senate Bill S5465A

Signed By Governor
2013-2014 Legislative Session

Authorizes the commissioner of housing preservation and development for the city of New York to bring a special proceeding for appointment of an administrator for distressed property

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Archive: Last Bill Status Via A7834 - Signed by Governor


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Oct 23, 2013 signed chap.455
Oct 11, 2013 delivered to governor
Jun 21, 2013 returned to assembly
passed senate
3rd reading cal.1654
substituted for s5465a
Jun 21, 2013 substituted by a7834b
ordered to third reading cal.1654
committee discharged and committed to rules
Jun 17, 2013 print number 5465a
amend and recommit to housing, construction and community development
May 16, 2013 referred to housing, construction and community development

Votes

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Bill Amendments

Original
A (Active)
Original
A (Active)

S5465 - Bill Details

See Assembly Version of this Bill:
A7834B
Law Section:
Real Property Actions and Proceedings Law
Laws Affected:
Amd §§770 & 778, RPAP L

S5465 - Bill Texts

view summary

Authorizes the commissioner of housing preservation and development for the city of New York to bring a special proceeding for appointment of an administrator for distressed property; provides for owner liability for costs of operating property and costs of the administrator after the administrator takes over management of the property.

view sponsor memo
BILL NUMBER:S5465

TITLE OF BILL: An act to amend the real property actions and
proceedings law, in relation to grounds for bringing a special
proceeding, and payment to and liability of administrators appointed
pursuant to a special proceeding

PURPOSE:

The purpose of this bill is to amends Section 770 and 778 of Article
7-A of the Real Property Actions and Proceedings Law (RAPL), relating
to the appointment of an administrator for distressed property through
a special proceeding.

SUMMARY OF PROVISIONS:

Section 1 adds the issuance of an order by the Commissioner of the New
York City Department of Housing Preservation and Development ("HPD")
pursuant to Administrative Code § 27-2153 as a basis for bringing a
special proceeding to appoint an administrator.

This section also adds the existence of any municipal arrears or lien
on the property as a basis for HPD to bring an Article 7A proceeding.
New York City Administrative Code § 27-2153 sets forth the City's
Alternative Enforcement Program ("AEP"), which empowers HPD to
designate certain poorly maintained properties as candidates for
special enforcement treatment. Under the AEP, if an owner fails to
comply with a directive to repair violations, HPD may issue an order
and file it against the property, requiring that significant repair
work be performed. If an owner fails to do the work, HPD ensures that
such work is performed, and the cost of the work and program fees
become a lien against the property.

Section 2 clarifies that the court may authorize an administrator to
lease all or any part of the premises that he or she administers. It
also requires an owner to pay all outstanding municipal charges and
liens that are charged to the property, in order to secure judicial
discharge of an administrator. Finally, it provides that the
administrator can be reimbursed for legal fees incurred in connection
with management of the property.

Section 3 clarifies that even when an administrator is appointed, an
owner remains liable for injury to persons and property as a result of
conditions on the premises.

Section 4 authorizes the bill to take effect immediately.

JUSTIFICATION:

When owners of buildings included in the AEP abandon their buildings,
often no one is left in place to manage them. This causes undue
hardship and confusion for existing tenants, in addition to allowing
buildings to fall into disrepair. While the City steps in to repair
such buildings, there is still a need for a day-to-day manager or
administrator. This legislation provides two additional grounds for
bringing a special Proceeding to appoint such an administrator: an
owner's failure to comply with an AEP order, and the existence of


municipal arrears or liens on these buildings. Appointment of an
administrator in these two cases will help ensure that tenants are
provided with essential services, and help prevent abandonment or
further deterioration of such buildings.

The provision related to leasing is important to ensure that buildings
are competently run and able to realize all potential revenue.
Mandating that an owner repay all outstanding municipal charges and
liens on such buildings, including the costs of building repair, prior
to discharge of the administrator ensures that the owner is
financially capable of keeping the building in sound condition and
reimburses the City for rehabilitating the building. The provisions
related to administrator liability address a continuing issue where
administrators must defend themselves in litigation which should
properly be brought against an owner. These provisions provide for
reimbursement of the administrator for legal fees incurred in such
proceedings, and clarify that the owner is still liable for injury to
persons or property due to conditions on the premises.

Accordingly, the Mayor urges the earliest possible favorable
consideration of this proposal by the Legislature.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately.

