S T A T E O F N E W Y O R K
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2009-2010 Regular Sessions
I N A S S E M B L Y
February 13, 2009
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Introduced by M. of A. V. LOPEZ -- read once and referred to the Commit-
tee on Housing
AN ACT to amend the private housing finance law, in relation to estab-
lishing mechanism to transition housing companies conducting a buy-out
to local rent regulations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The private housing finance law is amended by adding a new
section 609-a to read as follows:
S 609-A. BUY-OUT TRANSITION. 1. DEFINITIONS. FOR THE PURPOSES OF THIS
SECTION:
(A) "DIVISION" SHALL MEAN THE DIVISION OF HOUSING AND COMMUNITY
RENEWAL.
(B) "RENT LAWS" SHALL MEAN THE EMERGENCY HOUSING RENT CONTROL LAW, THE
EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR, THE LOCAL
EMERGENCY HOUSING RENT CONTROL ACT, AND THE RENT STABILIZATION LAW OF
NINETEEN HUNDRED SIXTY-NINE.
(C) "BUY-OUT" SHALL MEAN AN EVENT WHICH CAUSES HOUSING COMPANIES WHICH
ARE REGULATED ON THE EFFECTIVE DATE OF THIS SECTION PURSUANT TO FEDERAL,
STATE OR MUNICIPAL LAWS OTHER THAN THE RENT LAWS, TO CEASE BEING COVERED
BY SUCH REGULATION INCLUDING BUT NOT LIMITED TO VOLUNTARY DISSOLUTION OR
RECONSTITUTION.
(D) "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 BUY-OUT. WHERE THE CAUSE OF THE
BUY-OUT IS DISSOLUTION OR RECONSTITUTION UNDER THIS CHAPTER OR THE BUSI-
NESS CORPORATION LAW THE BUY-OUT OCCURS ON THE DATE THE SECRETARY OF
STATE ACCEPTS THE CERTIFICATE OF DISSOLUTION OR THE AMENDED CERTIFICATE
OF INCORPORATION FOR FILING.
2. REGISTRATION. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY,
ANY HOUSING ACCOMMODATION WHICH BECOMES SUBJECT TO THE PROVISIONS OF ANY
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08387-01-9
A. 5555 2
OF THE RENT LAWS BY REASON OF A BUY-OUT SHALL BE REGISTERED WITH THE
DIVISION NINETY DAYS PRIOR TO THE ANTICIPATED BASE DATE. SUCH REGISTRA-
TION SHALL BECOME EFFECTIVE ON THE BASE DATE, PROVIDED HOWEVER, A CHAL-
LENGE TO SUCH REGISTRATION MAY BE FILED ANY TIME BETWEEN THE DATE SUCH
REGISTRATION IS REQUIRED TO BE FILED AND NINETY DAYS AFTER THE ACTUAL
BASE DATE. IN NO EVENT SHALL SUCH PERIOD DURING WHICH A CHALLENGE MAY BE
FILED BE LESS THAN ONE HUNDRED EIGHTY DAYS FROM THE DATE THAT THE REGIS-
TRATION IS SERVED UPON THE TENANT.
3. INITIAL REGISTERED RENT. THE INITIAL REGISTERED RENT SHALL BE AS
FOLLOWS:
(A) FOR APARTMENTS OCCUPIED ON THE BASE DATE THE INITIAL LEGAL REGIS-
TERED RENT SHALL BE THE RENT CHARGED TO AND PAID BY THE TENANT IN OCCU-
PANCY ON THE BASE DATE. INCOME-RELATED SURCHARGES WHICH WERE COLLECTIBLE
FROM A TENANT ON THE BASE DATE WILL BE INCLUDED AS PART OF THE BASE RENT
FOR THAT TENANT AND SUBSEQUENT TENANTS OF THE SAME APARTMENT.
(B) FOR APARTMENTS VACANT ON THE BASE DATE, THE INITIAL LEGAL REGIS-
TERED RENT SHALL BE THE RENT CHARGED TO AND PAID BY THE MOST RECENT
TENANT, IN ADDITION TO RENTAL SUBSIDIES, BUT EXCLUDING SURCHARGES, IF
ANY. INCOME RELATED SURCHARGES WHICH MAY HAVE BEEN PAID BY THE MOST
RECENT TENANT WILL NOT BE INCLUDED IN THE INITIAL LEGAL REGISTERED RENT.
