S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5031--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 27, 2023
                                ___________
 
 Introduced by M. of A. L. ROSENTHAL, SIMONE -- read once and referred to
   the  Committee  on  Housing  --  committee  discharged,  bill amended,
   ordered reprinted as amended and recommitted to said committee
 
 AN ACT to amend the real property  law,  in  relation  to  limiting  the
   amount  of  rent  increases  for  residential ground lease cooperative
   apartment buildings and establishing certain rights upon expiration of
   such leases
 
   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
 233-c to read as follows:
   § 233-C. RESIDENTIAL GROUND LEASE COOPERATIVE APARTMENT BUILDINGS.  1.
 WHEREVER USED IN THIS SECTION:
   (A) THE TERM "RESIDENTIAL GROUND LEASE COOPERATIVE APARTMENT BUILDING"
 MEANS  ANY  AND  ALL  BUILDINGS,  IMPROVEMENTS  AND/OR  OTHER STRUCTURES
 LOCATED IN THE STATE OF NEW YORK OCCUPIED, OWNED AND/OR LEASED IN  WHOLE
 OR  IN PART BY A GROUND LEASE RESIDENTIAL COOPERATIVE, OR ANY SUBSIDIARY
 OR AFFILIATE THEREOF, PURSUANT  TO  A  SUBJECT  RESIDENTIAL  COOPERATIVE
 GROUND LEASE.
   (B) THE TERM "GROUND LEASE RESIDENTIAL COOPERATIVE" MEANS ANY NEW YORK
 CORPORATION  ORGANIZED  AND/OR  OPERATING  AS A HOUSING DEVELOPMENT FUND
 CORPORATION, NEW YORK COOPERATIVE CORPORATION AND/OR COOPERATIVE HOUSING
 CORPORATION, INCLUDING ANY ENTITY MEETING  THE  DEFINITION  THEREOF  FOR
 FEDERAL INCOME TAX PURPOSES, OR ANY PERSON OR ENTITY THAT IS A TENANT IN
 COMMON, CO-TENANT OR JOINT OWNER WITH ANY SUCH CORPORATION, OR WHICH IS,
 DIRECTLY  OR  INDIRECTLY  THROUGH  A  SUBSIDIARY OR AFFILIATE THEREOF, A
 PARTY TO A SUBJECT RESIDENTIAL COOPERATIVE GROUND LEASE.
   (C) THE TERM "SUBJECT RESIDENTIAL COOPERATIVE GROUND LEASE" MEANS  THE
 LEASE  AGREEMENT,  TOGETHER  WITH ANY AMENDMENTS OR OTHER RELATED AGREE-
 MENTS INCLUDING ANY FORBEARANCE, SETTLEMENT, TENANCY IN COMMON OR  OTHER
 SIMILAR  AGREEMENTS  RELATED  THERETO,  PURSUANT TO WHICH A GROUND LEASE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02744-03-3
              

 A. 5031--A                          2
 
 RESIDENTIAL COOPERATIVE LEASES, OCCUPIES AND/OR OTHERWISE USES FOR RESI-
 DENTIAL, COMMERCIAL, OR OTHER ANCILLARY PURPOSES THE GROUND  LEASE  REAL
 PROPERTY FROM ONE OR MORE SUBJECT GROUND LEASE OWNERS.
   (D)  THE  TERM  "GROUND  LEASE REAL PROPERTY" MEANS ALL REAL PROPERTY,
 INCLUDING IMPROVEMENTS THEREON, ALL OR ANY PORTION OF WHICH  IS  LEASED,
 RENTED,  LICENSED  OR OTHERWISE PROVIDED FOR USE TO A GROUND LEASE RESI-
 DENTIAL COOPERATIVE PURSUANT TO A SUBJECT RESIDENTIAL COOPERATIVE GROUND
 LEASE, INCLUDING ANY PORTION THEREOF THAT MAY BE SUBLEASED OR  OTHERWISE
 USED FOR ANCILLARY RETAIL, PARKING, OR COMMERCIAL PURPOSES.
   (E)  THE  TERM "SUBJECT GROUND LEASE OWNERS" MEANS ANY AND ALL PERSONS
 OR ENTITIES (WHETHER NATURAL  PERSONS,  ESTATES,  TRUSTS,  CORPORATIONS,
 PARTNERSHIPS  OR  OTHER  ENTITIES), OTHER THAN ANY EXCEPTED GROUND LEASE
 OWNER, THAT HOLDS TITLE TO AND/OR IS THE OWNER (WHETHER BY THE ENTIRETY,
 AS TENANTS IN COMMON OR OTHERWISE) OF GROUND LEASE REAL PROPERTY  AND/OR
 IS  OTHERWISE  THE  LANDLORD  UNDER  ANY SUBJECT RESIDENTIAL COOPERATIVE
 GROUND LEASE.
