Assembly Bill A3391A

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

                                 3391--A
                                                        Cal. No. 139

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 22, 2015
                               ___________

Introduced  by  M.  of  A.  BRAUNSTEIN  -- read once and referred to the
  Committee on Housing -- reported and  referred  to  the  Committee  on
  Codes  --  advanced to a third reading, amended and ordered reprinted,
  retaining its place on the order of third reading

AN ACT to amend the real property law, in relation to ground leases

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

  Section  1.  The  real property law is amended by adding a new section
220-a to read as follows:
  S 220-A. RESIDENTIAL GROUND LEASES.  1. DEFINITIONS. FOR THE  PURPOSES
OF THIS SECTION ONLY, A "RESIDENTIAL GROUND LEASE" SHALL BE DEFINED AS A
RENTAL AGREEMENT THAT:
  (A) HAS A TERM OF AT LEAST TEN YEARS;
  (B)  IS FOR THE USE OF REAL PROPERTY, WHICH MAY OR MAY NOT INCLUDE ANY
IMPROVEMENTS OR STRUCTURES, BUT SHALL NOT APPLY TO REAL  PROPERTY  OWNED
AS  THE  COMMON  PROPERTY  OF  ANY INDIAN NATION, TRIBE, OR BAND AS SUCH
LANDS ARE DESCRIBED UNDER AND PROTECTED BY INDIAN LAW AND/OR TITLE 25 OF
THE UNITED STATES CODE; AND
  (C) ALLOWS A TENANT TO CONSTRUCT OR SUBSTANTIALLY  IMPROVE,  RENOVATE,
OR  REHABILITATE  STRUCTURES  OR  IMPROVEMENTS  THAT INCLUDE ONE OR MORE
RESIDENTIAL DWELLINGS UPON SUCH REAL PROPERTY.
  2. REFINANCING. (A) IF ANY RESIDENTIAL GROUND LEASE DOES  NOT  CONTAIN
EXPRESS PROVISIONS PROHIBITING A LESSEE FROM ENCUMBERING ITS INTEREST IN
A  RESIDENTIAL  GROUND  LEASE, A LESSEE MAY ENCUMBER UP TO AND INCLUDING
ITS ENTIRE INTEREST IN SUCH RESIDENTIAL GROUND LEASE. IF  SUCH  RESIDEN-
TIAL  GROUND  LEASE CONTAINS PROVISIONS RESTRICTING THE LESSEE'S ABILITY
TO ENCUMBER ITS INTEREST, THE LESSEE MUST OBTAIN  THE  LESSOR'S  WRITTEN
PERMISSION PRIOR TO SUCH ENCUMBRANCE.
  (B)  IF  THE  LESSEE  IS REQUIRED TO OBTAIN THE LESSOR'S PERMISSION TO
ENCUMBER THE LESSEE'S INTEREST, THE LESSOR MAY ONLY REFUSE TO GRANT SUCH
PERMISSION FOR REASONABLE CAUSE AND MUST PROVIDE THE LESSEE WITH A WRIT-

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

                                                           LBD05230-02-5

A. 3391--A                          2

TEN STATEMENT THAT SETS FORTH THE BASIS FOR THE REFUSAL  WITHIN  FIFTEEN
DAYS OF A WRITTEN REQUEST FOR PERMISSION FROM THE LESSEE.
  (C)  ANY  RESIDENTIAL  GROUND LEASE PROVISION THAT LIMITS THE AMOUNT A
LESSEE COULD ENCUMBER ITS INTEREST,  UP  TO  AND  INCLUDING  ITS  ENTIRE
INTEREST IN SUCH RESIDENTIAL GROUND LEASE, SHALL ALSO ADJUST SUCH AMOUNT
ANNUALLY  ON  THE FIRST DAY OF OCTOBER OF EACH YEAR BY THE CHANGE IN THE
REGIONAL CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS, NEW YORK-NORTHERN
NEW  JERSEY-LONG  ISLAND,  NY-NJ-CT-PA,  AS  ESTABLISHED  THE  PRECEDING
AUGUST.
  IF A LESSEE HAS ENCUMBERED ITS INTEREST IN A RESIDENTIAL GROUND LEASE,
NO  ADJUSTMENT  PURSUANT  TO THIS PARAGRAPH THAT REDUCES THE AMOUNT SUCH
LESSEE COULD RECEIVE SHALL BE CONSIDERED A  BREACH  OF  THE  RESIDENTIAL
GROUND  LEASE.    ANY  AGREEMENT  BY  A  LESSEE WAIVING OR MODIFYING THE
PROVISIONS AS SET FORTH IN THIS PARAGRAPH SHALL BE VOID AS  CONTRARY  TO
PUBLIC POLICY.
  S 2. This act shall take effect immediately.