UPON RENTING, THE INITIAL LEGAL REGISTERED RENT SHALL BE SUBJECT TO
VACANCY AND GUIDELINE INCREASES AS WELL AS ANY APPLICABLE ADJUSTMENT
PURSUANT TO APPLICABLE RENT LAWS.
(C) UNITS SUBJECT TO OCCUPANCY OR RENT RESTRICTIONS. FOR UNITS SUBJECT
TO OCCUPANCY OR RENT RESTRICTIONS (SUCH AS UNITS REQUIRED TO BE RENTED
TO QUALIFIED LOW, MODERATE OR MIDDLE INCOME TENANTS) ON THE BASE DATE:
(1) WHERE THE TENANT IS PARTICIPATING IN THE SENIOR CITIZEN RENT
INCREASE EXEMPTION PROGRAM PURSUANT TO SECTION FOUR HUNDRED SIXTY-SEV-
EN-B OF THE REAL PROPERTY TAX LAW THE OWNER MAY REGISTER THE FULL LEGAL
REGULATED RENT CHARGED; AND
(2) WHERE THE OWNER RECEIVES CAPITAL GRANT OR SECTION 8 RENTAL SUBSI-
DIES ON BEHALF OF THE TENANT, THE OWNER MAY BE PERMITTED TO REGISTER
HIGHER AND LOWER INITIAL LEGAL REGISTERED RENTS (REPRESENTING THE FULL
LEGAL REGULATED RENT AND THE FULL LEGAL REGULATED RENT MINUS THE CAPITAL
GRANT OR OTHER RENTAL SUBSIDY, RESPECTIVELY) PURSUANT TO AN AGREEMENT
ENTERED INTO BETWEEN THE PRIOR REGULATING AGENCY AND THE DIVISION, AS
SET FORTH IN AN ORDER PERMITTING THE REGISTRATION OF MULTI-TIER INITIAL
LEGAL RENTS. THE ORDER SHALL ALSO SET FORTH THE CONDITIONS UNDER WHICH
THE OWNER MAY COLLECT THE HIGHER AND LOWER REGULATED RENTS AS DETERMINED
BY THE PRIOR REGULATING AGENCY.
WHEN A RENTAL SUBSIDY IS TERMINATED EITHER UPON OR AFTER THE BUY-OUT,
THE OWNER SHALL BE ENTITLED TO COLLECT AS RENT FROM THE TENANT IN OCCU-
PANCY ON THE BASE DATE AN AMOUNT EQUIVALENT TO THAT PORTION OF THE RENT
PAID BY SUCH TENANT, NOT INCLUDING THE SUBSIDY.
(D) ADDITIONAL CHARGES FOR ELECTRICITY FOR APPLIANCES SUCH AS AIR
CONDITIONING, WASHER/DRYERS AND DISHWASHERS WILL BE INCLUDED IN THE
REGISTERED BASE RENT AT THE RATE CHARGED AND PAID ON THE BASE DATE. FOR
SUCH APPLIANCES BROUGHT INTO AN APARTMENT SUBSEQUENT TO THE BASE DATE,
THE OWNER MAY BE PERMITTED AN ADDITIONAL CHARGE PURSUANT TO REGULATIONS
PROMULGATED BY THE DIVISION WHICH WILL NOT BECOME PART OF THE BASE RENT.
(E) GARAGE AND OTHER ANCILLARY SERVICES FOR WHICH THERE IS A LEGAL
REGULATED SEPARATE PERMANENT CHARGE MUST BE REGISTERED AT THE AMOUNT
PAID ON THE BASE DATE. ANY INCREASE, OTHER THAN THE CHARGE PROVIDED IN
THE INITIAL AGREEMENT WITH A TENANT TO LEASE SUCH SERVICE SUBSEQUENT TO
THE BASE DATE, SHALL CONFORM TO THE APPLICABLE RENT GUIDELINES RATE.