   (F) THE TERM "EXCEPTED GROUND LEASE OWNER"  MEANS  THE  UNITED  STATES
 FEDERAL GOVERNMENT, THE STATE OF NEW YORK, THE CITY OF NEW YORK, AND ANY
 AGENCY,  MUNICIPALITY  OR  POLITICAL SUBDIVISION OF ANY OF THE FOREGOING
 THEREOF, ANY ENTITY OWNED OR CONTROLLED BY ANY OF THE FOREGOING, INCLUD-
 ING, WITHOUT LIMITATION, THE BATTERY PARK CITY  AUTHORITY,  ANY  CHARITY
 APPROVED  UNDER  SECTION  501(C)  OF  THE  INTERNAL  REVENUE  CODE WHICH
 ACQUIRED ITS INTEREST AS THE OWNER AND/OR LANDLORD  OF  A  GROUND  LEASE
 REAL PROPERTY PRIOR TO JANUARY FIRST, TWO THOUSAND TWENTY-THREE, AND ANY
 INDIAN  NATION,  TRIBE OR BAND AS DEFINED UNDER TITLE TWENTY-FIVE OF THE
 UNITED STATES CODE, BUT SHALL EXCLUDE ANY  "PRIVATE  FOUNDATION"  WITHIN
 THE MEANING OF SECTION FIVE HUNDRED NINE OF THE INTERNAL REVENUE CODE.
   (G)  THE  TERM  "BASE RENT" MEANS FOR ANY YEAR THE PAYMENTS, INCLUDING
 ANY CONSUMER PRICE INDEX OR OTHER  SIMILAR  ADJUSTMENT  PAYMENTS,  OTHER
 THAN  ADDITIONAL  RENT,  REQUIRED TO BE MADE TO THE SUBJECT GROUND LEASE
 OWNERS FOR SUCH YEAR  PURSUANT  TO  A  SUBJECT  RESIDENTIAL  COOPERATIVE
 GROUND LEASE.
   (H)  THE TERM "ADDITIONAL RENT" MEANS, FOR ANY YEAR, THE AMOUNTS SPENT
 OR BORNE BY THE GROUND LEASE RESIDENTIAL COOPERATIVE  DURING  SUCH  YEAR
 PURSUANT TO, OR IN ORDER TO COMPLY WITH, THE SUBJECT RESIDENTIAL COOPER-
 ATIVE  GROUND  LEASE  FOR  THE  PAYMENT OF REAL ESTATE TAXES, INSURANCE,
 REPAIR, MAINTENANCE, INCLUDING, WITHOUT LIMITATION, MAINTENANCE  AS  MAY
 BE REQUIRED PURSUANT TO ANY FACADE INSPECTION SAFETY PROGRAM IMPLEMENTED
 BY ANY CITY, MUNICIPALITY OR OTHER GOVERNMENT ENTITY WITHIN THE STATE OF
 NEW  YORK,  AND/OR OTHER CAPITAL IMPROVEMENTS FOR OR WITH RESPECT TO THE
 RESIDENTIAL GROUND LEASE COOPERATIVE APARTMENT BUILDING.
   (I) THE TERM "MAXIMUM ANNUAL RENT INCREASE PERCENTAGE" MEANS, FOR  ANY
 YEAR, THE GREATER OF: (X) THREE PERCENT (3%); AND (Y) THE CONSUMER PRICE
 INDEX  (FOR  ALL  URBAN  CONSUMERS,  U.S.  CITY  AVERAGE, ALL ITEMS, NOT
 SEASONALLY ADJUSTED), AS PUBLISHED BY THE UNITED  STATES  DEPARTMENT  OF
 LABOR FOR SUCH YEAR.
   (J)  "COMMISSIONER"  MEANS THE COMMISSIONER OF THE DIVISION OF HOUSING
 AND COMMUNITY RENEWAL.
