NY State Senate Bill 2021-S3327

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 05, 2022	referred to housing, construction and community development
Jan 28, 2021	referred to housing, construction and community development

2021-S3327 (ACTIVE) - Details

Current Committee:: Senate Housing, Construction And Community Development
Law Section:: New York City Administrative Code
Laws Affected:: Amd §§26-405 & 26-511, NYC Ad Cd; amd §6, Emerg Ten Prot Act of 1974; amd §4, Emerg Hous Rent Cont L
Versions Introduced in 2019-2020 Legislative Session:: S5700

2021-S3327 (ACTIVE) - Summary

Relates to applications for major capital improvement rent increases; requires owners to submit copies of all permits with their applications for major capital improvement rent increases; denies applications if permits are fraudulent or not included.

2021-S3327 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S3327

SPONSOR: RIVERA
 
TITLE OF BILL:

An act to amend the administrative code of the city of New York, the
emergency tenant protection act of nineteen seventy-four and the emer-
gency housing rent control law, in relation to applications for major
capital improvement rent increases

 
PURPOSE:

This bill requires the submission of building permits along with any
application for a major capital improvement rent increase and also
prohibits the approval of an application for a major capital rent
increase if the work was not performed pursuant to a legally obtained
building permit.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one amends subparagraph (g) of paragraph 1 of subdivision g of

section 26-405 of the administrative code of the city of New York, as
amended by section 31 of part A of chapter 20 of the law of 2015, to
require landlords to provide all necessary copies of permits for work
pertaining to the improvement, and states that providing fraudulent
permits or not submitting required permits will result in the denial of
a major capital improvement application.

Section two amends paragraph 6 of subdivision c of section 26-511 of the
administrative code of the city of New York to require landlords to
provide all necessary copies of permits for work pertaining to the
improvement, and states that providing fraudulent permits or not submit-
ting required permits will result in the denial of a major capital
improvement application.

Section three amends paragraph 3 of subdivision d of section 6 of
section 4 of chapter 576 of the laws of 1974, constituting the emergency
tenant protection act of 1974, as amended by section 30 of part A of
chapter 20 of the laws of 2015 to require landlords to provide all
necessary copies of permits for work pertaining to the improvement, and
states that providing fraudulent permits or not submitting required
permits will result in the denial of a major capital improvement appli-
cation.

Section four amends subparagraph 7 of the second undesignated paragraph
of paragraph (a) of subdivision 4 of section 4 of chapter 274 of the
laws of 1946, constituting the emergency housing rent control law, as
amended by section 32 of part A of chapter 20 of the laws of 2015 to
require landlords to provide all necessary copies of permits for work
pertaining to the improvement, and states that providing fraudulent
permits or not submitting required permits will result in the denial of
a major capital improvement application.

Section five establishes that this law shall take effect immediately.

 
JUSTIFICATION:

Landlords of rent-stabilized or rent-controlled tenants are permitted to
apply to New York State Homes and Community Renewal for a permanent rent
increase as a result of a major capital improvement. Building permits
are designed to ensure that all capital work is safely performed and
complies with relevant safety and building codes to ensure structural
integrity and tenant safety. When the major capital work is not
performed pursuant to a legally obtained building permit, the work can
and in many cases does expose the tenant and other residents to an
unreasonable risk of harm. Landlords should not be permitted to receive
a major capital rent increase if the work was not performed pursuant to
a legally obtained building permit. This legislation will provide incen-
tives to building owners to apply for and obtain building permits for
MC's and will protect tenants against unreasonable rent increases in the
event that permits are not legally obtained.

 
LEGISLATIVE HISTORY:

2019-2020: S5700/A275 Rosenthal L

 
FISCAL IMPLICATIONS:

Undetermined.

 
EFFECTIVE DATE:
This act shall take effect immediately provided that the amendments to
section 26-405 of the city rent and rehabilitation law made by section 1
of this act shall remain in full force and effect as long as there is a
public emergency.