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4. LEASES. (A) (1) THE LEASES IN EFFECT UNDER THE VARIOUS FEDERAL,
STATE AND MUNICIPAL PROGRAMS ON THE BASE DATE SHALL REMAIN IN FORCE
PURSUANT TO THE PROVISIONS THEREOF, EXCEPT THAT THOSE PROVISIONS WHICH
ARE INCONSISTENT WITH THE RENT LAWS SHALL BE VOID AND UNENFORCEABLE.
(2) WHERE SUCH LEASES ARE SO INCONSISTENT AS TO RENDER THEM INEFFEC-
TIVE IN DEFINING THE RIGHTS AND DUTIES OF TENANTS AND OWNERS, THEN
EITHER THE FEDERAL, STATE OR MUNICIPAL SUPERVISING AGENCY AS A CONDITION
OF THE BUY-OUT, OR DIVISION AFTER THE BUY-OUT, MAY ORDER THE PROVISION
OF NEW LEASES, FOR THE UNEXPIRED TERM AND AT THE SAME RENT AS THE LEASE
TO BE REPLACED. THE PROFFERED LEASE SHALL BE ON THE SAME TERMS AND
CONDITIONS AS THE REPLACED LEASE BUT SHALL ELIMINATE THOSE TERMS AND
CONDITIONS WHICH ARE INCONSISTENT WITH THE RENT LAWS AND THOSE WHICH
REQUIRE ADJUDICATIONS BY THE PRIOR FEDERAL, STATE OR MUNICIPAL SUPERVIS-
ING AGENCY.
(B) (1) WHERE THE LEASE IN EFFECT PRIOR TO THE BUY-OUT DID NOT
COMMENCE UPON THE ANNIVERSARY DATE OF THE TENANCY, THE TENANT SHALL HAVE
THE OPTION OF SUBSTITUTING THE ANNIVERSARY DATE OF THE TENANCY AS THE
COMMENCEMENT DATE OF SUCH LEASE. WHERE THERE WAS NO LEASE IN EFFECT UPON
BUY-OUT, THE OWNER SHALL OFFER AND THE TENANT SHALL HAVE THE OPTION OF
ACCEPTING A LEASE COMMENCING EITHER ON THE DATE FOLLOWING THE EXPIRATION
DATE OF THE LAST LEASE OR ON THE ANNIVERSARY DATE OF THE TENANCY.
(2) THE TERM OF A LEASE OFFERED PURSUANT TO THIS SECTION SHALL BE: FOR
A THREE YEAR TERM OR SUCH OTHER TERM AS WAS REQUIRED PRIOR TO THE
BUY-OUT, COMMENCING, AT THE TENANT'S OPTION, EITHER UPON THE ANNIVERSARY
DATE OF THE INITIAL LEASE, OR THE RENEWAL DATE OF THE MOST RECENT LEASE.
(3) THE TENANT, WITHIN SIXTY DAYS AFTER THE OWNER'S OFFER, MUST CHOOSE
THE TERM OF THE LEASE, SIGN THE LEASE OFFER AND RETURN IT TO THE OWNER,
WHO MUST RETURN A FULLY EXECUTED COPY TO THE TENANT WITHIN THIRTY DAYS.
THE NEW LEASE SHALL BE AT THE SAME RENTAL AMOUNT AS THE RENT PAID BY THE
TENANT ON THE BASE DATE.
(C) FOR BUILDINGS LOCATED IN THE CITY OF NEW YORK, A COPY OF THE RIDER
REQUIRED PURSUANT TO THE RENT STABILIZATION LAW SHALL BE SERVED UPON
EACH TENANT IN OCCUPANCY OF A HOUSING ACCOMMODATION PRIOR TO ANY PUBLIC
INFORMATION MEETING REQUIRED BY THE PRIOR SUPERVISORY AGENCY AND WHERE
NO SUCH MEETING IS REQUIRED, NO LATER THAN THE BASE DATE, THEREAFTER
SUCH RIDER SHALL BE SERVED UPON EACH TENANT OR SUBSEQUENT TENANT SIGNING
A VACANCY OR RENEWAL LEASE.