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

                                  5465

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  YOUNG  -- 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  real  property  actions and proceedings law, in
  relation to grounds for bringing a special proceeding, and payment  to
  and  liability  of  administrators  appointed  pursuant  to  a special
  proceeding

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

  Section  1.  Subdivision 1 of section 770 of the real property actions
and proceedings law, as amended by chapter 877 of the laws of  1982,  is
amended to read as follows:
  1.  One-third  or  more of the tenants occupying a dwelling located in
the city of New York or the commissioner of the department of  the  city
of  New York charged with enforcement of the housing maintenance code of
such city, or in the counties of Nassau, Suffolk, Rockland and Westches-
ter may maintain a special proceeding as provided in this article,  upon
the  ground that there exists in such dwellings or in any part thereof a
lack of heat or of running water or of light or  of  electricity  or  of
adequate sewage disposal facilities, or any other condition dangerous to
life,  health or safety, which has existed for five days, or an infesta-
tion by rodents, or any combination of such  conditions;  or  course  of
conduct  by the owner or [his] THE OWNER'S agents of harassment, illegal
eviction, continued deprivation of services or other acts  dangerous  to
life, health or safety; OR THE ISSUANCE OF AN ORDER TO THE OWNER OF SUCH
DWELLING  BY THE COMMISSIONER OF SUCH DEPARTMENT OF THE CITY OF NEW YORK
PURSUANT TO THE ALTERNATIVE ENFORCEMENT PROGRAM UNDER SECTION 27-2153 OF
THE ADMINISTRATIVE CODE OF THE CITY OF  NEW  YORK,  PROVIDED  THAT  SUCH
DWELLING  HAS  NOT  BEEN  DISCHARGED  FROM  THE PROGRAM PURSUANT TO SUCH
SECTION AND THERE HAS NOT  BEEN  A  DETERMINATION  THAT  THE  OWNER  HAS
SUBSTANTIALLY  COMPLIED  WITH SUCH ORDER; OR THE EXISTENCE OF ARREARS OF

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10829-01-3

S. 5465                             2

ANY MUNICIPAL CHARGE OR LIEN DUE AND OWING TO THE CITY OF  NEW  YORK  ON
SUCH  DWELLING,  PROVIDED, HOWEVER THAT THE EXISTENCE OF SUCH ARREARS OR
LIEN SHALL FORM THE GROUNDS FOR SUCH PROCEEDING ONLY WHEN SUCH  PROCEED-
ING  HAS  BEEN  COMMENCED  BY THE COMMISSIONER OF SUCH DEPARTMENT OF THE
CITY OF NEW YORK.
  S 2. Subdivision 1 of section 778 of the  real  property  actions  and
proceedings  law,  as  amended  by  chapter  95  of the laws of 1989, is
amended to read as follows:
  1. The court is authorized and empowered, in implementation of a judg-
ment rendered pursuant to section seven  hundred  seventy-six  or  seven
hundred  seventy-seven  of  this article, to appoint a person other than
the owner, a mortgagee or lienor, to receive  and  administer  the  rent
moneys or security deposited with [him] SUCH OWNER, MORTGAGEE OR LIENOR,
subject to the court's direction. The court may appoint the commissioner
of  the  department  of the city of New York charged with enforcement of
the housing maintenance code of such city or  [his]  THE  COMMISSIONER'S
designee  as  such administrator, provided that [he] THE COMMISSIONER OR
THE COMMISSIONER'S DESIGNEE shall consent, in writing, to such  appoint-
ment.  Any  administrator is authorized and empowered in accordance with
the direction of the court, to order the necessary materials, labor  and
services  to  remove or remedy the conditions specified in the judgment,
and to make disbursements in payment thereof; and to demand, collect and
receive the rents from the tenants; and to institute all necessary legal
proceedings including, but not limited to, summary proceedings  for  the
removal  of  any  tenant  or tenants; and to rent or lease for terms not
exceeding three years ALL OR any part of  said  premises,  however,  the
court may [direct] AUTHORIZE the administrator to rent or lease [commer-
cial  parts]  ALL  OR ANY PART of said premises for terms that the court
may approve. In addition, such administrator is authorized and empowered
in accordance with the direction of the court to accept and  repay  such
moneys  as  may be received from the department charged with enforcement
of the housing maintenance code of the city of New York for the  purpose
of  replacing  or  substantially  rehabilitating systems or making other
repairs or capital improvements authorized  by  the  court.  All  moneys
expended  by the department pursuant to the foregoing shall constitute a
debt recoverable from the owner and a lien upon the  building  and  lot,
and upon the rents and other income thereof. Such lien shall be enforced
in accordance with the provisions of article eight of subchapter five of
the  housing  maintenance  code  of the city of New York.  SUCH LIEN, IN
ADDITION TO ANY OTHER OUTSTANDING MUNICIPAL CHARGE OR LIEN ON SUCH PREM-
ISES, SHALL BE SATISFIED IN FULL BY SUCH OWNER AS  A  CONDITION  OF  THE
COURT  GRANTING  DISCHARGE  OF  THE  ADMINISTRATOR.  Such administrator,
shall, upon completion of the work prescribed  in  such  judgment,  file
with  the  court  a full accounting of all receipts and expenditures for
such work. Such administrator shall  dispose  of  the  rents  and  other
monies  deposited with [him] SUCH ADMINISTRATOR according to the follow-
ing order of priority:
  (a) Payment in full for all of the work  specified  in  the  judgment.
Until  all  of the work specified in the judgment has been completed and
payment for such work has been made, no  other  disbursements  shall  be
permitted,  except  for  fuel  bills,  fire and liability insurance, and
bills for ordinary repairs and maintenance.
  (b) Payment of a reasonable amount for the services of  such  adminis-
trator,  INCLUDING  REIMBURSEMENT  OF  ANY  LEGAL  FEES INCURRED BY SUCH
ADMINISTRATOR IN CONNECTION WITH MANAGEMENT OF THE BUILDING.

