Senate Bill S1544

                                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 for 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 quantified 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
separate 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 legislatively-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 are
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
Development

FISCAL IMPLICATIONS: None is anticipated.

EFFECTIVE DATE:  This act shall take effect immediately.