Senate Bill S5436

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5436
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                                May 1, 2019
                                ___________
 
 Introduced  by Sens. MAY, LAVALLE -- 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 law, in relation to providing recourse
   for manufactured  homeowners  in  manufactured  home  parks,  who  are
   confronted with unjustifiable rent increases
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings. The legislature  finds  and  declares
 that:
   (a) Manufactured homes are a critical source of affordable housing for
 residents in New York state, particularly for senior citizens seeking to
 remain in their communities.
   (b) Factors unique to home ownership in manufactured home parks in New
 York  state  require  that  the  owners  of  such  manufactured homes be
 protected from involuntary forfeiture of their homes due to unreasonable
 increases in lot rent.
   (c) Homeownership in such manufactured home parks differs  from  other
 forms  of  homeownership as well as from the traditional landlord-tenant
 relationship. Unlike other homeowners, because the manufactured homeown-
 ers do not control the land on which  their  manufactured  homes  exist,
 they  have  no  control  over  this substantial portion of their housing
 costs.
   (d) Vacancies in existing manufactured home parks are  extremely  rare
 in  New York state, and the cost of relocating a manufactured home, even
 if such a vacancy exists, is prohibitively high and threatens the struc-
 tural integrity of many manufactured homes.
   (e) The  manufactured  homeowners'  total  lack  of  bargaining  power
 disrupts the normal operation of market forces and renders such manufac-
 tured  homeowners  captive  to  whatever  terms a manufactured home park
 owner may choose to impose. Although many manufactured home park  owners
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03203-02-9

 S. 5436                             2
 
 choose  not  to  take advantage of their superior bargaining power, many
 do. This often results in manufactured homeowners being evicted  because
 of  manufactured  home  park  rents  they can no longer afford, and as a
 result,  losing  their  manufactured home altogether because there is no
 alternative site on which to place such home.
   (f) Under current law, manufactured homeowners who rent lots in  manu-
 factured home parks have no legal remedy for an unjustifiable and unrea-
 sonable rent increase.
   (g)  It  is  the  purpose  of this legislation to provide manufactured
 homeowners with a judicial remedy  when  they  are  confronted  with  an
 unjustifiable rent increase.
   §  2. Subdivision e of section 233 of the real property law is amended
 by adding a new paragraph 4 to read as follows:
   4. ALL RENT INCREASES, INCLUDING ALL FEES, RENTS, CHARGES, ASSESSMENTS
 AND UTILITIES, SHALL  BE  SUBJECT  TO  JUDICIAL  CHALLENGE  PURSUANT  TO
 SECTION  TWO  HUNDRED  THIRTY-THREE-B  OF  THIS ARTICLE FOR MANUFACTURED
 HOMEOWNERS.
   § 3. Paragraph 2 of subdivision g of section 233 of the real  property
 law,  as  amended by chapter 566 of the laws of 1996, is amended to read
 as follows:
   2. A manufactured home park owner or operator  shall  be  required  to
 fully  disclose  in  writing  all  fees, charges, assessments, including
 rental fees, rules and regulations prior to [a manufactured home  tenant
 assuming  occupancy] ENTERING INTO A RENTAL AGREEMENT WITH A PROSPECTIVE
 TENANT in the manufactured home park.
   § 4. The real property law is amended by adding a new section 233-b to
 read as follows:
   § 233-B. UNJUSTIFIED RENT INCREASES IN MANUFACTURED HOME  PARKS.    1.
 LOCAL  OPTION.  THE PROVISIONS OF THIS SECTION SHALL APPLY IN ANY COUNTY
 IN WHICH THE GOVERNING BOARD OF SUCH  COUNTY  HAS  PASSED  A  LOCAL  LAW
 ADOPTING THE PROVISIONS OF THIS SECTION.
   2.  SCOPE. TO BE ELIGIBLE FOR THIS REMEDY, THE OWNERS OF AT LEAST FIVE
 PERCENT (5%) OF THE MANUFACTURED HOMES AFFECTED BY THE INCREASE IN  RENT
 WITHIN THE MANUFACTURED HOME PARK SHALL BE PETITIONERS. THE MANUFACTURED
 HOME SHALL BE THE PRIMARY RESIDENCE OF EACH PETITIONER.
   3.  PRIMA FACIE CASE. AN INCREASE IN RENT WHICH EXCEEDS THE PERCENTAGE
 INCREASE IN THE CONSUMER PRICE INDEX SINCE THE CURRENT LOT  RENT  BECAME
 EFFECTIVE  MAY  BE  CHALLENGED BY AN AGGRIEVED MANUFACTURED HOMEOWNER AS
 UNJUSTIFIED. THE TERM "CONSUMER PRICE INDEX" MEANS THE  INDEX  PUBLISHED
 MONTHLY  BY  THE  UNITED  STATES  DEPARTMENT  OF  LABOR, BUREAU OF LABOR
 STATISTICS, FOR  THE  APPLICABLE  NEW  YORK  REGION.  IN  THIS  SECTION,
 "INCREASE  IN  LOT  RENT"  INCLUDES  ALL  COST  INCREASES, INCLUDING ALL
 INCREASED RENT, FEES, CHARGES, ASSESSMENTS AND UTILITIES.
   4. JOINDER. MULTIPLE AGGRIEVED MANUFACTURED HOMEOWNERS MAY JOIN IN THE
 SAME ACTION WHERE THERE IS A COMMON QUESTION OF LAW OR FACT.
   5. VENUE AND STATUTE OF LIMITATION. WITHIN NINETY DAYS OF  THE  NOTICE
 OF  THE PROPOSED INCREASE, AN AGGRIEVED MANUFACTURED HOMEOWNER MAY CHAL-
 LENGE SUCH INCREASE BY FILING AN ACTION IN THE  COUNTY  WHERE  THE  REAL
 PROPERTY  IS  LOCATED  SEEKING  A  DECLARATORY  JUDGMENT  THAT  THE RENT
 INCREASE IS UNJUSTIFIABLE.
   6. PRESUMPTION.  IN ANY PROCEEDINGS UNDER THIS SECTION THERE SHALL  BE
 AN IRREBUTTABLE PRESUMPTION THAT A RENT INCREASE IS JUSTIFIABLE WHEN THE
 AMOUNT  OF  SUCH INCREASE DOES NOT EXCEED THE TENANT'S PRO-RATA SHARE IN
 OPERATING COSTS AND PROPERTY TAXES FOR THE  MANUFACTURED  HOME  PARK  IN
 WHICH THE TENANT RESIDES.