2021-S3327 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3327
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 28, 2021
                                ___________
 
 Introduced  by  Sen.  RIVERA -- 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, the
   emergency tenant protection act of nineteen seventy-four and the emer-
   gency housing rent control law, in relation to applications for  major
   capital improvement rent increases
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
 26-405 of the administrative code of the city of New York, as amended by
 section 27 of part Q of chapter 39 of the laws of 2019,  is  amended  to
 read as follows:
   (g) There has been since July first, nineteen hundred seventy, a major
 capital  improvement  essential  for the preservation energy efficiency,
 functionality, or infrastructure of the entire building, improvement  of
 the structure including heating, windows, plumbing and roofing but shall
 not  be  for operational costs or unnecessary cosmetic improvements. The
 temporary increase based upon a major  capital  improvement  under  this
 subparagraph  for  any order of the commissioner issued after the effec-
 tive date of the chapter of the  laws  of  two  thousand  nineteen  that
 amended  this  subparagraph shall be in an amount sufficient to amortize
 the cost of the improvements pursuant to this subparagraph  (g)  over  a
 twelve-year  period  for  buildings with thirty-five or fewer units or a
 twelve and one-half year period for buildings with more than thirty-five
 units, and shall be removed from the legal regulated rent  thirty  years
 from  the  date the increase became effective inclusive of any increases
 granted by the applicable rent guidelines board. Temporary major capital
 improvement increases shall be collectible prospectively  on  the  first
 day  of  the  first  month beginning sixty days from the date of mailing
 notice of approval to the tenant. Such notice shall disclose  the  total
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD07658-01-1

 S. 3327                             2
 
 monthly  increase  in rent and the first month in which the tenant would
 be required to pay the temporary increase. An approval for  a  temporary
 major   capital  improvement  increase  shall  not  include  retroactive
 payments. The collection of any increase shall not exceed two percent in
 any year from the effective date of the order granting the increase over
 the  rent  set forth in the schedule of gross rents, with collectability
 of any dollar excess above said sum to  be  spread  forward  in  similar
 increments  and added to the rent as established or set in future years.
 Upon vacancy, the landlord may add any remaining balance of  the  tempo-
 rary  major  capital  improvement  increase to the legal regulated rent.
 Notwithstanding any other provision of the law, for  any  renewal  lease
 commencing  on  or  after  June  14,  2019,  the  collection of any rent
 increases due to any major capital improvements  approved  on  or  after
 June  16,  2012 and before June 16, 2019 shall not exceed two percent in
 any year for any tenant in occupancy  on  the  date  the  major  capital
 improvement  was  approved[,];  PROVIDED,  HOWEVER, NO APPLICATION FOR A
 MAJOR CAPITAL IMPROVEMENT RENT INCREASE SHALL BE APPROVED BY THE   DIVI-
 SION  OF  HOUSING  AND COMMUNITY RENEWAL UNLESS THE OWNER OF THE PROPER-
 TY  HAS  FILED  ALL  COPIES OF PERMITS PERTAINING   TO THE MAJOR CAPITAL
 IMPROVEMENT WORK WITH SUCH APPLICATION.  ANY APPLICATION SUBMITTED  WITH
 FRAUDULENT PERMITS  OR  WITHOUT REQUIRED PERMITS SHALL BE DENIED; or
   § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
 tive  code  of the city of New York, as separately amended by section 12
 of part K of chapter 36 and section 28 of part Q of chapter  39  of  the
 laws of 2019, is amended to read as follows:
   (6)  provides  criteria whereby the commissioner may act upon applica-
 tions by owners for increases in  excess  of  the  level  of  fair  rent
 increase  established under this law provided, however, that such crite-
 ria shall provide (a) as to hardship applications, for  a  finding  that
 the level of fair rent increase is not sufficient to enable the owner to
 maintain  approximately  the same average annual net income (which shall
 be computed without regard to debt service, financing costs  or  manage-
 ment  fees)  for the three year period ending on or within six months of
 the date of an application pursuant to such criteria  as  compared  with
 annual  net income, which prevailed on the average over the period nine-
 teen hundred sixty-eight through nineteen hundred seventy,  or  for  the
 first three years of operation if the building was completed since nine-
 teen  hundred  sixty-eight  or  for the first three fiscal years after a
 transfer of title to a new owner provided the new owner can establish to
 the satisfaction of the commissioner that he or she  acquired  title  to
 the  building as a result of a bona fide sale of the entire building and
 that the new owner is unable to obtain requisite records for the  fiscal
 years  nineteen  hundred  sixty-eight  through  nineteen hundred seventy
 despite diligent efforts to obtain same from predecessors in  title  and
 further  provided that the new owner can provide financial data covering
 a minimum of six years under his or  her  continuous  and  uninterrupted
 operation  of  the building to meet the three year to three year compar-
 ative test periods herein provided; and (b) as  to  completed  building-
 wide  major  capital  improvements, for a finding that such improvements
 are deemed depreciable under the Internal Revenue Code and that the cost
 is to be amortized over a twelve-year period for a building  with  thir-
 ty-five  or  fewer housing accommodations, or a twelve and one-half-year
 period for a building with more than thirty-five housing accommodations,
 for any determination issued by the division of  housing  and  community
 renewal after the effective date of the [the] chapter of the laws of two
 thousand  nineteen that amended this paragraph and shall be removed from