S. 5465                             3

  (c) Payment of outstanding real property tax liens claimed by the city
of New York.
  (d)  Payment  of outstanding emergency repair liens filed and recorded
by the city of New York and outstanding liens filed and recorded by  the
city pursuant to this section.
  (e)  Payment  to  the owner of any surplus remaining after payments of
paragraphs (a) through (d) of this subdivision have been made.
  S 3. Subdivision 6 of section 778 of the  real  property  actions  and
proceedings law, as added by chapter 877 of the laws of 1982, is amended
to read as follows:
  6.  Such  administrator  shall  be  liable only in his OR HER official
capacity for injury to persons and property by reason of  conditions  of
the  premises in a case where an owner would have been liable; he OR SHE
shall not have any liability in his OR HER personal  capacity.  APPOINT-
MENT  OF  AN  ADMINISTRATOR  PURSUANT TO SUBDIVISION ONE OF THIS SECTION
SHALL NOT RELIEVE AN OWNER OF LIABILITY FOR INJURY TO PERSONS AND  PROP-
ERTY IN SUCH CASE.
  S 4. This act shall take effect immediately.

S5465A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A7834B
Law Section:
Real Property Actions and Proceedings Law
Laws Affected:
Amd §§770 & 778, RPAP L

S5465A (ACTIVE) - Bill Texts

view summary

Authorizes the commissioner of housing preservation and development for the city of New York to bring a special proceeding for appointment of an administrator for distressed property; provides for owner liability for costs of operating property and costs of the administrator after the administrator takes over management of the property.

view sponsor memo
BILL NUMBER:S5465A

TITLE OF BILL: An act to amend the real property actions and
proceedings law, in relation to grounds for bringing a special
proceeding, and payment to and liability of administrators appointed
pursuant to a special proceeding

PURPOSE: The purpose of this bill is to amends Section 770 and 778 of
Article 7-A of the Real Property Actions and Proceedings Law (RAPL),
relating to the appointment of an administrator for distressed
property through a special proceeding.

SUMMARY OF PROVISIONS:

Section 1 adds the issuance of an order by the Commissioner of the New
York City Department of Housing Preservation and Development ("HPD")
pursuant to Administrative Code § 27-2153 as a basis for bringing a
special proceeding to appoint an administrator.

This section also adds the existence of any municipal arrears or lien
on the property as a basis for HPD to bring an Article 7P.
proceeding. New York City Administrative Code § 27-2153 sets forth the
City's Alternative Enforcement Program ("AEP"), which empowers fin to
designate certain poorly maintained properties as candidates for
special enforcement treatment. Under the AEP, if an owner fails to
comply with a directive to repair violations, HPD may issue an order
and file it against the property, requiring that significant repair
work be performed. If an owner fails to do the work, HPD ensures that
such work is performed, and the cost of the work and program fees
become a lien against the property.

Section 2 clarifies that the court may authorize an administrator to
lease all or any part of the premises that he or she administers. It
also requires an owner to pay or enter into a payment agreement to pay
all outstanding real property tax liens claimed by NYC, all
outstanding charges of the alternative enforcement program, and all
other liens filed by NYC under RPL Section 778. Finally, it provides
that the administrator can be reimbursed for legal fees incurred in
connection with management of the property.

