NY State Senate Bill 2019-S5862

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to housing, construction and community development
May 15, 2019	referred to housing, construction and community development

co-Sponsors

2019-S5862 (ACTIVE) - Details

See Assembly Version of this Bill:: A7737
Current Committee:: Senate Housing, Construction And Community Development
Law Section:: New York City Administrative Code
Laws Affected:: Amd §26-516, NYC Ad Cd; amd §12, Emerg Ten Prot Act of 1974

2019-S5862 (ACTIVE) - Summary

Provides that neither an adjustment of rent nor a refund by an owner after the service of an overcharge complaint shall be a basis upon which the state division of housing and community renewal may determine that the overcharge was not willful.

2019-S5862 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S5862

SPONSOR: JACKSON
 
TITLE OF BILL:  An act to amend the administrative code of the city of
New York and the emergency tenant protection act of nineteen seventy-
four, in relation to the determination of whether an overcharge of rent
is willful

 
PURPOSE:

Preserving key enforcement provisions of rent stabilization laws
pertaining to willful rent overcharges

 
SUMMARY OF PROVISIONS:

The bill would bar landlords, once a rent overcharge complaint is filed
with HCR, from avoiding penalties for willfully overcharging tenants by
simply refunding the overcharge.

 
JUSTIFICATION:

As a means to achieve compliance, the rent stabilization laws impose
penalties on owners who willfully overcharge tenants, in the form of
treble damages, and further provide a statutory presumption of willful-
ness unless an owner can demonstrate otherwise.

Unfortunately, the division of Housing and Community Renewal (HCR) has -
for the past 30 years - had in place a stated policy that if a tenant
files a rent overcharge complaint but the owner subsequently refunds the
overcharge, no treble penalties will be imposed. This policy, which is
not a formal regulation promulgated through the normal administrative
procedures for inclusion in the rent stabilization code, but rather
simply adopted by agency fiat as "Policy Statement 89-2," has functioned
to completely undercut the prohibitions against rent overcharges.

The effect of Policy Statement 89-2 - essentially a "get out of jail
free" card - is that it eliminates the disincentive to unscrupulous
owners from overcharging tenants in violation of the law, since in the
unlikely instance that they are caught they can avoid all penalties by
just refunding the overcharge. This is analogous to a hypothetical crim-
inal law provision that persons who are arrested for theft but who
return the stolen property before trial will face no consequences; such
a provision would only serve to encourage theft.

The proposed amendment would bar HCR from relying on the refund of the
overcharge or adjustment of the rent as a basis, standing alone, for
negating the existing statutory presumption of willfulness.

The proposed amendment would in no way diminish the existing provision
that owners may overcome the presumption of willfulness in other ways,
such as mistake or an oversight.

 
LEGISLATIVE HISTORY:

New bill.

STATE AND LOCAL FISCAL IMPLICATIONS:

None.
 
EFFECTIVE DATE:
This act shall take effect immediately; provided that the amendments to
section 26-516 of chapter 4 of title 26 of the administrative code of
the city of New York made by section one of this act shall expire on the
same date as such law expires and shall not affect the expiration of
such law as provided under section 26-520 of such law; and provided that
the amendments to section 12 of section 4 of the emergency tenant
protection act of nineteen seventy-four made by section two of this act
shall expire on the same date as such act expires and shall not affect
the expiration of such act as provided in section 17 of chapter 576 of
the laws of 1974.

2019-S5862 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5862
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 15, 2019
                                ___________
 
 Introduced  by  Sen. JACKSON -- 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 administrative code of the city of New York and the
   emergency tenant protection act of nineteen seventy-four, in  relation
   to the determination of whether an overcharge of rent is willful
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The opening paragraph of subdivision a of section 26-516 of
 the administrative code of the city of New York, as amended  by  chapter
 116 of the laws of 1997, is amended to read as follows:
   Subject  to  the  conditions  and limitations of this subdivision, any
 owner of housing accommodations who, upon complaint of a tenant,  or  of
 the  state  division  of  housing and community renewal, is found by the
 state division of housing and  community  renewal,  after  a  reasonable
 opportunity  to be heard, to have collected an overcharge above the rent
 authorized for a housing accommodation subject to this chapter shall  be
 liable  to  the  tenant for a penalty equal to three times the amount of
 such overcharge. In  no  event  shall  such  treble  damage  penalty  be
 assessed against an owner based solely on said owner's failure to file a
 timely  or  proper initial or annual rent registration statement. If the
 owner establishes by a preponderance of the evidence that the overcharge
 was not willful, the state division of  housing  and  community  renewal
 shall  establish the penalty as the amount of the overcharge plus inter-
 est. NEITHER THE ADJUSTMENT OF THE RENT OR A REFUND BY  AN  OWNER  AFTER
 THE  SERVICE  OF AN OVERCHARGE COMPLAINT SHALL BE A BASIS UPON WHICH THE
 STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL MAY DETERMINE  THAT  THE
 OVERCHARGE  WAS  NOT WILLFUL. (i) Except as to complaints filed pursuant
 to clause (ii) of this paragraph, the legal regulated rent for  purposes
 of  determining an overcharge, shall be the rent indicated in the annual
 registration statement filed four years prior to the most recent  regis-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD11538-01-9

