S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8431--A
 
                             I N  S E N A T E
 
                               May 29, 2020
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee  on  Judiciary  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the real property law, in relation to establishing secu-
   rity  deposit  options  for  certain  tenants; and to amend the public
   housing law, in relation to establishing the security deposit  guaran-
   tee program
 
   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
 238-b to read as follows:
   §  238-B.  SECURITY  DEPOSIT.  1.  A  LANDLORD WHO REQUIRES A SECURITY
 DEPOSIT TO BE PAID BY A TENANT WHICH IS COVERED  BY  THE  PROVISIONS  OF
 SECTION  7-108  OF  THE  GENERAL OBLIGATIONS LAW, AT THE REQUEST OF SUCH
 TENANT, SHALL OFFER TO ACCEPT AT LEAST ONE OF THE FOLLOWING  OPTIONS  IN
 LIEU OF SUCH SECURITY DEPOSIT:
   A.  RENTAL  SECURITY  INSURANCE, DEFINED AS A SURETY BOND OR INSURANCE
 POLICY ISSUED BY A LICENSED CARRIER IN THE STATE OF NEW YORK THAT  GUAR-
 ANTEES  OR  INDEMNIFIES A TENANT AFTER DEFAULT OF A FINANCIAL OBLIGATION
 UNDER THE RENTAL AGREEMENT, THAT SATISFIES THE FOLLOWING CRITERIA:
   (I) THE INSURANCE PROVIDER IS AN  APPROVED  CARRIER  LICENSED  BY  THE
 DEPARTMENT  OF  FINANCIAL  SERVICES  PURSUANT  TO  ARTICLE ELEVEN OF THE
 INSURANCE LAW;
   (II) THE COVERAGE IS EFFECTIVE UPON THE PAYMENT OF THE  FIRST  PREMIUM
 OR FEE AND REMAINS EFFECTIVE FOR THE ENTIRE LEASE TERM; AND
   (III)  THE COVERAGE PROVIDED PER CLAIM IS NO LESS THAN THE AMOUNT SUCH
 LANDLORD REQUIRES FOR SECURITY DEPOSITS;
   B. PAYMENT OF ANY SECURITY DEPOSIT OVER A SERIES OF NO LESS  THAN  SIX
 EQUAL  MONTHLY INSTALLMENTS PAYMENTS, WHICH INSTALLMENTS SHALL BE DUE ON
 THE SAME DAY AS THE MONTHLY RENT PAYMENT AND WHICH MAY BE PAID  TOGETHER
 WITH THE MONTHLY RENT PAYMENT IN A SINGLE TRANSACTION, ABSENT A SEPARATE
 AGREEMENT BETWEEN SUCH LANDLORD AND TENANT;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD15573-02-0

