BILL NUMBER:S1544

TITLE  OF BILL:   An act to amend the multiple dwelling law, in relation
to the  collection  of  charges  for  heat-related  residential  utility
service

PURPOSE  OR  GENERAL  IDEA OF BILL:  This bill would amend section 79 of
the Multiple Dwelling Law to eliminate the practice of  building  owners
charging  residential  rental  tenants for electricity, natural gas, and
other fuel used for space heating in the dwelling unit.

SUMMARY OF SPECIFIC PROVISIONS:   Subdivision 1 of  section  79  of  the
multiple  dwelling  law  is amended to prohibit an owner or agent of any
owner from separately charging tenants or occupants for any electricity,
electric service, natural gas or  natural  gas  service  or  other  fuel
utilized to heat living quarters.

JUSTIFICATION:    Shifting  heating  costs  to  tenants reduces economic
incentives fox landlords to improve  the  thermal  efficiency  of  their
structures, through measures such as insulation, window replacement with
high  efficiency  glass,  and  provide  more  efficient heating systems,
fixtures, and smart controls.  This  is  contrary  to  state  policy  to
promote energy efficiency and to reduce greenhouse gas emissions.

As  utility  costs  rise, some building owners have begun to shift their
costs for fuel and electricity onto their tenants, by requiring  tenants
              

to  pay  heating  surcharges,  separate and apart from rent, for fuel or
electricity used to heat their  dwelling  units.  These  surcharges  are
based  on consumption measured by either landlord-owned meters, or based
on apartment square footage allocations. These surcharges, typically for
natural gas or electricity, are inherently unpredictable, are not  quan-
tified  in tenant leases, and are not knowable in advance. As such, they
cause great hardship to tenants living  on  fixed  incomes  from  social
security,   disability  and  pensions,  who  lack  significant  savings.
Frequently, heating surcharges imposed by  owners  are  not  subject  to
outside audit or verification by the tenant and are therefore inherently
prone  to  abuse.  Shifting  building  owners'  heating costs to tenants
through unpredictable and continually varying surcharges. renders  these
costs  not  transparent  to tenants, because owners are not obligated to
reveal the energy inefficiencies of their buildings  or  the  amount  of
energy  wasted  by  the  heating equipment they operate. In contrast, if
building owners retain direct responsibility  for  heating  costs,  they
will  recover those costs in the rent they charge and they will have the
incentive to adopt cost effective efficiency measures.  The  charge  for
rent  is  fixed  and  transparent, and can be understood by existing and
prospective tenants. The Multiple  Dwelling  Law  already  imposes  upon
landlords the obligation to provide heat or heating fixtures to tenants.

This  bill  prevents  owners of multiple dwellings from imposing charges
for natural gas, electricity, or other fuel used fox space heating sepa-
rate from the stated rent. It does not affect situations where a  tenant

has  directly  metered  gas  or  electric  service from a franchised gas
corporation or electric corporation.

Requiring  tenants  to  pay  surcharges  to building owners for fuel and
electricity for heating denies them the protections of programs designed
by the legislature to protect low income utility customers  from  abuse,
such as the Home Energy Fair Practices Act (HEFPA), and the legislative-
ly-created  safety  nets  for  the needy including the emergency utility
assistance program under Social Services Law  §  131-s  and  the  energy
crisis  provisions  of  the  home energy assistance program under Social
Services Law 97  (HEAP).  Customer  remedies  and  assistance  in  these
programs is triggered by a notice of termination of utility service, and
is  not  available  when  surcharges  for heating costs axe deemed to be
"added rent,"  allowing  landlords  to  evict  tenants  for  nonpayment.
Tenants  who encounter temporary difficulty in meeting their obligations
to pay for fluctuating charges heat-related utility service are in a far
worse position than direct  utility  company  over  unpaid  or  disputed
charges;  they  are  given  the  opportunity to pay arrears over time in
affordable installments through deferred payment plans,  which  must  be
offered  as  an  alternative to termination of utility service, and they
have the opportunity to obtain emergency HEAP  or  Social  Services  Law
section  131-s  assistance.  Such  assistance  is not available when the
landlord imposes a rent surcharge for  a  utility  service  it  provides
through  its  own  meters  or  for the cost of utility service which the
landlord uses to heat the premises and allocates based on square footage
or other factors.

PRIOR LEGISLATIVE HISTORY:    2011-2012:  S.1775  Referred  to  Housing,
Construction & Community Development
2009-2010: S.4749 Referred to Housing, Construction & Community Develop-
ment

FISCAL IMPLICATIONS: None is anticipated.

EFFECTIVE DATE:  This act shall take effect immediately.