   2. ANNUAL INCREASES IN BASE RENT PAYABLE BY ANY GROUND LEASE  RESIDEN-
 TIAL  COOPERATIVE  SHALL,  WHEN  TAKEN  TOGETHER  WITH THE AMOUNT OF ANY
 INCREASES IN ADDITIONAL RENT PAID BY THE GROUND LEASE RESIDENTIAL  COOP-
 ERATIVE  DURING  THE  PRIOR  YEAR, IN NO EVENT EXCEED THE MAXIMUM ANNUAL
 RENT INCREASE PERCENTAGE OF THE BASE RENT PAYABLE BY  THE  GROUND  LEASE
 RESIDENTIAL  COOPERATIVE  IN  THE  PRIOR  YEAR. IN THE EVENT THE SUBJECT
 RESIDENTIAL COOPERATIVE GROUND LEASE PROVIDES FOR INCREASES IN BASE RENT
 ON A PERIODIC BASIS LESS FREQUENTLY THAN ANNUALLY, THE INCREASE IN  BASE
 A. 5031--A                          3
 
 RENT  FOR  ANY PERIOD, WHEN TAKEN TOGETHER WITH THE AMOUNT OF ANY ANNUAL
 INCREASE IN ADDITIONAL RENT PAID BY THE GROUND LEASE RESIDENTIAL COOPER-
 ATIVE DURING SUCH PERIOD, MAY  NOT  REPRESENT  MORE  THAN  THE  COMPOUND
 INCREASE  THAT  RESULTS  FROM  APPLYING THE MAXIMUM ANNUAL RENT INCREASE
 PERCENTAGE FOR EACH APPLICABLE YEAR ABOVE THE BASE RENT  FOR  THE  PRIOR
 BASE  RENT  IN  EFFECT.  THE  PROVISIONS OF THIS SUBDIVISION SHALL APPLY
 REGARDLESS OF THE METHODOLOGY FOR  DETERMINING  THE  BASE  RENT  OR  ANY
 INCREASES  THEREIN  AS  SET FORTH IN THE SUBJECT RESIDENTIAL COOPERATIVE
 GROUND LEASE INSTRUMENT. IN THE EVENT THE  AMOUNT  OF  ANY  INCREASE  IN
 ADDITIONAL RENT DURING ANY YEAR EXCEEDS THE MAXIMUM ANNUAL RENT INCREASE
 PERCENTAGE  OF  THE BASE RENT FOR SUCH YEAR, SUCH EXCESS AMOUNT SHALL BE
 CARRIED FORWARD TO REDUCE THE AMOUNT OF ANY INCREASE IN BASE RENT OTHER-
 WISE PERMITTED HEREUNDER IN ANY FUTURE PERIOD UNTIL SUCH EXCESS  AMOUNTS
 HAVE BEEN FULLY APPLIED.
   3.  AFTER  THE  EFFECTIVE DATE OF THIS SECTION, ANY RESIDENTIAL GROUND
 LEASE COOPERATIVE SHALL HAVE THE RIGHT TO RENEW ITS SUBJECT  RESIDENTIAL
 COOPERATIVE  GROUND  LEASE  ON THE SAME TERMS AND CONDITIONS, SUBJECT TO
 THIS SECTION, AS IN EFFECT AT TIME OF RENEWAL, WITH SUCH  RENEWAL  EXER-
 CISABLE AT ANY TIME PRIOR TO OR WITHIN NINETY DAYS AFTER HAVING RECEIVED
 WRITTEN NOTICE FROM THE SUBJECT GROUND LEASE OWNERS OF THE EXPIRATION OR
 TERMINATION  OF  THE  SUBJECT  RESIDENTIAL COOPERATIVE GROUND LEASE. ANY
 RENEWAL TERM PURSUANT TO THE FOREGOING SHALL BE EQUAL  TO  THE  TERM  OF
 SUCH  SUBJECT RESIDENTIAL COOPERATIVE GROUND LEASE PRIOR TO SUCH EXPIRA-
 TION OR TERMINATION AND SHALL OCCUR AUTOMATICALLY,  UNLESS  THE  SUBJECT
 RESIDENTIAL  COOPERATIVE  GROUND  LEASE  AFFIRMATIVELY  ELECTS TO NOT SO
 RENEW AND HAS PROVIDED WRITTEN NOTICE OF SUCH NON-RENEWAL TO THE SUBJECT
 GROUND LEASE OWNERS.