 S. 8431--A                          2
 
   C.  PAYMENT  OF A REDUCED SECURITY DEPOSIT WHICH SHALL BE NO MORE THAN
 FIFTY PERCENT OF THE AMOUNT OF ONE MONTH'S RENT UNDER SUCH CONTRACT; OR
   D.  IF SUCH TENANT QUALIFIES, PAYMENT OF ANY DEPOSIT THROUGH THE SECU-
 RITY DEPOSIT GUARANTEE PROGRAM ESTABLISHED BY SECTION FOURTEEN-A OF  THE
 PUBLIC HOUSING LAW.
   2.  A TENANT WHO ELECTS TO PROVIDE RENTAL SECURITY INSURANCE, PURSUANT
 TO PARAGRAPH A OF SUBDIVISION ONE OF THIS SECTION, IN LIEU OF A REQUIRED
 SECURITY DEPOSIT SHALL NOT BE REQUIRED TO PROVIDE ADDITIONAL SECURITY OR
 INSURANCE COVERAGE PER CLAIM  IN  AN  AMOUNT  GREATER  THAN  THE  AMOUNT
 REQUIRED FOR THE SECURITY DEPOSIT.
   3. SUCH LANDLORD SHALL NOT IMPOSE ANY ADDITIONAL FEES OR INTEREST ON A
 TENANT  THAT  PAYS  HIS  OR  HER SECURITY DEPOSIT IN AN ALTERNATE MANNER
 PURSUANT TO SUBDIVISION ONE OF THIS SECTION.
   4. ANY AGREEMENT TO PAY A SECURITY DEPOSIT IN  INSTALLMENTS  SHALL  BE
 INCLUDED  WITHIN SUCH CONTRACT, LEASE OR AGREEMENT AND SHALL SPECIFY THE
 TOTAL DEPOSIT AMOUNT DUE AND THE AMOUNT DUE FOR EACH INSTALLMENT.
   5. PRIOR TO ENTERING INTO A CONTRACT,  LEASE  OR  RENTAL  AGREEMENT  A
 LANDLORD  SHALL PROVIDE THE TENANT WRITTEN NOTICE OF THE AVAILABLE SECU-
 RITY DEPOSIT ALTERNATIVES AND INCLUDE  THE  FOLLOWING  LANGUAGE:  "IF  A
 SECURITY  DEPOSIT IS REQUIRED, TENANT HAS THE RIGHT TO REQUEST AND LAND-
 LORD IS REQUIRED TO ACCEPT ONE OF THE FOLLOWING  FOUR  ALTERNATIVES:  A.
 RENTAL SECURITY INSURANCE; B. A DEPOSIT PAID OVER NO LESS THAN SIX EQUAL
 MONTHLY  INSTALLMENTS; C. A ONE-TIME REDUCED SECURITY DEPOSIT PAYMENT OF
 NO MORE THAN FIFTY PERCENT OF THE MONTHLY RENTAL RATE  CHARGED  FOR  THE
 RENTAL  UNIT;  OR IF SUCH TENANT QUALIFIES D. A DEPOSIT PAID THROUGH THE
 SECURITY DEPOSIT GUARANTEE PROGRAM. TENANT  SHALL  NOT  BE  REQUIRED  TO
 PROVIDE RENTAL SECURITY INSURANCE COVERAGE PER CLAIM IN AN AMOUNT GREAT-
 ER THAN THE AMOUNT REQUIRED FOR THE SECURITY DEPOSIT".
   § 2. The public housing law is amended by adding a new section 14-a to
 read as follows:
   § 14-A. THE SECURITY DEPOSIT GUARANTEE PROGRAM. 1. (A) THE COMMISSION-
 ER  SHALL  ESTABLISH  WITHIN  AVAILABLE APPROPRIATIONS, AND ADMINISTER A
 SECURITY DEPOSIT GUARANTEE PROGRAM FOR ANY PERSON WHO:
   (I) (A) IS A  RECIPIENT  OF:  THE  SUPPLEMENTAL  NUTRITION  ASSISTANCE
 PROGRAM  PURSUANT  TO  SECTION  NINETY-FIVE  OF THE SOCIAL SERVICES LAW,
 SAFETY NET ASSISTANCE PURSUANT TO TITLE THREE OF  ARTICLE  FIVE  OF  THE
 SOCIAL  SERVICES  LAW,  OR  ANY OTHER QUALIFYING FEDERAL OR STATE PUBLIC
 ASSISTANCE PROGRAM AS DETERMINED BY THE COMMISSIONER;
   (B) HAS A DOCUMENTED SHOWING OF FINANCIAL NEED; AND
   (II)(A) IS RESIDING IN AN EMERGENCY SHELTER OR HOMELESS HOUSING ESTAB-
 LISHED UNDER ARTICLE TWO-A OF THE SOCIAL SERVICES LAW; OR
   (B) HAVE A CERTIFICATION, VOUCHER OR ALLOWANCE FROM THE PUBLIC ASSIST-
 ANCE SHELTER ALLOWANCE ESTABLISHED BY SECTION ONE  HUNDRED  THIRTY-ONE-A
 OF  THE  SOCIAL  SERVICES  LAW,  THE  FEDERAL  SECTION 8 HOUSING VOUCHER
 PROGRAM OR THE SECTION 8 HOUSING CERTIFICATE PROGRAM (42 U.S.C. 1437  ET
 SEQ.).
   (B) THE COMMISSIONER SHALL PROVIDE SECURITY DEPOSIT GUARANTEES FOR USE
 BY  SUCH  PERSONS  IN  LIEU  OF A SECURITY DEPOSIT ON RESIDENTIAL RENTAL
 PROPERTY OR RENTAL DWELLING UNIT.
   (C) ELIGIBLE PERSONS SHALL RECEIVE A SECURITY DEPOSIT GUARANTEE IN  AN
 AMOUNT NOT TO EXCEED THE EQUIVALENT OF ONE MONTH'S RENT ON SUCH RESIDEN-
 TIAL RENTAL PROPERTY OR RENTAL DWELLING UNIT.
   (D) NO PERSON SHALL APPLY FOR AND RECEIVE A SECURITY DEPOSIT GUARANTEE
 MORE THAN ONCE IN ANY EIGHTEEN-MONTH PERIOD WITHOUT THE EXPRESS AUTHORI-
 ZATION  OF  THE  COMMISSIONER,  EXCEPT AS PROVIDED IN SUBDIVISION TWO OF
 THIS SECTION.