Section 3 clarifies that even when an administrator is appointed, an
owner remains liable for injury to persons and property as a result of
conditions on the premises.

Section 4 authorizes the bill to take effect immediately.

JUSTIFICATION: When owners of buildings included in the AEP abandon
their buildings, often no one is left in place to manage them. This
causes undue hardship and confusion for existing tenants, in addition
to allowing buildings to fall into disrepair. While the City steps in
to repair such buildings, there is still a need for a day-to-day
manager or administrator. This legislation provides two additional
grounds for bringing a special proceeding to appoint such an
administrator: an owner's failure to comply with an ASP order, and the
existence of municipal arrears or liens on these buildings.
Appointment of an administrator in these two cases will help ensure


that tenants are provided with essential services, and help prevent
abandonment or further deterioration of such buildings.

The provision related to leasing is important to ensure that buildings
are competently run and able to realize all potential revenue.
Mandating that an owner repay or enter into a payment agreement to
repay all outstanding real property tax liens, all outstanding
emergency repair liens filed and recorded by the City of New York and
outstanding liens filed and recorded by the City pursuant to this
section before the administrator is discharged ensures that the owner
is financially capable of keeping the building in sound condition and
reimburses the City for rehabilitating the building. The provisions
related to administrator liability address a continuing issue where
administrators must defend themselves in litigation which should
properly be brought against an owner. These provisions provide for
reimbursement of the administrator for legal fees incurred in such
proceedings, and clarify that the owner is still liable for injury to
persons or property due to conditions on the premises.

Accordingly, the Mayor urges the earliest possible favorable
consideration of this proposal by the Legislature.

LEGISLATIVE HISTORY: New Bill.

FISCAL IMPLICATIONS:Mone.

EFFECTIVE DATE: This act shall take effect immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5465--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Housing, Construction  and
  Community  Development  -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the  real  property  actions  and  proceedings  law,  in
  relation  to grounds for bringing a special proceeding, and payment to
  and liability  of  administrators  appointed  pursuant  to  a  special
  proceeding

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

  Section 1. Subdivision 1 of section 770 of the real  property  actions
and  proceedings  law, as amended by chapter 877 of the laws of 1982, is
amended to read as follows:
  1. One-third or more of the tenants occupying a  dwelling  located  in
the  city  of New York or the commissioner of the department of the city
of New York charged with enforcement of the housing maintenance code  of
such city, or in the counties of Nassau, Suffolk, Rockland and Westches-
ter  may maintain a special proceeding as provided in this article, upon
the ground that there exists in such dwellings or in any part thereof  a
lack  of  heat  or  of running water or of light or of electricity or of
adequate sewage disposal facilities, or any other condition dangerous to
life, health or safety, which has existed for five days, or an  infesta-
tion  by  rodents,  or  any combination of such conditions; or course of
conduct by the owner or [his] THE OWNER'S agents of harassment,  illegal
eviction,  continued  deprivation of services or other acts dangerous to
life, health or safety, OR THE ISSUANCE OF AN ORDER TO THE OWNER OF SUCH
DWELLING BY THE COMMISSIONER OF SUCH DEPARTMENT OF THE CITY OF NEW  YORK
PURSUANT TO THE ALTERNATIVE ENFORCEMENT PROGRAM UNDER SECTION 27-2153 OF
THE  ADMINISTRATIVE  CODE  OF  THE  CITY OF NEW YORK, PROVIDED THAT SUCH
DWELLING HAS NOT BEEN DISCHARGED  FROM  THE  PROGRAM  PURSUANT  TO  SUCH

