senate Bill S386

2011-2012 Legislative Session

Relates to vacancies and illegal use and occupancy with regard to cooperative or condominium conversion plans

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Archive: Last Bill Status - In Committee


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

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Jan 04, 2012 referred to housing, construction and community development
Jan 05, 2011 referred to housing, construction and community development

S386 - Bill Details

Current Committee:
Law Section:
General Business Law
Laws Affected:
Amd §352-eeee, Gen Bus L; add §5-b, amd §12, Emerg Ten Prot Act of 1974; amd §§26-512 & 26-516, NYC Ad Cd; amd §6, Emerg Hous Rent Cont L; amd §1802, NYC Chart
Versions Introduced in 2009-2010 Legislative Session:
S5617

S386 - Bill Texts

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Relates to vacancies and illegal use and occupancy with regard to cooperative or condominium conversion plans; makes it unlawful to permit or maintain any illegal use or occupancy of a premises subject to a conversion plan.

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BILL NUMBER:S386

TITLE OF BILL:
An act
to amend the general business law, in relation to vacancies and illegal
use and occupancy relating to cooperative or condominium conversion
plans; to amend the
emergency tenant protection act of nineteen seventy-four
and the administrative code of the city of New York, in relation to
leasing to business and other entities; and
to amend the emergency tenant protection act
of nineteen seventy-four, the emergency housing rent control law and the
New York city charter, in relation to investigations and inspections by
the city of New York

PURPOSE OR GENERAL IDEA OF BILL:
To protect tenants living in a
building undergoing a co-op or condo conversion, require that the
primary resident of a rent-regulated unit be a natural person, and
strengthen enforcement of rent laws.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends General Business Law

§ 352-eeee (2) (e) by extending the period in which a landlord must
maintain a long-term vacancy rate that is not "excessive" in
connection with a co-op/condo conversion. The law now bars
"warehousing" vacant apartments during the period five months prior
to filing a proposed offering statement with the attorney general.
The bill extends that ban to the period up until the proposed
offering statement is accepted by the attorney general.

Section 2 amends General Business Law § 352-eeee (4), to add that if a
landlord permits illegal use or occupancy in the building, the
attorney general may block the co-op/condo conversion.

Section 3 amends the Emergency Tenant Protection Act of 1974, adding a
new section 5-b, requiring that a Rent-Stabilized unit that is leased
by a corporation be occupied as a primary residence by a natural
person who is a current or retired employee of the corporation.

Section 4 amends the Emergency Tenant Protection Act of 1974 § 12 (a)
(3) (i), authorizing the commissioner to impose civil penalties on
parties that violate section 3 of this act.

Section 5 amends the Administrative Code of the City of New York
§ 26-512, adding a new subdivision d, prohibiting a landlord from
knowingly renting a rent-regulated unit to a person or entity that is
not using the accommodation as a primary residence.

Section 6 amends the Administrative Code of the City of New York
§ 26-516 (c) (1), authorizing the commissioner to impose civil
penalties on parties that violate section 5 of this act.

Section 7 amends the Emergency Tenant Protection Act of 1974 § 12,
adding a new paragraph 9, authorizing the New York City Department of


Housing Preservation and Development to enforce portions of the Rent
Stabilization law under an agreement with the State Division of
Housing and Community Renewal.

Section 8 amends the Emergency Rent Control Laws of 1946 § 6 (I),
adding a new paragraph a authorizing the New York City Department of
Housing Preservation and Development to enforce portions of the Rent
Control law under an agreement with the State Division of Housing and
Community Renewal.

Section 9 amends the New York City Charter § 1802, adding a new
subdivision 7, authorizing the New York City Department of Housing
Preservation and Development to enter into an agreement with the
State Division of Housing and Community Renewal to enforce Rent
Control and Rent Stabilization.

JUSTIFICATION:
Landlords who are converting rental properties into
co-ops and condos often begin evicting tenants and letting apartments
stay vacant as soon as the conversion prospectus is filed with the
attorney general, in order to increase the value of the shares or
units they intend to sell on the open market. This bill would reduce
the incentive and ability to warehouse units while the attorney
general reviews the proposed offering statement.

In many cases, landlords allow unlawful use of their properties - such
as illegal hotels - in connection with an effort to convert their
properties to co-ops or condos. They do this to harass tenants to
move out or purchase, or to make more money even when apartments are
no longer occupied by residential tenants. This practice harms
tenants, and would be prohibited by this legislation.

