NY State Senate Bill 2009-S5572

Senate Bill S5572

2009-2010 Legislative Session

Provides for the continued occupancy of a property by tenants and owner-occupants during and after foreclosure proceedings

download bill text pdf

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to housing, construction and community development
May 19, 2009	referred to judiciary

2009-S5572 (ACTIVE) - Details

Current Committee:: Senate Housing, Construction And Community Development
Law Section:: Real Property Actions and Proceedings Law
Laws Affected:: Add §1305, RPAP L

2009-S5572 (ACTIVE) - Summary

Provides for the continued occupancy of a property by tenants and owner-occupants during and after foreclosure proceedings.

2009-S5572 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5572

 TITLE OF BILL :
An act to amend the real property actions and proceedings law, in
relation to providing for the continued occupancy of a property by
tenants and owner-occupants during and after foreclosure proceedings


 PURPOSE :
Provides security of tenure for rent paying tenants of properties that
have been foreclosed; stabilizes neighborhoods that contain numerous
foreclosed properties; and prevents homelessness by providing tenants
in foreclosed properties time to find suitable housing.

 SUMMARY OF PROVISIONS :
This bill amends Article 13 of the RPAPL to create section 1305,
covering the right of occupants of foreclosed property.

Subsection 1 defines "tenant in occupancy of the foreclosed property"
and "owner occupant" for purpose of this section.

Subsection 2 protects tenants in foreclosed properties by requiring
entities acquiring title to the property to notify tenants of their
right to remain in occupancy as month-to-month tenants under the same
rent, as well as other terms and conditions, as were in effect at the
time of transfer of title. The tenant has the option to renew the

tenancy for six monthly terms, or to terminate the lease upon thirty
days notice to the owner.

Subsection 3 ensures that this bill does not interfere with existing
rights of tenants not named in the foreclosure action.

Subsection 4 clarifies that, when the property is re-sold prior to the
expiration of the six monthly terms described in subsection 2, the
tenants' right to renew their monthly tenancy during the six month
period is not extinguished. At the end of the six month, period, the
tenant becomes a monthly tenant whose tenancy is governed by RPL
section 232-a (New York City) or RPL section 232-b (outside of New
York City).

Subsection 5 governs the right of owner-occupants to remain in the
property as tenants after a foreclosure, pursuant to subsection 2,
with rents no higher than 110% of the applicable Section 8 Fair Market
Rents as set by the US Department of Housing and Urban Development.

Subsection 6 makes it clear that tenants retain the protections they
already have under existing laws, including the state's rent
regulation laws.

 JUSTIFICATION :
This legislation seeks to address the plight of tenants, who are often
innocent victims of foreclosure proceedings commenced by lending
institutions against homeowners and landlords unable to pay their
mortgages. Most tenants are current in their rent and have done
nothing to deserve displacement from their homes. It also seeks to
provide stability to blocks and communities threatened by
foreclosures, by ensuring that buildings will remain occupied and not
subject to vandalism, deterioration and other conditions that lead to
neighborhood blight.

This bill supplements S-1363C, which passed the Senate in April, in a
number of ways.  It extends protections to tenants of buildings of six
or more units.  Particularly in areas of the state not governed by
rent regulation, large numbers of tenants in multifamily dwellings are
potentially vulnerable to displacement following foreclosure if a bill
such as this is not passed. Secondly, this bill explicitly covers
tenants not named in the foreclosure action and provides them with
security of tenure. This is necessary because most occupants other
than the owners of smaller dwellings are not named in the foreclosure
action.  Thirdly, whereas S1363-C provides tenants who are named in
the foreclosure action with 90 days notice, but no real security of
tenure, this bill allows tenants the option of remaining as
month-to-month tenants, which brings stability to the lives of the
tenants and allows them time to find suitable housing; and contributes
to community stability by reducing the likelihood of abandoned
properties in neighborhoods.

 LEGISLATIVE HISTORY :
None. This is new legislation.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect on the 90th day after it shall have become
a law.