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10829-07-3

S. 5465--A                          2

SECTION  AND  THERE  HAS  NOT  BEEN  A  DETERMINATION THAT THE OWNER HAS
SUBSTANTIALLY COMPLIED WITH SUCH ORDER.
  S  2.  Subdivision  1  of section 778 of the real property actions and
proceedings law, as amended by chapter  95  of  the  laws  of  1989,  is
amended to read as follows:
  1. The court is authorized and empowered, in implementation of a judg-
ment  rendered  pursuant  to  section seven hundred seventy-six or seven
hundred seventy-seven of this article, to appoint a  person  other  than
the  owner,  a  mortgagee  or lienor, to receive and administer the rent
moneys or security deposited with [him] SUCH OWNER, MORTGAGEE OR LIENOR,
subject to the court's direction. The court may appoint the commissioner
of the department of the city of New York charged  with  enforcement  of
the  housing  maintenance  code of such city or [his] THE COMMISSIONER'S
designee as such administrator, provided that [he] THE  COMMISSIONER  OR
THE  COMMISSIONER'S DESIGNEE shall consent, in writing, to such appoint-
ment. Any administrator is authorized and empowered in  accordance  with
the  direction of the court, to order the necessary materials, labor and
services to remove or remedy the conditions specified in  the  judgment,
and to make disbursements in payment thereof; and to demand, collect and
receive the rents from the tenants; and to institute all necessary legal
proceedings  including,  but not limited to, summary proceedings for the
removal of any tenant or tenants; and to rent or  lease  for  terms  not
exceeding  three years any part of said premises, however, the court may
direct the administrator to rent or lease commercial parts of said prem-
ises for terms that the court may approve. In addition, such administra-
tor is authorized and empowered in accordance with the direction of  the
court  to  accept  and  repay  such  moneys  as may be received from the
department charged with enforcement of the housing maintenance  code  of
the city of New York for the purpose of replacing or substantially reha-
bilitating  systems  or  making  other  repairs  or capital improvements
authorized by the court. All moneys expended by the department  pursuant
to  the foregoing shall constitute a debt recoverable from the owner and
a lien upon the building and lot, and upon the rents  and  other  income
thereof.  Such  lien shall be enforced in accordance with the provisions
of article eight of subchapter five of the housing maintenance  code  of
the  city of New York. Such administrator, shall, upon completion of the
work prescribed in such judgment, file with the court a full  accounting
of all receipts and expenditures for such work. Such administrator shall
dispose of the rents and other monies deposited with [him] SUCH ADMINIS-
TRATOR according to the following order of priority:
  (a)  Payment  in  full  for all of the work specified in the judgment.
Until all of the work specified in the judgment has been  completed  and
payment  for  such  work  has been made, no other disbursements shall be
permitted, except for fuel bills,  fire  and  liability  insurance,  and
bills for ordinary repairs and maintenance.
  (b)  Payment  of a reasonable amount for the services of such adminis-
trator, INCLUDING REIMBURSEMENT OF  ANY  LEGAL  FEES  INCURRED  BY  SUCH
ADMINISTRATOR IN CONNECTION WITH MANAGEMENT OF THE BUILDING.
  (c) Payment of outstanding real property tax liens claimed by the city
of New York.
  (d)  Payment  of outstanding emergency repair liens filed and recorded
by the city of New York and outstanding liens filed and recorded by  the
city pursuant to this section.
  (e)  Payment  to  the owner of any surplus remaining after payments of
paragraphs (a) through (d) of this subdivision have been made.

S. 5465--A                          3

  S 3. Subdivision 6 of section 778 of the  real  property  actions  and
proceedings law, as added by chapter 877 of the laws of 1982, is amended
to read as follows:
  6.  Such  administrator  shall  be  liable only in his OR HER official
capacity for injury to persons and property by reason of  conditions  of
the  premises in a case where an owner would have been liable; he OR SHE
shall not have any liability in his OR HER personal  capacity.  APPOINT-
MENT  OF  AN  ADMINISTRATOR  PURSUANT TO SUBDIVISION ONE OF THIS SECTION
SHALL NOT RELIEVE AN OWNER OF LIABILITY FOR INJURY TO PERSONS AND  PROP-
ERTY IN SUCH CASE.
  S  4.  Section 778 of the real property actions and proceedings law is
amended by adding a new subdivision 11 to read as follows:
  11. THE COURT MAY ONLY DISCHARGE AN ADMINISTRATOR  IF  THE  OWNER  HAS
PAID  IN  FULL  OR  ENTERED  INTO A PAYMENT AGREEMENT TO PAY IN FULL ALL
OUTSTANDING REAL PROPERTY TAX LIENS CLAIMED BY THE CITY OF NEW YORK, ALL
OUTSTANDING EMERGENCY REPAIR LIENS FILED AND RECORDED BY THE CITY OF NEW
YORK, ALL OUTSTANDING CHARGES AND LIENS ASSESSED IN  CONNECTION  TO  THE
ALTERNATIVE  ENFORCEMENT  PROGRAM  AUTHORIZED  BY SECTION 27-2153 OF THE
ADMINISTRATIVE CODE OF THE CITY OF NEW YORK, AND OUTSTANDING LIENS FILED
AND RECORDED BY THE CITY PURSUANT TO THIS  SECTION.  THE  PROVISIONS  OF
THIS  SUBDIVISION  SHALL  NOT APPLY TO BUILDINGS TRANSFERRED PURSUANT TO
SUBDIVISION TEN OF THIS SECTION.
  S 5. This act shall take effect immediately.

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