 S. 5862                             2
 
 tration statement, (or, if more recently filed, the initial registration
 statement) plus in each case any subsequent lawful increases and adjust-
 ments.  Where  the amount of rent set forth in the annual rent registra-
 tion  statement  filed  four years prior to the most recent registration
 statement is not challenged within four years  of  its  filing,  neither
 such  rent nor service of any registration shall be subject to challenge
 at any time thereafter.  (ii) As to complaints filed within ninety  days
 of  the initial registration of a housing accommodation, the legal regu-
 lated rent shall be deemed to be the rent charged on the date four years
 prior to the date of the initial registration of  the  housing  accommo-
 dation (or, if the housing accommodation was subject to this chapter for
 less  than  four  years,  the initial legal regulated rent) plus in each
 case, any lawful increases and adjustments. Where the  rent  charged  on
 the date four years prior to the date of the initial registration of the
 accommodation  cannot  be established, such rent shall be established by
 the division.
   § 2. The opening paragraph of paragraph 1 of subdivision a of  section
 12  of  section  4  of chapter 576 of the laws of 1974, constituting the
 emergency tenant protection act of nineteen seventy-four, as amended  by
 chapter 116 of the laws of 1997, is amended to read as follows:
   Subject to the conditions and limitations of this paragraph, any owner
 of housing accommodations in a city having a population of less than one
 million  or a town or village as to which an emergency has been declared
 pursuant to section three, who, upon complaint of a  tenant  or  of  the
 state  division  of housing and community renewal, is found by the state
 division of housing and community renewal, after a  reasonable  opportu-
 nity to be heard, to have collected an overcharge above the rent author-
 ized  for a housing accommodation subject to this act shall be liable to
 the tenant for a penalty equal to three times the amount of  such  over-
 charge. In no event shall such treble damage penalty be assessed against
 an owner based solely on said owner's failure to file a proper or timely
 initial  or annual rent registration statement. If the owner establishes
 by a preponderance of the evidence that the overcharge was neither will-
 ful nor attributable to his negligence, the state  division  of  housing
 and  community  renewal shall establish the penalty as the amount of the
 overcharge plus interest at the rate of interest payable on  a  judgment
 pursuant  to  section  five  thousand four of the civil practice law and
 rules. NEITHER THE ADJUSTMENT OF THE RENT OR A REFUND BY AN OWNER  AFTER
 THE  SERVICE  OF AN OVERCHARGE COMPLAINT SHALL BE A BASIS UPON WHICH THE
 STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL MAY DETERMINE  THAT  THE
 OVERCHARGE  WAS  NOT WILLFUL. (i) Except as to complaints filed pursuant
 to clause (ii) of this paragraph, the legal regulated rent for  purposes
 of  determining  an overcharge, shall be deemed to be the rent indicated
 in the annual registration statement filed four years prior to the  most
 recent  registration statement, (or, if more recently filed, the initial
 registration  statement)  plus  in  each  case  any  subsequent   lawful
 increases  and  adjustments.  Where  the amount of rent set forth in the
 annual rent registration statement filed four years prior  to  the  most
 recent registration statement is not challenged within four years of its
 filing,  neither  such  rent  nor  service  of any registration shall be
 subject to challenge at any time thereafter. (ii) As to complaints filed
 within ninety days of the initial registration  of  a  housing  accommo-
 dation,  the  legal  regulated rent for purposes of determining an over-
 charge shall be deemed to be the rent charged on  the  date  four  years
 prior  to  the  date of the initial registration of the housing accommo-
 dation (or, if the housing accommodation was subject  to  this  act  for

 S. 5862                             3
 
 less  than  four  years,  the initial legal regulated rent) plus in each
 case, any lawful increases and adjustments. Where the  rent  charged  on
 the date four years prior to the date of the initial registration of the
 accommodation  cannot  be established, such rent shall be established by
 the division. Where the amount of rent set  forth  in  the  annual  rent
 registration  statement filed four years prior to the most recent regis-
 tration statement is not challenged within four  years  of  its  filing,
 neither  such  rent  nor service of any registration shall be subject to
 challenge at any time thereafter.
   § 3. This act shall take effect immediately; provided that the  amend-
 ments  to  section 26-516 of chapter 4 of title 26 of the administrative
 code of the city of New York made by  section  one  of  this  act  shall
 expire  on  the  same  date as such law expires and shall not affect the
 expiration of such law as provided under section 26-520 of such law; and
 provided that the amendments to section 12 of section 4 of the emergency
 tenant protection act of nineteen seventy-four made by  section  two  of
 this act shall expire on the same date as such act expires and shall not
 affect  the  expiration of such act as provided in section 17 of chapter
 576 of the laws of 1974.

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Senate Bill S5862

Sponsored By

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

co-Sponsors

2019-S5862 (ACTIVE) - Details

2019-S5862 (ACTIVE) - Summary

2019-S5862 (ACTIVE) - Sponsor Memo

2019-S5862 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S5862

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Sponsored By

Robert Jackson

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

co-Sponsors

Julia Salazar

2019-S5862 (ACTIVE) - Details

2019-S5862 (ACTIVE) - Summary

2019-S5862 (ACTIVE) - Sponsor Memo

2019-S5862 (ACTIVE) - Bill Text download pdf

Comments