 S. 5436                             3

   7.  STANDARD FOR JUDICIAL REVIEW.  IN DETERMINING WHETHER THE PROPOSED
 RENT INCREASE IS UNJUSTIFIABLE, THE COURT SHALL CONSIDER:
   (A)   INCREASES  IN  THE  MANUFACTURED  HOME  PARK  OWNER'S  OPERATING
 EXPENSES.
   (B) INCREASES IN THE MANUFACTURED HOME PARK OWNER'S PROPERTY TAXES  ON
 SUCH PARK.
   (C) INCREASES IN THE COST OF DEBT SERVICE WHICH IS DIRECTLY RELATED TO
 ACQUISITION OR CAPITAL IMPROVEMENTS IN THE MANUFACTURED HOME PARK.
   (D) THE RETURN ON THE MANUFACTURED HOME PARK OWNER'S EQUITY INVESTMENT
 OVER  THE  PAST  THREE  YEARS,  AND THE REASONS OFFERED BY THE OWNER FOR
 SEEKING AN INCREASE IN THE RETURN ON HIS OR HER INVESTMENT.
   (E) A SAMPLING OF CURRENT LOT RENTS IN THE REGION IN WHICH THE PARK IS
 LOCATED.
   (F) ANY OTHER COSTS ASSERTED BY THE MANUFACTURED HOME PARK OWNER WHICH
 ARE RELEVANT AND PROBATIVE OF THE NEED FOR AN INCREASE.
   8. CONDITIONAL APPROVAL. THE COURT MAY CONDITION ITS APPROVAL  OF  ANY
 JUSTIFIED  INCREASE  UPON  THE REDRESS OF CONDITIONS IN THE MANUFACTURED
 HOME PARK WHICH THREATEN THE HEALTH AND SAFETY OF THE MANUFACTURED  HOME
 PARK TENANTS.
   9.  ESCROW.    WHILE  A  CHALLENGE TO A RENT INCREASE PURSUANT TO THIS
 SECTION IS PENDING, MANUFACTURED HOME PARK TENANTS SHALL PAY THE  AMOUNT
 OF THE RENT INCREASE TO THE MANUFACTURED HOME PARK OWNER, WHO SHALL HOLD
 SUCH  AMOUNTS IN ESCROW PENDING A MEDIATED AGREEMENT BETWEEN THE PARTIES
 OR A FINAL DECISION FROM THE COURT, PROVIDED, HOWEVER, THAT NO  MANUFAC-
 TURED  HOME  PARK  TENANT  SHALL  BE EVICTED FOR NON-PAYMENT OF THE RENT
 INCREASE PRIOR TO A FINAL DISPOSITION OF THE MATTER BY THE COURT IN  THE
 COUNTY WHERE THE MANUFACTURED HOME PARK IS LOCATED. FAILURE BY THE MANU-
 FACTURED  HOME  PARK  OWNER  TO  PLACE  SUCH CHALLENGED RENT INCREASE IN
 ESCROW SHALL BE PUNISHABLE BY A CIVIL PENALTY  OF  NOT  MORE  THAN  FIVE
 HUNDRED  DOLLARS.  IF THE PETITIONERS APPEAL, THE MANUFACTURED HOME PARK
 OWNER MAY REMOVE THE RENT INCREASE FUNDS FROM ESCROW, MINGLE SUCH  FUNDS
 WITH  ANY  OTHER FUNDS, AND EVICT A TENANT WHO HAS NOT PAID THE INCREASE
 FOR NON-PAYMENT OF RENT. IF THE COURT ENTERS A FINAL JUDGMENT  DECLARING
 THE  RENT  INCREASES OR ANY PART THEREOF UNJUSTIFIABLE, THE MANUFACTURED
 HOME PARK OWNER SHALL REFUND THE AMOUNT  OF  UNJUSTIFIABLE  INCREASE  TO
 EACH TENANT HOUSEHOLD.
   §  5.  This  act shall take effect on the thirtieth day after it shall
 have become a law.