 S. 8431--A                          3
 
   2. (A) IN THE CASE OF A PERSON WHO  QUALIFIES  FOR  A  GUARANTEE,  THE
 COMMISSIONER  OR  ANY  LOCAL OR REGIONAL NONPROFIT CORPORATION OR SOCIAL
 SERVICE ORGANIZATION UNDER CONTRACT WITH THE  DIVISION  OF  HOUSING  AND
 COMMUNITY RENEWAL TO ASSIST IN THE ADMINISTRATION OF THE SECURITY DEPOS-
 IT  PROGRAM  ESTABLISHED  PURSUANT  TO  SUBDIVISION ONE OF THIS SECTION,
 SHALL EXECUTE A WRITTEN AGREEMENT TO PAY THE LANDLORD  FOR  ANY  DAMAGES
 SUFFERED BY THE LANDLORD DUE TO THE TENANT'S FAILURE TO COMPLY WITH SUCH
 TENANT'S  OBLIGATIONS  PURSUANT TO THE CONTRACT FOR USE OR RENTAL OF THE
 RESIDENTIAL RENTAL PROPERTY OR RENTAL DWELLING UNIT, PROVIDED THE AMOUNT
 OF ANY SUCH PAYMENT SHALL NOT EXCEED THE AMOUNT OF THE REQUESTED SECURI-
 TY DEPOSIT.
   (B) NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION,
 IF A PERSON WHO HAS PREVIOUSLY RECEIVED A GRANT FOR A  SECURITY  DEPOSIT
 OR  A SECURITY DEPOSIT GUARANTEE BECOMES ELIGIBLE FOR A SUBSEQUENT SECU-
 RITY DEPOSIT GUARANTEE WITHIN EIGHTEEN MONTHS AFTER  A  CLAIM  HAS  BEEN
 PAID  ON  A  PRIOR SECURITY DEPOSIT GUARANTEE, SUCH PERSON MAY RECEIVE A
 SECURITY DEPOSIT GUARANTEE. THE AMOUNT OF THE SUBSEQUENT SECURITY DEPOS-
 IT GUARANTEE FOR WHICH SUCH PERSON WOULD OTHERWISE  HAVE  BEEN  ELIGIBLE
 SHALL  BE  REDUCED  BY ANY AMOUNT OF A PREVIOUS GRANT WHICH HAS NOT BEEN
 RETURNED TO THE DEPARTMENT PURSUANT TO THIS SECTION, OR  THE  AMOUNT  OF
 ANY PAYMENT MADE TO THE LANDLORD FOR DAMAGES PURSUANT TO THIS SECTION.
   3.  ANY  PAYMENT  MADE  PURSUANT TO THIS SECTION TO A PERSON RECEIVING
 ASSISTANCE PURSUANT TO ANY FEDERAL, STATE OR LOCAL PROGRAM SHALL NOT  BE
 DEDUCTED  FROM  THE  AMOUNT  OF  ASSISTANCE TO WHICH THE RECIPIENT WOULD
 OTHERWISE BE ENTITLED UNDER SUCH PROGRAM.
   4. THE COMMISSIONER MAY, WITHIN AVAILABLE APPROPRIATIONS, ON  A  CASE-
 BY-CASE BASIS, PROVIDE A SECURITY DEPOSIT GRANT TO A PERSON ELIGIBLE FOR
 THE  SECURITY DEPOSIT GUARANTEE PROGRAM ESTABLISHED PURSUANT TO SUBDIVI-
 SION ONE OF THIS SECTION, IN AN AMOUNT NOT TO EXCEED THE  EQUIVALENT  OF