There is a growing problem of landlords renting apartments to
companies that in turn rent them out to transients (tourists,
short-stay occupants) as illegal hotels. This bill would require that
rent-regulated apartments be used for residential purposes.

The New York State Division of Housing and Community Renewal lacks the
resources to effectively enforce many provisions of the rent laws and
regulations in New York City. This bill would authorize the City of
New York to enforce these provisions if the City and DHCR agree.

PRIOR LEGISLATIVE HISTORY:
2009-2010: S.5617/A.6013

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Sections 3, 4,5, and 6 shall take effect after sixty
days. All other provisions shall take effect immediately.

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

                                   386

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Housing, Construction  and
  Community Development

AN  ACT  to amend the general business law, in relation to vacancies and
  illegal use and  occupancy  relating  to  cooperative  or  condominium
  conversion  plans;  to  amend  the  emergency tenant protection act of
  nineteen seventy-four and the administrative code of the city  of  New
  York,  in  relation  to leasing to business and other entities; and to
  amend the emergency tenant protection act  of  nineteen  seventy-four,
  the  emergency housing rent control law and the New York city charter,
  in relation to investigations and inspections by the city of New York

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

  Section  1.  Paragraph (e) of subdivision 2 of section 352-eeee of the
general business law, as added by chapter 555 of the laws  of  1982,  is
amended to read as follows:
  (e)  The  attorney general finds that an excessive number of long-term
vacancies did not exist on the date that the offering statement or pros-
pectus was first submitted to the department  of  law  OR  AT  ANY  TIME
BETWEEN  THAT  DATE  AND  THE  ISSUANCE  OF THE LETTER FROM THE ATTORNEY
GENERAL STATING THAT THE OFFERING STATEMENT OR  PROSPECTUS  REQUIRED  IN
SUBDIVISION ONE OF SECTION THREE HUNDRED FIFTY-TWO-E OF THIS ARTICLE HAS
BEEN  FILED.  "Long-term vacancies" shall mean dwelling units not leased
or occupied by bona fide tenants for more than five months prior to  the
date  of  such  submission to the department of law OR PRIOR TO ANY TIME
BETWEEN THAT DATE AND THE ISSUANCE OF SUCH LETTER.    "Excessive"  shall
mean a vacancy rate in excess of the greater of (i) ten percent and (ii)
a  percentage  that  is  double  the normal average vacancy rate for the
building or group of buildings or development for two years prior to the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04049-01-1

