in occu-
pancy pursuant to a sub-lease from the former  proprietary  lessee-owner
at the expiration of the term of the sublease under the following condi-
tions:
  (1)  the unit had not been sublet for a period of more than two out of
the last four years immediately preceding the base date; and
  (2) the owner occupies the unit as a primary residence upon expiration
of the sublease, and intended to do so when executing the sublease.
  (c) The legal stabilized rent shall be as follows:
  1. For units located in a city with a population of 1,000,000 or more,
the legal stabilized rent shall be the rent charged and paid on the base
date, and where such rent was previously  regulated  under  the  private
housing  finance  law or other state or federal law, other than the rent
laws, upon the termination of such regulation the legal stabilized  rent
shall be the rent paid by the tenant in occupancy on the date such regu-
lation ended.
  2.  For  units  outside a city with a population of 1,000,000 or more,
the legal stabilized rent for  non-purchasing  tenants,  and  subsequent
renters  in  occupancy  on  July  7,  1993,  shall be the regulated rent
charged and paid by such  tenants  on  the  base  date.  For  subsequent
renters  not  in  occupancy  on  July 7, 1993, the legal stabilized rent
shall be the unregulated rent charged and paid by such  tenants  on  the
base date.
  (d)  1.  Where  the unit is occupied by the cooperative shareholder on
the base date, the owner's occupancy rights  upon  deconversion  are  as
follows:
  a.  a  former  owner in occupancy, who was either a rent stabilized or
rent controlled tenant prior to the conversion, shall  regain such prior
regulated status; or
  b. a former owner in occupancy, who was neither a rent controlled  nor
rent  stabilized  tenant  prior  to  the conversion, shall become a rent
stabilized tenant.
  2. The legal stabilized or maximum  rent  controlled  rents  for  such
former  owners  shall  be  the  maintenance charged and paid on the base
date, subject to an order of the division establishing such legal stabi-
lized rent or maximum rent controlled unit where the maintenance charged
and paid on the base date is in dispute, in doubt or not known.
  S 6. Legal stabilized rent for units vacant on the base date. (a)  For
units  in a city with a population of 1,000,000 or more the legal stabi-
lized rent shall be as follows:
  1. For a unit last occupied by a rent controlled tenant,  the  initial
legal  rent shall be, the rent agreed to by the owner and the tenant and
reserved in a lease, subject to a tenant's right to a fair  market  rent
appeal;

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  2.  For  a unit last occupied by a tenant other than a rent controlled
tenant, the initial legal rent shall be the rent charged and paid by the
most recent  tenant,  which  shall  be  subject  to  vacancy  guidelines
increases, but subject to a fair market rent appeal; or
  3.  For a unit last occupied by an owner, and the legal regulated rent
is not known, the legal rent shall be the maintenance charged  and  paid
by  the  most recent owner, which shall be subject to vacancy guidelines
increases but not subject to a fair market rent appeal.
  (b) For units located outside a city with a population of 1,000,000 or
more the legal stabilized rent shall be as follows:
  1. For a unit last occupied by a rent  controlled  tenant,  the  legal
stabilized  rent  shall  be  the  rent agreed to by the landlord and the
tenant and reserved in a lease;
  2. For a unit last occupied by a tenant other than a  rent  controlled
tenant,  the legal stabilized rent shall be the rent charged and paid by
the most recent tenant which shall  be  subject  to  authorized  vacancy
guidelines increases; or
  3.  For a unit last occupied by an owner, and the legal regulated rent
is not known, the legal regulated rent shall be the maintenance  charged
and  paid by the most recent owner, subject to authorized vacancy guide-
lines increases.
  S 7. Cooperative or condominium conversions revoked  retroactively  by
the  attorney  general on fraud or other grounds.  (a) Where the unit is
vacant or occupied by anyone other than a non-purchasing tenant  on  the
base date, the current occupant shall become either a rent stabilized or
a  rent  controlled tenant, depending upon the unit's status immediately
prior to the date of conversion. The former owner  shall  not  have  any
occupancy rights to the unit.