2009-S5572 (ACTIVE) - Bill Text download pdf

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

                                  5572

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              May 19, 2009
                               ___________

Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

AN ACT to amend the  real  property  actions  and  proceedings  law,  in
  relation  to  providing  for  the continued occupancy of a property by
  tenants and owner-occupants during and after foreclosure proceedings

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

  Section 1. The real property actions and proceedings law is amended by
adding a new section 1305 to read as follows:
  S 1305. CONTINUED OCCUPANCY OF TENANTS AND OWNER-OCCUPANTS IN FORECLO-
SURE. 1. AS USED IN THIS SECTION:
  (A)  "TENANT IN OCCUPANCY OF THE FORECLOSED PROPERTY" MEANS ANY PERSON
OR PERSONS WHO, AT THE TIME OF A JUDGMENT OF FORECLOSURE, ARE NAMED ON A
LEASE AS LESSEE OR LESSEES; OR WHO IS OR ARE A PARTY OR  PARTIES  TO  AN
ORAL  OR  IMPLIED RENTAL AGREEMENT AND OBLIGATED TO PAY RENT FOR THE USE
OR OCCUPANCY OF A HOUSING ACCOMMODATION; AND
  (B) "OWNER-OCCUPANT" MEANS ANY FEE OWNER OR MORTGAGOR WHO  RESIDES  IN
THE  MORTGAGED PROPERTY OR A PART THEREOF AS THEIR RESIDENCE AT THE TIME
A JUDGMENT OF FORECLOSURE IS ISSUED.
  2. WHEN OWNERSHIP OF A PROPERTY SUBJECT TO AN  ACTION  IN  FORECLOSURE
UNDER  THIS ARTICLE HAS BEEN TRANSFERRED PURSUANT TO A JUDGMENT OF FORE-
CLOSURE AND SALE UNDER SECTION THIRTEEN HUNDRED FIFTY-ONE OF THIS  ARTI-
CLE,  OR  THROUGH  OTHER DISPOSITION DURING THE PENDENCY OF THE FORECLO-
SURE, THE PERSON OR ENTITY ACQUIRING TITLE SHALL SERVE A NOTICE  ON  ALL
TENANTS  IN  OCCUPANCY  OF THE FORECLOSED PROPERTY, OR ANY PART THEREOF,
THAT THEY ARE ENTITLED TO REMAIN IN OCCUPANCY  AS  MONTHLY  TENANTS,  IN
PRIVITY  WITH THE NEW OWNER, AT THE SAME RENT, AND ON THE SAME TERMS AND
CONDITIONS, AS WERE IN EFFECT PRIOR TO ISSUANCE OF THE JUDGMENT OF FORE-
CLOSURE, OR IN THE ABSENCE OF SUCH JUDGMENT, UPON THE TERMS  AND  CONDI-
TIONS  AS  WERE  IN  EFFECT AT THE TIME OF TRANSFER. THE MONTHLY TENANCY
SHALL COMMENCE ON THE DATE OF THE SERVICE  OF  THE  NOTICE  BY  THE  NEW

