Senate Bill S2001A

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2001--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 16, 2021
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary  --  recommitted
   to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8
   --  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
 SECTIONS 7-107 AND 7-108 OF THE GENERAL OBLIGATIONS LAW  SHALL  ALSO  BE
 REQUIRED  TO  OFFER  TO  ACCEPT AT LEAST ONE OF THE FOLLOWING OPTIONS IN
 LIEU OF SUCH SECURITY DEPOSIT:
   A. PAYMENT OF ANY SECURITY DEPOSIT OVER A SERIES OF NO LESS  THAN  SIX
 EQUAL  MONTHLY  INSTALLMENT 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;
   B.  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
   C. 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. IN ADDITION TO THE OPTIONS IN SUBDIVISION ONE OF  THIS  SECTION  IN
 LIEU OF A SECURITY DEPOSIT, A LANDLORD MAY ACCEPT RENTAL SECURITY INSUR-
 ANCE,  DEFINED  AS  A  SURETY BOND   OR   INSURANCE POLICY   ISSUED BY A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02329-06-2
              

 S. 2001--A                          2
 
 LICENSED CARRIER IN THE STATE OF NEW YORK THAT GUARANTEES OR INDEMNIFIES
 A TENANT AFTER DEFAULT OF A   FINANCIAL   OBLIGATION  UNDER  THE  RENTAL
 AGREEMENT.  IF  THE  LANDLORD WISHES TO OFFER OR SUGGEST RENTAL SECURITY
 INSURANCE  THAT  IS PROVIDED BY ITSELF OR A SEPARATE COMPANY, THE RENTAL
 SECURITY INSURANCE OFFERED MUST SATISFY THE FOLLOWING CRITERIA:
   A. THE  INSURANCE  PROVIDER  IS  AN APPROVED CARRIER LICENSED  BY  THE
 DEPARTMENT  OF FINANCIAL SERVICES  PURSUANT  TO  ARTICLE  ELEVEN  OF THE
 INSURANCE LAW;
   B. THE  COVERAGE IS EFFECTIVE UPON THE PAYMENT OF THE FIRST PREMIUM OR
 FEE AND REMAINS EFFECTIVE FOR THE ENTIRE LEASE TERM;
   C. ANY DISPUTE UNDER THE COVERAGE CANNOT REQUIRE ARBITRATION AND WAIVE
 THE TENANT'S RIGHT TO GO TO COURT;
   D. THE AMOUNT PAID BY THE TENANT  CANNOT  EXCEED  THE  AMOUNT  OF  THE
 COVERAGE;
   E.  THE  TENANT  CANNOT  BE  LIABLE  TO THE INSURANCE PROVIDER FOR ANY
 CLAIMS PAID OUT TO THE LANDLORD; AND
   F. THE COVERAGE PROVIDED PER CLAIM IS NO LESS THAN THE  AMOUNT    SUCH
 LANDLORD REQUIRES FOR SECURITY DEPOSITS.
   3.  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.
   4. SUCH LANDLORD SHALL NOT IMPOSE ANY ADDITIONAL FEES OR INTEREST ON A
 TENANT  THAT PAYS THEIR SECURITY DEPOSIT IN AN ALTERNATE MANNER PURSUANT
 TO SUBDIVISION ONE OF THIS SECTION.
   5. 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.
   6. 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 THREE ALTERNATIVES: A. A
 DEPOSIT PAID OVER NO LESS THAN SIX  EQUAL  MONTHLY  INSTALLMENTS;  B.  A
 ONE-TIME  REDUCED SECURITY DEPOSIT PAYMENT OF NO MORE THAN FIFTY PERCENT
 OF THE MONTHLY RENTAL RATE CHARGED FOR THE RENTAL UNIT; OR  C.  IF  SUCH
 TENANT  QUALIFIES, A DEPOSIT PAID THROUGH THE SECURITY DEPOSIT GUARANTEE
 PROGRAM. TENANT SHALL NOT BE REQUIRED TO PROVIDE RENTAL SECURITY  INSUR-
 ANCE  COVERAGE  PER  CLAIM IN AN AMOUNT GREATER THAN THE AMOUNT REQUIRED
 FOR THE SECURITY DEPOSIT".
   7. THE REQUIREMENTS OF THIS SECTION  SHALL  BE  CONSIDERED  SOURCE  OF
 INCOME AS DEFINED BY SUBDIVISION THIRTY-SIX OF SECTION TWO HUNDRED NINE-
 TY-TWO  OF  THE EXECUTIVE LAW AND ANY VIOLATION OF THIS SECTION MAY BE A
 VIOLATION OF SECTION TWO HUNDRED NINETY-SIX OF THE EXECUTIVE LAW.
   § 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
 S. 2001--A                          3
 
   (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.
   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 AND THAT THE LANDLORD COMPLIES WITH SECTIONS 7-107 AND 7-108
 OF THE GENERAL OBLIGATIONS LAW.
   (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.  A SECURITY DEPOSIT GUARANTEE OR GRANT SHALL BE CONSIDERED A SOURCE
 OF INCOME AS DEFINED BY SUBDIVISION THIRTY-SIX OF  SECTION  TWO  HUNDRED
 NINETY-TWO  OF  THE  EXECUTIVE LAW AND REFUSAL BY A LANDLORD TO ACCEPT A
 SECURITY DEPOSIT GUARANTEE OR GRANT SHALL BE A VIOLATION OF SECTION  TWO
 HUNDRED NINETY-SIX OF THE EXECUTIVE LAW.
   4.  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.
   5. 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
 S. 2001--A                          4
 
 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.
   6. 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.
   7.  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 AND  PROOF
 THAT  THE LANDLORD COMPLIED WITH SECTIONS 7-107 AND 7-108 OF THE GENERAL
 OBLIGATIONS LAW. NO CLAIM SHALL BE PAID FOR A DWELLING UNIT FROM WHICH A
 TENANT VACATED BECAUSE SUBSTANDARD CONDITIONS MADE  SUCH  DWELLING  UNIT
 UNINHABITABLE,  AS  DETERMINED  BY  A LOCAL, STATE OR FEDERAL REGULATORY
 AGENCY.
   8. 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.
   9. 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.
   §  3.  This  act shall take effect on the thirtieth day after it shall
 have become a law. Effective immediately, the addition, amendment and/or
 repeal of any rule or regulation necessary  for  the  implementation  of
 this  act  on its effective date are authorized to be made and completed
 on or before such effective date.