  (b) The legal stabilized rent for such units shall be as follows:
  1.  For units located in a city with a population of 1,000,000 or more
for units subject to rent stabilization prior to conversion, the rent of
any occupant who moved in after the cooperative or  condominium  conver-
sion  plan  became effective, upon deconversion, shall be based upon the
rent charged and paid one day prior to the date that the housing  accom-
modation  first  became  exempt  from  rent regulation, increased by the
division's biennial guidelines increases.
  2. For  units where the occupant is an owner of shares allocated to  a
cooperative  unit,  or  the owner of a condominium unit, but neither the
sponsor nor a holder of unsold shares  or  units,  the  rent  shall  not
exceed the maintenance charged and paid on the base date.
  3.  For  units  vacant  on the base date, the rent may be increased by
vacancy guidelines increases upon rerenting.
  (c) For units located outside a city with a population of 1,000,000 or
more subject to the emergency tenant protection act of 1974,  the  legal
stabilized rent shall be as follows:
  1.  For tenants in occupancy on the base date who were in occupancy on
July 7, 1993, the legal stabilized rent shall be the legal rent  charged
and paid on the base date.
  2.  For  tenants  not  in occupancy on July 7, 1993, the rent shall be
based upon the rent charged and paid one day prior to the date that  the
housing   accommodation   first  became  exempt  from  rent  regulation,
increased by the division's biennial guidelines increases.
  3. For a unit occupied by the former owner or vacant on the base date,
the legal stabilized rent shall be the rent charged and paid by the last
tenant in occupancy, plus any authorized vacancy guidelines adjustment.

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  4. For a former owner who is neither the sponsor nor holder of  unsold
shares,  such  rent shall not exceed the maintenance charged and paid on
the base date.
  (d)  The  maximum  rent  controlled  rent  for  such units shall be as
follows:
  1. For units located in a city with a population of 1,000,000 or more:
  a. For units subject to rent control prior to conversion, the rent  of
the  occupant  who moved in after the cooperative or condominium conver-
sion plan became effective, or for any unit vacant  on  the  base  date,
upon deconversion, shall be based upon the rent charged and paid one day
prior  to  the  date  that such unit first became exempt from rent regu-
lation, increased by seven and one-half percent, as biennially  adjusted
by the city rent agency of the city of New York;
  b. Where the occupant is an owner of shares allocated to a cooperative
unit,  or the owner of a condominium unit, but neither the sponsor nor a
holder of unsold shares or units, the rent shall not exceed the  mainte-
nance charged and paid on the base date.
  2.  For units located outside a city with a population of 1,000,000 or
more:
  a. For units subject to rent control prior to conversion, the rent  of
the occupant who moved in after the conversion plan became effective, or
for  any unit vacant on the base date, upon deconversion, shall be based
upon the rent charged and paid one day prior to the date that such  unit
first  became decontrolled, which may be adjusted by applicable periodic
increases, as may have been authorized by the division pursuant  to  the
emergency housing rent control law.
  b. Where the occupant is an owner of shares allocated to a cooperative
unit,  or the owner of a condominium unit, but neither the sponsor nor a
holder of unsold shares or units, the rent shall not exceed the  mainte-
nance charged and paid on the base date.
  (e)  Overcharge  complaints  shall only be filed with the division for
any rent in excess of the legal or maximum  rent  as  provided  in  this
subdivision  which  may  have  been  collected by a sponsor or holder of
unsold shares or units.
  1. For  rent  stabilized  housing  accommodations,  deemed  guidelines
increases authorized pursuant to this section shall not be considered in
mitigation  of  any  overcharges  found for any period during which such
increases were not registered with the division.
  2. For rent controlled  housing  accommodations,  deemed  biennial  or
periodic  rent adjustments authorized pursuant to this section shall not
be considered in mitigation of any overcharges found.
  S 2. This act shall take effect immediately.