NY State Senate Bill S3987

Current Bill Status Via A215 - Vetoed by Governor

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Vetoed by Governor

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Actions

view actions (12)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 06, 2019	tabled vetoed memo.170
Nov 26, 2019	delivered to governor
May 22, 2019	returned to assembly passed senate 3rd reading cal.702 substituted for s3987
May 22, 2019	substituted by a215
May 20, 2019	advanced to third reading
May 15, 2019	2nd report cal.
May 14, 2019	1st report cal.702
Feb 22, 2019	referred to judiciary

Votes

view votes

May 22, 2019 - floor Vote

A215

floor

Aye

Nay

Absent

Excused

Abstained

May 14, 2019 - Judiciary committee Vote

S3987

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

S3987 (ACTIVE) - Details

See Assembly Version of this Bill:: A215
Law Section:: Real Property Law
Laws Affected:: Add §220-a, RP L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S5245, A7269
2015-2016: S3148, A3391
2017-2018: S5219, A353

S3987 (ACTIVE) - Summary

Relates to ground leases.

S3987 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S3987

SPONSOR: STAVISKY
 
TITLE OF BILL:  An act to amend the real property law, in relation to
ground leases

 
PURPOSE OR GENERAL IDEA OF BILL:

Relates to ground leases.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 adds a new section 220-a to define a residential ground lease
for the purpose of this section as a rental agreement that has a term of
at least ten years; is for the use of real property, which may or may
not include any improvements or structures; and 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. This definition shall exclude real property owned as the
common property of an Indian nation, tribe, or band as such lands are
protected under federal code.

The new section also concerns the ability of holders of residential
ground leases to refinance their property, and includes guidelines for
lessors. For example, absent an express provision prohibiting a lessee
from encumbering its interest, a lessee may encumber up to and including
its entire interest in such residential ground lease. If a residential
ground lease does contain provisions restricting the lessee's ability to
encumber its interest, the lessee must obtain the lessor's written
permission prior to such encumbrance.

Additionally, if the lessee is must receive 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.

Finally, 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 lessee has encumbered its interest in a ground lease, no adjustment
that reduces the amount such lessee could receive shall be considered a
breach of the 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.

Section 2 provides the effective date.

 
JUSTIFICATION:

Some co-ops in New York City are constructed on land owned by a holding
company. The holding company leases the land to co-ops for a stated term
sometimes as long as 99-years. Under the terms of the lease, some hold-
ing, companies may place restrictions on the lessee's ability to encum-
ber its interest by refinancing.
In recent times, many co-ops have sought to take advantage of favorable
interest rates to refinance and modernize in order to meet mandated
requirements of the City of New York. Despite the fact that it is finan-
cially prudent for a co-op to undergo refinancing, there have been
instances where the landlord exercises their contractual right to deny
new borrowing. This bill would require that when rejecting a request to
refinance, the landlord mast give a reason for such a denial. Requiring
the landlord to offer a justification for denial of refinancing would
ensure that both parties are negotiating in good faith, as intended
under the contract.

This bill would also adjust the amount that the encumbrance placed on
the property in accordance with the regional consumer price index.  The
limits placed on many leases may have been appropriate at the time the
lease was conveyed, but as a result of inflation, the maximum allowable
encumbrance in many leases are likely out of date and must keep up with
the current economic climate.

 
PRIOR LEGISLATIVE HISTORY:

2018: S.5219 referred to Judiciary; / A.353 - passed Assembly.

 
FISCAL IMPLICATIONS:

None to state.

 
EFFECTIVE DATE:
This act shall take effect immediately.

S3987 (ACTIVE) - Bill Text download pdf


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

                                  3987

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                            February 22, 2019
                               ___________

Introduced  by Sen. STAVISKY -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

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.

                                                           LBD02662-01-9

S. 3987                             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.

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The New York State Senate

senate Bill S3987

Sponsored By

Current Bill Status Via A215 - Vetoed by Governor

Your Voice

Actions

Votes

May 22, 2019 - floor Vote

Floor Vote: May 22, 2019

May 14, 2019 - Judiciary committee Vote

Judiciary Committee Vote: May 14, 2019

S3987 (ACTIVE) - Details

S3987 (ACTIVE) - Summary

S3987 (ACTIVE) - Sponsor Memo

S3987 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S3987

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Sponsored By

Toby Ann Stavisky

Current Bill Status Via A215 - Vetoed by Governor

Your Voice

Actions

Votes

May 22, 2019 - floor Vote

Floor Vote: May 22, 2019

May 14, 2019 - Judiciary committee Vote

Judiciary Committee Vote: May 14, 2019

S3987 (ACTIVE) - Details

S3987 (ACTIVE) - Summary

S3987 (ACTIVE) - Sponsor Memo

S3987 (ACTIVE) - Bill Text download pdf

Comments