S. 386                              2

January preceding the date the  offering  statement  or  prospectus  was
first submitted to the department of law.
  S 2. Subdivision 4 of section 352-eeee of the general business law, as
added by chapter 555 of the laws of 1982, is amended to read as follows:
  4.  It  shall  be  unlawful  for any person to engage in any course of
conduct, including, but not limited to, interruption  or  discontinuance
of  essential  services, which substantially interferes with or disturbs
the comfort, repose, peace or quiet of any tenant in his use or occupan-
cy of his dwelling unit or the facilities related thereto, OR PERMITTING
OR MAINTAINING ANY ILLEGAL USE OR OCCUPANCY OF THE PREMISES. The  attor-
ney  general may apply to a court of competent jurisdiction for an order
restraining such conduct and, if  he  deems  it  appropriate,  an  order
restraining  the owner from selling the shares allocated to the dwelling
unit or the dwelling unit itself or from proceeding  with  the  plan  of
conversion;  provided  that  nothing contained herein shall be deemed to
preclude the tenant from applying on his own behalf for similar relief.
  S 3. Section 4 of chapter 576 of the laws  of  1974  constituting  the
emergency  tenant  protection act of nineteen seventy-four is amended by
adding a new section 5-b to read as follows:
  5-B. TENANCY. NOTWITHSTANDING ANY INCONSISTENT PROVISION OF  THIS  ACT
OR  THE  PROVISIONS OF ANY CONTRACT, LEASE OR RENTAL AGREEMENT, NO OWNER
OR ANY PERSON ACTING ON HIS OR HER  BEHALF,  AFTER  THIS  SECTION  TAKES
EFFECT,  SHALL ESTABLISH OR RENEW A CONTRACT, LEASE, OR RENTAL AGREEMENT
FOR OCCUPANCY OF A HOUSING ACCOMMODATION SUBJECT TO THIS ACT:
  (I) WHERE THE OWNER, OR PERSON ACTING ON  BEHALF  OF  THE  OWNER,  HAS
REASON TO KNOW THAT THE TENANT WILL NOT OCCUPY THE HOUSING ACCOMMODATION
AS HIS OR HER PRIMARY RESIDENCE;
  (II) WHERE THE TENANT IS A CORPORATION, PARTNERSHIP, OR OTHER BUSINESS
OR  NOT-FOR-PROFIT  ENTITY,  UNLESS  THE  HOUSING  ACCOMMODATION  (A) IS
INTENDED TO BE OCCUPIED  BY  AN  OFFICER,  PARTNER,  EMPLOYEE  OR  OTHER
NATURAL  PERSON PARTICIPATING IN THE DAY-TO-DAY OPERATIONS OF THE TENANT
ENTITY (OR WAS SUCH A PERSON AT THE COMMENCEMENT OF THE OCCUPANCY AND IS
NOW RETIRED FROM BEING SUCH A PERSON) WHO WILL OCCUPY THE HOUSING ACCOM-
MODATION AS HIS OR HER PRIMARY RESIDENCE, OR (B)  THE  HOUSING  ACCOMMO-
DATION IS TO BE OCCUPIED UNDER PARAGRAPHS SIX OR TEN OF SUBDIVISION A OF
SECTION FIVE OF THIS ACT.
  S 4. Subparagraph (i) of paragraph 3 of subdivision a of section 12 of
section  4 of chapter 576 of the laws of 1974 constituting the emergency
tenant protection act of nineteen seventy-four, as  amended  by  chapter
480 of the laws of 2009, is amended to read as follows:
  (i)  to  have  violated  an order of the division OR SECTION FIVE-B OF
THIS ACT the commissioner may impose by administrative order after hear-
ing, a civil penalty in the amount of one thousand dollars for the first
such offense and two thousand dollars for each subsequent offense; or
  S 5. Section 26-512 of the administrative code of the city of New York
is amended by adding a new subdivision g to read as follows:
  G. NOTWITHSTANDING ANY INCONSISTENT  PROVISION  OF  THIS  ACT  OR  THE
PROVISIONS  OF  ANY CONTRACT, LEASE OR RENTAL AGREEMENT, NO OWNER OR ANY
PERSON ACTING ON HIS OR HER BEHALF, AFTER  THIS  SECTION  TAKES  EFFECT,
SHALL  ESTABLISH  OR  RENEW  A  CONTRACT, LEASE, OR RENTAL AGREEMENT FOR
OCCUPANCY OF A HOUSING ACCOMMODATION SUBJECT TO THIS CHAPTER:
  (I) WHERE THE OWNER, OR PERSON ACTING ON  BEHALF  OF  THE  OWNER,  HAS
REASON TO KNOW THAT THE TENANT WILL NOT OCCUPY THE HOUSING ACCOMMODATION
AS HIS OR HER PRIMARY RESIDENCE;
  (II) WHERE THE TENANT IS A CORPORATION, PARTNERSHIP, OR OTHER BUSINESS
OR  NOT-FOR-PROFIT  ENTITY,  UNLESS  THE  HOUSING  ACCOMMODATION  (A) IS