 S. 3327                             3
 
 the legal regulated rent thirty years from the date the increase  became
 effective  inclusive  of  any  increases  granted by the applicable rent
 guidelines board. Temporary major capital improvement increases shall be
 collectible  prospectively on the first day of the first month beginning
 sixty days from the date of mailing notice of approval  to  the  tenant.
 Such  notice  shall  disclose the total monthly increase in rent and the
 first month in which the tenant would be required to pay  the  temporary
 increase. An approval for a temporary major capital improvement increase
 shall  not  include retroactive payments. The collection of any increase
 shall not exceed two percent in any year from the effective date of  the
 order  granting  the increase over the rent set forth in the schedule of
 gross rents, with collectability of any dollar excess above said sum  to
 be  spread forward in similar increments and added to the rent as estab-
 lished or set in future years.  Upon vacancy, the landlord may  add  any
 remaining balance of the temporary major capital improvement increase to
 the  legal  regulated  rent.  Notwithstanding any other provision of the
 law, for any renewal lease commencing on or after  June  14,  2019,  the
 collection  of  any rent increases due to any major capital improvements
 approved on or after June 16, 2012 and before June 16,  2019  shall  not
 exceed  two  percent in any year for any tenant in occupancy on the date
 the major capital improvement was approved or based upon  cash  purchase
 price exclusive of interest or service charges. Where an application for
 a  temporary major capital improvement increase has been filed, a tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing in which to answer or reply.  The  state  division  of  housing  and
 community  renewal  shall provide any responding tenant with the reasons
 for the division's approval or denial of such application. THE  DIVISION
 OF  HOUSING AND COMMUNITY RENEWAL SHALL REQUIRE THE SUBMISSION OF COPIES
 OF ALL PERMITS PERTAINING TO MAJOR CAPITAL  IMPROVEMENT  WORK  WITH  ANY
 APPLICATION  FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE. ANY APPLICA-
 TION SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL
 BE DENIED. Notwithstanding anything to the contrary contained herein, no
 hardship increase granted pursuant to this paragraph shall,  when  added
 to the annual gross rents, as determined by the commissioner, exceed the
 sum of, (i) the annual operating expenses, (ii) an allowance for manage-
 ment  services  as  determined  by the commissioner, (iii) actual annual
 mortgage debt service (interest and amortization) on its indebtedness to
 a lending institution,  an  insurance  company,  a  retirement  fund  or
 welfare  fund  which is operated under the supervision of the banking or
 insurance laws of the state of New York or the United States,  and  (iv)
 eight  and  one-half percent of that portion of the fair market value of
 the property which exceeds the unpaid principal amount of  the  mortgage
 indebtedness  referred  to in subparagraph (iii) of this paragraph. Fair
 market value for the purposes of this paragraph shall be six  times  the
 annual gross rent. The collection of any increase in the stabilized rent
 for  any  apartment  pursuant  to  this  paragraph  shall not exceed six
 percent in any year from the effective date of the  order  granting  the
 increase  over  the  rent set forth in the schedule of gross rents, with
 collectability of any dollar excess above said sum to be spread  forward
 in similar increments and added to the stabilized rent as established or
 set in future years;
   § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
 576  of  the  laws of 1974, constituting the emergency tenant protection
 act of nineteen seventy-four, as amended by section  26  of  part  Q  of
 chapter 39 of the laws of 2019, is amended to read as follows:

 S. 3327                             4

   (3)  there has been since January first, nineteen hundred seventy-four
 a major capital improvement essential for the preservation, energy effi-
 ciency,  functionality,  or  infrastructure  of  the  entire   building,
 improvement  of  the  structure including heating, windows, plumbing and
 roofing,  but  shall  not be for operation costs or unnecessary cosmetic
 improvements. An adjustment under this paragraph shall be in  an  amount
 sufficient  to  amortize  the  cost of the improvements pursuant to this
 paragraph over a twelve-year period for a building with  thirty-five  or
 fewer  housing  accommodations,  or  a  twelve and one-half period for a
 building with more than thirty-five housing accommodations and shall  be
 removed  from  the  legal  regulated rent thirty years from the date the
 increase became effective inclusive of  any  increases  granted  by  the
 applicable  rent  guidelines  board, for any determination issued by the
 division of housing and community renewal after the  effective  date  of
 the chapter of the laws of two thousand nineteen that amended this para-
 graph.  Temporary major capital improvement increases shall be collecta-
 ble prospectively on the first day of the first  month  beginning  sixty
 days  from  the  date of mailing notice of approval to the tenant.  Such
 notice shall disclose the total monthly increase in rent and  the  first
 month  in  which  the  tenant  would  be  required  to pay the temporary
 increase. An approval for a temporary major capital improvement increase
 shall not include retroactive payments. The collection of  any  increase
 shall  not exceed two percent in any year from the effective date of the
 order granting the increase over the rent set forth in the  schedule  of
 gross  rents, with collectability of any dollar excess above said sum to
 be spread forward in similar increments and added to the rent as  estab-
 lished  or  set  in future years. Upon vacancy, the landlord may add any
 remaining balance of the temporary major capital improvement increase to
 the legal regulated rent. Notwithstanding any  other  provision  of  the
 law, the collection of any rent increases for any renewal lease commenc-
 ing  on  or  after  June 14, 2019, due to any major capital improvements
 approved on or after June 16, 2012 and before June 16,  2019  shall  not
 exceed  two  percent in any year for any tenant in occupancy on the date
 the major capital improvement was  approved[,];  PROVIDED,  HOWEVER,  NO
 APPLICATION  FOR  A  MAJOR CAPITAL IMPROVEMENT RENT   INCREASE  SHALL BE
 APPROVED  BY  THE  DIVISION  OF HOUSING AND COMMUNITY RENEWAL UNLESS THE
 OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO  THE
 MAJOR  CAPITAL  IMPROVEMENT  WORK WITH SUCH APPLICATION. ANY APPLICATION
 SUBMITTED  WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS  SHALL BE
 DENIED; or
   § 4. Subparagraph 7 of the second undesignated paragraph of  paragraph
 (a)  of  subdivision  4 of section 4 of chapter 274 of the laws of 1946,
 constituting the emergency  housing  rent  control  law,  as  separately
 amended  by  section 25 of part Q of chapter 39 and section 14 of part K
 of chapter 36 of the laws of 2019, is amended to read as follows:
   (7) there has been since March first, nineteen hundred fifty, a  major
 capital  improvement  essential for the preservation, energy efficiency,
 functionality, or infrastructure of the entire building, improvement  of
 the  structure  including  heating,  windows,  plumbing and roofing, but
 shall not be for operational costs or unnecessary cosmetic improvements;
 which for any order of the commissioner issued after the effective  date
 of  the  chapter  of the laws of two thousand nineteen that amended this
 paragraph the cost of such improvement shall be amortized over a twelve-
 year period for buildings with thirty-five or fewer units  or  a  twelve
 and one-half year period for buildings with more than thirty-five units,
 and shall be removed from the legal regulated rent thirty years from the

