Assembly Bill A353

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    353
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              January 5, 2017
                                ___________
 
 Introduced  by  M.  of  A.  BRAUNSTEIN  -- read once and referred to the
   Committee on Housing
 
 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:
   § 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-
 TEN STATEMENT THAT SETS FORTH THE BASIS FOR THE REFUSAL  WITHIN  FIFTEEN
 DAYS OF A WRITTEN REQUEST FOR PERMISSION FROM THE LESSEE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01747-01-7

 A. 353                              2
 
   (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.
   § 2. This act shall take effect immediately.