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11742-01-9

S. 5572                             2

OWNER,  AND  SHALL CONTINUE FOR SIX CONSECUTIVE MONTHLY TERMS, WITH EACH
SUCH MONTHLY TERM BEING RENEWABLE AT THE OPTION OF THE TENANT. A  TENANT
CHOOSING  NOT  TO  RENEW MAY TERMINATE THE LEASE AT ANY TIME WITHIN THAT
PERIOD BY PROVIDING AT LEAST THIRTY CALENDAR DAYS' NOTICE AND SPECIFYING
THE  EFFECTIVE  DATE  FOR  THE  TERMINATION,  UNLESS A SHORTER NOTICE IS
AGREED UPON BY THE PARTIES.
  3. THE RIGHTS CONFERRED UPON A  TENANT  BY  SUBDIVISION  TWO  OF  THIS
SECTION  SHALL  NOT BE CONSTRUED TO INFRINGE UPON THE GREATER RIGHTS, IF
ANY, OF ANY TENANT NOT NAMED IN THE FORECLOSURE ACTION.
  4. ANY PERSON OR ENTITY ACQUIRING THE  PROPERTY  WHOSE  TITLE  BECOMES
EFFECTIVE  AT  A  DATE  PRIOR  TO  THE EXPIRATION OF THE SIX CONSECUTIVE
MONTHLY TERMS DESCRIBED IN SUBDIVISION TWO OF THIS  SECTION  SHALL  TAKE
TITLE  SUBJECT  TO  THE  RENEWABLE  MONTHLY  TENANCIES DESCRIBED IN SUCH
SUBDIVISION. WHETHER OR NOT THE PROPERTY IS RE-SOLD  DURING  THAT  TIME,
UPON  THE  EXPIRATION OF THAT PERIOD, THE TENANT SHALL BECOME A "MONTHLY
TENANT" OR A "TENANT FROM MONTH TO MONTH" AS REFERENCED IN  SECTION  TWO
HUNDRED  THIRTY-TWO-A  OF THE REAL PROPERTY LAW IN THE CITY OF NEW YORK,
OR IN SECTION TWO HUNDRED THIRTY-TWO-B OF THE REAL PROPERTY LAW  OUTSIDE
THE  CITY  OF  NEW  YORK, AND SHALL BE IN PRIVITY WITH THE OWNER, AT THE
SAME RENT AND ON THE SAME TERMS AND CONDITIONS AS DURING THE  PRIOR  SIX
MONTH  PERIOD.  NO  TENANT  SHALL AT ANY TIME BE REMOVED FROM POSSESSION
EXCEPT THROUGH SUMMARY PROCEEDING UNDER ARTICLE SEVEN  OF  THIS  CHAPTER
BASED  UPON  ONE  OR MORE OF THE GROUNDS LISTED IN SECTION SEVEN HUNDRED
ELEVEN OF THIS CHAPTER.
  5. UPON THE ISSUANCE OF A JUDGMENT OF  FORECLOSURE  PURSUANT  TO  THIS
ARTICLE  AND THE SALE OF THE SUBJECT PROPERTY AND RECORDING OF THE DEED,
AN OWNER-OCCUPANT OF THE PROPERTY OR PART THEREOF SHALL BE PERMITTED  TO
REMAIN  IN  OCCUPANCY  AS A TENANT AS PROVIDED FOR IN SUBDIVISION TWO OF
THIS SECTION, WITH THE EXCEPTION THAT THE RENT IN EFFECT SHALL BE SET BY
THE OWNER IN AN AMOUNT NOT TO EXCEED ONE  HUNDRED  TEN  PERCENT  OF  THE
APPLICABLE  AREA  FAIR  MARKET  RENT  PUBLISHED  ANNUALLY BY THE FEDERAL
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PURSUANT TO SECTION  8(C)(1)
OF   THE  UNITED  STATES  HOUSING  ACT  OF  1937,  AS  AMENDED,  42  USC
1437F(C)(1).
  6. NOTHING IN THIS SECTION SHALL BE INTERPRETED TO REVOKE,  SUPERSEDE,
OR LIMIT ANY RIGHT HELD BY ANY OCCUPANT PURSUANT TO ANY STATE OR FEDERAL
LAW  WHICH HAS AS ITS OBJECTIVE THE PROTECTION OF BORROWERS, MORTGAGORS,
TENANTS OR OCCUPANTS, INCLUDING THE EMERGENCY HOUSING RENT CONTROL  LAW,
THE LOCAL EMERGENCY HOUSING RENT CONTROL ACT, THE CITY RENT AND REHABIL-
ITATION   LAW,   THE   EMERGENCY   TENANT  PROTECTION  ACT  OF  NINETEEN
SEVENTY-FOUR, THE RENT STABILIZATION LAW OF NINETEEN HUNDRED  SIXTY-NINE
AND THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK, OR ANY REGULATIONS,
RULES OR POLICIES PROMULGATED UNDER SUCH LAWS, ACTS OR CODES.
  S  2.  This  act shall take effect on the ninetieth day after it shall
have become a law.

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