 S. 3327                             5
 
 date the increase became effective inclusive of any increases granted by
 the  applicable  rent guidelines board. Temporary major capital improve-
 ment increases shall be collectible prospectively on the  first  day  of
 the  first month beginning sixty days from the date of mailing notice of
 approval to the tenant. Such notice shall  disclose  the  total  monthly
 increase  in  rent  and  the  first  month  in which the tenant would be
 required to pay the temporary increase.  An  approval  for  a  temporary
 major   capital  improvement  increase  shall  not  include  retroactive
 payments. The collection of any increase shall not exceed two percent in
 any year from the effective date of the order granting the increase over
 the rent set forth in the schedule of gross rents,  with  collectability
 of  any  dollar  excess  above  said sum to be spread forward in similar
 increments and added to the rent as established or set in future  years.
 Upon  vacancy,  the landlord may add any remaining balance of the tempo-
 rary major capital improvement increase to  the  legal  regulated  rent.
 Notwithstanding  any  other  provision of the law, for any renewal lease
 commencing on or after  June  14,  2019,  the  collection  of  any  rent
 increases  due  to  any  major capital improvements approved on or after
 June 16, 2012 and before June 16, 2019 shall not exceed two  percent  in
 any  year  for  any  tenant  in  occupancy on the date the major capital
 improvement was approved; provided, however, where an application for  a
 temporary  major  capital  improvement increase has been filed, a tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing in which to answer or reply.  The  state  division  of  housing  and
 community  renewal  shall provide any responding tenant with the reasons
 for the division's approval or denial  of  such  application;  PROVIDED,
 HOWEVER,    NO APPLICATION   FOR   A   MAJOR  CAPITAL  IMPROVEMENT  RENT
 INCREASE SHALL BE APPROVED BY THE DIVISION OF  HOUSING  AND    COMMUNITY
 RENEWAL    UNLESS  THE  OWNER    OF THE PROPERTY HAS FILED ALL COPIES OF
 PERMITS PERTAINING TO THE  MAJOR  CAPITAL  IMPROVEMENT  WORK  WITH  SUCH
 APPLICATION.    ANY APPLICATION SUBMITTED   WITH   FRAUDULENT PERMITS OR
 WITHOUT REQUIRED PERMITS SHALL BE DENIED; or
   § 5. This act shall take effect immediately; provided that the  amend-
 ments  to  section  26-511  of  the  rent  stabilization law of nineteen
 hundred sixty-nine made by section two 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, as from  time  to
 time amended.

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Senate Bill S3327

Sponsored By

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

2021-S3327 (ACTIVE) - Details

2021-S3327 (ACTIVE) - Summary

2021-S3327 (ACTIVE) - Sponsor Memo

2021-S3327 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S3327

Share this bill

Sponsored By

Gustavo Rivera

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

2021-S3327 (ACTIVE) - Details

2021-S3327 (ACTIVE) - Summary

2021-S3327 (ACTIVE) - Sponsor Memo

2021-S3327 (ACTIVE) - Bill Text download pdf

Comments