 ONE  MONTH'S RENT ON SUCH RESIDENTIAL RENTAL PROPERTY OR RENTAL DWELLING
 UNIT, PROVIDED THE COMMISSIONER DETERMINES THAT EMERGENCY  CIRCUMSTANCES
 EXIST  WHICH  THREATEN  THE  HEALTH,  SAFETY  OR  WELFARE OF A CHILD WHO
 RESIDES WITH SUCH PERSON. SUCH PERSON SHALL NOT  BE  ELIGIBLE  FOR  MORE
 THAN  ONE  SUCH  GRANT  WITHOUT  THE AUTHORIZATION OF SAID COMMISSIONER.
 NOTHING IN THIS SECTION SHALL PRECLUDE THE APPROVAL  OF  SUCH  ONE-MONTH
 SECURITY  DEPOSIT GRANT IN CONJUNCTION WITH A ONE-MONTH SECURITY DEPOSIT
 GUARANTEE.
   5. NOTHING IN THIS SECTION SHALL PRECLUDE THE COMMISSIONER FROM ENTER-
 ING INTO A CONTRACT WITH ONE OR MORE LOCAL  OR  REGIONAL  NOT-FOR-PROFIT
 CORPORATIONS  OR SOCIAL SERVICE ORGANIZATIONS FOR THE PURPOSE OF ISSUING
 SECURITY DEPOSIT GUARANTEES PURSUANT TO THIS SECTION.
   6. A LANDLORD SHALL SUBMIT A CLAIM FOR DAMAGES NOT LATER  THAN  FORTY-
 FIVE DAYS AFTER THE DATE OF TERMINATION OF THE TENANCY. PAYMENT SHALL BE
 MADE  ONLY FOR A CLAIM THAT INCLUDES RECEIPTS FOR REPAIRS MADE. NO CLAIM
 SHALL BE PAID FOR A DWELLING UNIT FROM WHICH A  TENANT  VACATED  BECAUSE
 SUBSTANDARD  CONDITIONS MADE SUCH DWELLING UNIT UNINHABITABLE, AS DETER-
 MINED BY A LOCAL, STATE OR FEDERAL REGULATORY AGENCY.
   7. ANY PERSON WHO IS FOUND ELIGIBLE  TO  RECEIVE  A  SECURITY  DEPOSIT
 GUARANTEE  UNDER  THIS  SECTION AND FOR WHOM THE COMMISSIONER HAS PAID A
 CLAIM BY A LANDLORD, SHALL CONTRIBUTE FIVE PERCENT OF ONE  MONTH'S  RENT
 UNDER  SUCH CONTRACT TO THE PAYMENT OF THE SECURITY DEPOSIT. THE COMMIS-
 SIONER MAY WAIVE SUCH PAYMENT FOR GOOD CAUSE.
   8. THE COMMISSIONER SHALL PROMULGATE RULES AND REGULATIONS, TO  ADMIN-
 ISTER THE PROGRAM ESTABLISHED PURSUANT TO THIS SECTION AND TO SET ELIGI-
 BILITY CRITERIA FOR SUCH PROGRAM.

 S. 8431--A                          4
 
   § 3. This act shall take effect on the one hundred twentieth day after
 it  shall have become a law. Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be  made  and
 completed on or before such effective date.