   4. AFTER THE EFFECTIVE DATE OF THIS SECTION,  ANY  RESIDENTIAL  GROUND
 LEASE  COOPERATIVE  SHALL,  NOTWITHSTANDING  ANYTHING  TO  THE CONTRARY,
 INCLUDING PROHIBITIONS OR SPECIFIED DOLLAR LIMITATIONS, SET FORTH  IN  A
 SUBJECT  RESIDENTIAL COOPERATIVE GROUND LEASE, HAVE THE AUTHORITY, RIGHT
 AND POWER TO INCUR INDEBTEDNESS OR OTHERWISE BORROW MONEY, AND TO  GRANT
 A  FIRST  MORTGAGE  AND/OR  OTHER SIMILAR SECURITY INTEREST ON OR IN THE
 GROUND LEASE APARTMENT BUILDING WITH RESPECT  TO  SUCH  INDEBTEDNESS  OR
 BORROWED  MONEY,  OF  ANY AMOUNT, IF THE PRIMARY PURPOSE OF SUCH INDEBT-
 EDNESS AND/OR BORROWED MONEY IS TO  PROVIDE  PROCEEDS  OR  OTHER  CREDIT
 SUPPORT  TO  PAY  OR  FUND ADDITIONAL RENT OR OTHERWISE PERFORM REPAIRS,
 MAINTENANCE OR OTHER CAPITAL IMPROVEMENTS ON  OR  WITH  RESPECT  TO  THE
 GROUND LEASE REAL PROPERTY AND/OR THE GROUND LEASE APARTMENT BUILDING.
   5.  (A)  IF,  AFTER  THE  EFFECTIVE  DATE OF THIS SECTION, ANY SUBJECT
 GROUND LEASE OWNER PROPOSES TO  DIRECTLY  OR  INDIRECTLY  SELL,  ASSIGN,
 EXCHANGE,  OR  OTHERWISE TRANSFER ANY DIRECT OR INDIRECT INTEREST IN ANY
 GROUND LEASE REAL PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY  INDIRECT
 HYPOTHECATION  BY  WAY  OF  TRANSFERS OF INTERESTS IN ANY ENTITY THAT IS
 ITSELF A SUBJECT GROUND LEASE  LANDLORD OR AN OWNER THEREOF  AND/OR  THE
 SUBJECT    RESIDENTIAL  COOPERATIVE   GROUND   LEASE ITSELF, THE SUBJECT
 GROUND LEASE OWNER SHALL PROVIDE THE RESIDENTIAL  GROUND  LEASE  COOPER-
 ATIVE  WITH  WRITTEN  NOTICE  THEREOF CONTAINING THE PRICE AND ALL OTHER
 TERMS AND CONDITIONS OF SUCH DIRECT OR INDIRECT PROPOSED  SALE,  ASSIGN-
 MENT,  EXCHANGE,  TRANSFER, OR OTHER SIMILAR CONVEYANCE. THE RESIDENTIAL
 GROUND LEASE COOPERATIVE SHALL HAVE THE RIGHT TO PURCHASE  THE  INTEREST
 BEING  SOLD,  ASSIGNED,  EXCHANGED, TRANSFERRED, OR CONVEYED AT THE SAME
 PRICE AND ON SUBSTANTIALLY SIMILAR TERMS  AND  CONDITIONS  BY  PROVIDING
 WRITTEN  NOTICE  TO  THE  SUBJECT  GROUND LEASE OWNER WITHIN ONE HUNDRED
 TWENTY DAYS OF RECEIPT OF THE AFOREMENTIONED  WRITTEN  NOTICE  FROM  THE
 SUBJECT  GROUND LEASE OWNER. THE CLOSING OF THE PURCHASE BY THE RESIDEN-
 A. 5031--A                          4
 
 TIAL GROUND LEASE COOPERATIVE SHALL OCCUR  WITHIN  THE  TIME  FRAME  AND
 PURSUANT TO PROCEDURES ADOPTED BY THE COMMISSIONER PURSUANT TO PARAGRAPH
 (D) OF THIS SUBDIVISION.