(D) (1) RENEWAL OF A LEASE WHICH EXPIRES AFTER THE BASE DATE SHALL BE
PURSUANT TO PROVISIONS OF THE APPLICABLE RENT LAWS.
(2) ANY RENEWAL OF A LEASE EXPIRING AFTER THE BASE DATE BUT SOONER
THAN THE TIME PERIOD PROVIDED FOR IN APPLICABLE RENT LAWS FOR A TENANT
TO RESPOND TO A LEASE RENEWAL OFFER (WINDOW PERIOD) SHALL NOT COMMENCE
UNTIL THE TENANT HAS RECEIVED THE REQUIRED WINDOW PERIOD NOTICE.
(3) IN THE CASE WHEN THE EXPIRATION DATE OF THE LEASE WILL NOT ALLOW
FOR COMPLIANCE WITH SUBPARAGRAPH TWO OF THIS PARAGRAPH, OWNERS SHALL BE
ENTITLED TO SATISFY THE TIME REQUIREMENTS OF SUBPARAGRAPH TWO OF THIS
PARAGRAPH BY OFFERING RENEWAL LEASES WITHIN SUCH WINDOW PERIODS, EVEN
THOUGH THE BASE DATE MAY OCCUR DURING OR AFTER SUCH WINDOW PERIODS.
(4) WHERE IT CANNOT BE DETERMINED WHETHER THE BASE DATE WILL OCCUR
BEFORE OR AFTER THE EXPIRATION DATE OF THE LEASE, OWNERS SHALL BE
PERMITTED TO OFFER RENEWAL LEASE PURSUANT TO THE APPLICABLE RENT LAWS
WITHIN THE APPROPRIATE WINDOW PERIOD, AS WELL AS A RENEWAL OF THE
CURRENT LEASE PURSUANT TO THE REGULATIONS OF THE PRIOR SUPERVISING AGEN-
CY. OWNERS WHO OFFER BOTH LEASES PURSUANT TO THIS PARAGRAPH SHOULD
INCLUDE WITH SUCH OFFER A NOTICE TO THE TENANT EXPLAINING THE FOLLOWING:
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(I) IF THE BASE DATE OCCURS PRIOR TO THE LEASE EXPIRATION DATE, THE
RENT LAW RENEWAL LEASE WILL TAKE EFFECT; AND
(II) IF THE BASE DATE OCCURS AFTER THE LEASE EXPIRATION DATE, THE
RENEWAL OF THE CURRENT LEASE WILL TAKE EFFECT.
5. SERVICES. ALL BUILDING-WIDE AND APARTMENT SERVICES PROVIDED OR
REQUIRED TO HAVE BEEN PROVIDED TO TENANTS ON THE BASE DATE MUST CONTINUE
TO BE PROVIDED. REQUIRED BUILDING-WIDE SERVICES MUST BE REGISTERED
PURSUANT TO APPLICABLE RENT LAWS.
6. NUMBER OF ROOMS. ALTHOUGH THE PRIOR REGULATORY AGENCY MAY HAVE
UTILIZED A DIFFERENT DEFINITION FOR ROOM, FOR RENT LAW PURPOSES, GOING
FORWARD, AND NOT FOR THE PURPOSE OF ADJUSTING THE BASE RENT AS ESTAB-
LISHED BY THE PRIOR REGULATORY AGENCY, THE FOLLOWING ARE COUNTED AS
ROOMS:
(A) ALL ROOMS THAT HAVE NO WINDOWS AND CONTAIN AT LEAST EIGHTY (80)
SQUARE FEET;
(B) WINDOWLESS KITCHENS MEASURING AT LEAST FIFTY-NINE (59) SQUARE
FEET;
(C) ALL ROOMS WHICH HAVE WINDOWS AND CONTAIN AT LEAST SIXTY (60)
SQUARE FEET; AND
(D) BATHROOMS, HALF-ROOMS, WALK-IN CLOSETS AND BALCONIES (WHETHER OR
NOT ENCLOSED) ARE NOT TO BE COUNTED AS ROOMS.
S 2. This act shall take effect immediately.