S. 386                              3

INTENDED TO BE OCCUPIED  BY  AN  OFFICER,  PARTNER,  EMPLOYEE  OR  OTHER
NATURAL  PERSON PARTICIPATING IN THE DAY-TO-DAY OPERATIONS OF THE TENANT
ENTITY (OR WAS SUCH A PERSON AT THE COMMENCEMENT OF THE OCCUPANCY AND IS
NOW RETIRED FROM BEING SUCH A PERSON) WHO WILL OCCUPY THE HOUSING ACCOM-
MODATION  AS  HIS  OR HER PRIMARY RESIDENCE, OR (B) THE HOUSING ACCOMMO-
DATION IS TO BE OCCUPIED UNDER SUBPARAGRAPH (C)  OF  PARAGRAPH  NINE  OF
SUBDIVISION C OF SECTION 26-511 OF THIS CHAPTER.
  S 6. Paragraph 1 of subdivision c of section 26-516 of the administra-
tive  code of the city of New York as amended by chapter 480 of the laws
of 2009, is amended to read as follows:
  (1) to have violated an order of the  division  OR  SUBDIVISION  G  OF
SECTION  26-512  THIS CHAPTER the commissioner may impose by administra-
tive order after hearing, a civil penalty in the amount of one  thousand
dollars  for  the  first  such offense and two thousand dollars for each
subsequent offense; or
  S 7. Subdivision a of section 12 of section 4 of chapter  576  of  the
laws  of 1974, constituting the emergency tenant protection act of nine-
teen seventy-four is amended by adding a new  paragraph  9  to  read  as
follows:
  (9)  THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL MAY AUTHORIZE
THE DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT IN  THE  CITY  OF
NEW  YORK,  OR  ITS  SUCCESSOR AGENCY, TO EXERCISE ANY OF THE DIVISION'S
POWERS UNDER THIS ACT WITHIN THE CITY OF NEW YORK, PURSUANT TO AGREEMENT
WITH THAT DEPARTMENT OR AGENCY.
  S 8. Subdivision 1 of section 6 of chapter 274 of the  laws  of  1946,
constituting the emergency housing rent control law, as amended by chap-
ter 337 of the laws of 1961, is amended to read as follows:
  1.    (A)  THE  STATE  DIVISION  OF  HOUSING AND COMMUNITY RENEWAL MAY
AUTHORIZE THE DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT IN  THE
CITY  OF NEW YORK, OR ITS SUCCESSOR AGENCY, TO EXERCISE ANY OF THE DIVI-
SION'S POWERS UNDER THIS ACT WITHIN THE CITY OF NEW  YORK,  PURSUANT  TO
AGREEMENT WITH THAT DEPARTMENT OR AGENCY.
  (B)  The  commission  is  authorized to make such studies and investi-
gations, to conduct such hearings, and to obtain such information as the
commission deems necessary or proper in prescribing  any  regulation  or
order  under  this  act or in the administration and enforcement of this
act and regulations and orders thereunder.
  S 9. Section 1802 of the New York city charter is amended by adding  a
new subdivision 7 to read as follows:
  7.  ALL  POWERS,  RIGHTS  AND  DUTIES AUTHORIZED BY AND PURSUANT TO AN
AGREEMENT WITH THE NEW YORK STATE  DIVISION  OF  HOUSING  AND  COMMUNITY
RENEWAL,  OR ITS SUCCESSOR AGENCY, UNDER SECTION TWELVE OF THE EMERGENCY
TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR AND  SUBDIVISION  ONE  OF
SECTION SIX OF THE EMERGENCY HOUSING RENT CONTROL LAW.
  S  10. Severability.  If any provision of this act, or any application
of any provision of this act, is held to  be  invalid,  that  shall  not
affect the validity or effectiveness of any other provision of this act,
or of any other application of any provision of this act.
  S  11.  This  act shall take effect immediately and shall apply to any
matter pending before the attorney general at or after the time this act
becomes a law; provided, however, that:
  (a) the amendments to section 352-eeee of  the  general  business  law
made by sections one and two of this act shall not affect the expiration
of such section and shall expire therewith;
  (b)  sections  three, four, five and six of this act shall take effect
on the sixtieth day after it shall have become a law, provided that

S. 386                              4

  (i) the amendments to the emergency tenant protection act of  nineteen
seventy-four made by sections three and four of this act shall expire on
the same date as such act expires and shall not affect the expiration of
such  act  as provided in section 17 of chapter 576 of the laws of 1974;
and
  (ii)  the  amendments to sections 26-512 and 26-516 of the administra-
tive code of the city of New York made by sections five and six of  this
act  shall expire on the same date as such sections expire and shall not
affect the expiration of such sections as provided in section 26-520  of
such code; and
  (c) provided that the amendments to section 12 of the emergency tenant
protection  act  of  nineteen seventy-four made by section seven of this
act shall expire on the same date as such  act  expires  and  shall  not
affect  the  expiration of such act as provided in section 17 of chapter
576 of the laws of 1974; and provided that the amendments to  section  6
of  the emergency housing rent control law made by section eight of this
act shall expire on the same date as such  law  expires  and  shall  not
affect  the  expiration  of  such  law  as  provided in subdivision 2 of
section 1 of chapter 274 of the laws of 1946.

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