   (B)  IF  AN  OFFER TO PURCHASE BY THE RESIDENTIAL GROUND LEASE COOPER-
 ATIVE IS NOT DELIVERED WITHIN SUCH ONE HUNDRED TWENTY DAY PERIOD,  THEN,
 UNLESS  THE  SUBJECT GROUND LEASE OWNER THEREAFTER ELECTS TO DIRECTLY OR
 INDIRECTLY SELL, ASSIGN, EXCHANGE, OR OTHERWISE TRANSFER ANY  DIRECT  OR
 INDIRECT  INTEREST  IN  ANY  GROUND LEASE REAL PROPERTY AT A PRICE LOWER
 THAN THE PRICE SPECIFIED IN THE NOTICE TO THE RESIDENTIAL  GROUND  LEASE
 COOPERATIVE  OR  ON TERMS DIFFERENT FROM THOSE PRESENTED TO THE RESIDEN-
 TIAL GROUND LEASE COOPERATIVE, THE SUBJECT GROUND  LEASE  OWNER  HAS  NO
 FURTHER  OBLIGATIONS UNDER THIS SECTION, UNLESS THE SUBJECT GROUND LEASE
 OWNER DOES NOT DIRECTLY OR INDIRECTLY SELL, ASSIGN, EXCHANGE, OR  OTHER-
 WISE  TRANSFER  ANY DIRECT OR INDIRECT INTEREST IN ANY GROUND LEASE REAL
 PROPERTY IN ACCORDANCE WITH THE FOREGOING WITHIN ONE HUNDRED TWENTY DAYS
 AFTER THE EXPIRATION OF THE ONE HUNDRED  TWENTY  DAY  PERIOD  COMMENCING
 WITH DELIVERY OF THE WRITTEN NOTICE OF THE PROPOSED SALE TO THE RESIDEN-
 TIAL  GROUND  LEASE  COOPERATIVE,  IN WHICH CASE THE PROVISIONS OF PARA-
 GRAPHS (A) AND (C) OF THIS SUBDIVISION SHALL CONTINUE TO APPLY.
   (C) IF THE SUBJECT GROUND LEASE OWNER, AFTER SUCH ONE  HUNDRED  TWENTY
 DAY  PERIOD, ELECTS TO DIRECTLY OR INDIRECTLY SELL, ASSIGN, EXCHANGE, OR
 OTHERWISE TRANSFER ANY DIRECT OR INDIRECT INTEREST IN ANY  GROUND  LEASE
 REAL PROPERTY AT A PRICE LOWER THAN THE PRICE SPECIFIED IN THE NOTICE TO
 THE  RESIDENTIAL  GROUND  LEASE  COOPERATIVE  OR ON TERMS DIFFERENT FROM
 THOSE PRESENTED TO THE RESIDENTIAL GROUND LEASE  COOPERATIVE,  THEN  THE
 RESIDENTIAL GROUND LEASE COOPERATIVE SHALL BE ENTITLED TO NOTICE THEREOF
 AND  SHALL  HAVE  AN ADDITIONAL ONE HUNDRED TWENTY DAYS AFTER RECEIPT OF
 NOTICE OF THE REVISED TERMS TO DELIVER TO THE SUBJECT GROUND LEASE OWNER
 A WRITTEN NOTICE INDICATING EXERCISE OF SUCH  RESIDENTIAL  GROUND  LEASE
 COOPERATIVE'S  RIGHT  TO  PURCHASE WHICH MEETS THE REVISED PRICE, TERMS,
 AND CONDITIONS AS PRESENTED BY THE SUBJECT  GROUND  LEASE  OWNER.    THE
 CLOSING  OF  THE  PURCHASE  BY SUCH RESIDENTIAL GROUND LEASE COOPERATIVE
 SHALL OCCUR WITHIN THE TIME FRAME AND PURSUANT TO PROCEDURES ADOPTED  BY
 THE COMMISSIONER PURSUANT TO PARAGRAPH (D) OF THIS SUBDIVISION.
   (D)  THE  COMMISSIONER  SHALL  ADOPT THE PROCEDURES IN CONNECTION WITH
 THIS SUBDIVISION NO LATER THAN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS
 SECTION TO GIVE EFFECT TO CLOSING TERMS AND CONDITIONS  ASSOCIATED  WITH
 ANY PURCHASE AND SALE CONTEMPLATED BY THIS SUBDIVISION.
   (E)  THIS  SECTION  DOES  NOT  APPLY TO PURCHASES OF GROUND LEASE REAL
 PROPERTY BY A GOVERNMENTAL ENTITY UNDER ITS POWERS OF EMINENT DOMAIN.
   § 2. If any clause, sentence, paragraph, subdivision, section or  part
 of  this act shall be adjudged by any court of competent jurisdiction to
 be invalid, such judgment shall not affect, impair,  or  invalidate  the
 remainder thereof, but shall be confined in its operation to the clause,
 sentence,  paragraph,  subdivision,  section  or  part  thereof directly
 involved in the controversy in  which  such  judgment  shall  have  been
 rendered. It is hereby declared to be the intent of the legislature that
 this act would have been enacted even if such invalid provisions had not
 been included herein.
   §  3.  This  act  shall take effect immediately and shall apply to all
 existing leases as of such effective date and to  any  renewals,  amend-
 ments and other extensions of such leases.