Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
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Jun 20, 2023 |
returned to senate passed assembly ordered to third reading rules cal.864 substituted for a6216b |
Jun 09, 2023 |
referred to codes delivered to assembly passed senate |
May 22, 2023 |
amended on third reading (t) 2980c |
May 09, 2023 |
advanced to third reading |
May 08, 2023 |
2nd report cal. |
May 03, 2023 |
1st report cal.747 |
Apr 26, 2023 |
print number 2980b |
Apr 26, 2023 |
amend (t) and recommit to housing, construction and community development |
Mar 07, 2023 |
print number 2980a |
Mar 07, 2023 |
amend (t) and recommit to housing, construction and community development |
Jan 26, 2023 |
referred to housing, construction and community development |
Senate Bill S2980C
2023-2024 Legislative Session
Relates to rent regulation and tenant protection; repealer
download bill text pdfSponsored By
(D) 27th Senate District
Current Bill Status - Passed Senate & Assembly
- Introduced
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- In Committee Assembly
- In Committee Senate
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- On Floor Calendar Assembly
- On Floor Calendar Senate
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- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
Votes
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Floor Vote: Jun 9, 2023
aye (37)nay (25)excused (1)
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May 1, 2023 - Housing, Construction And Community Development Committee Vote
S2980C8Aye3Nay0Aye with Reservations0Absent0Excused0Abstained-
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Housing, Construction And Community Development Committee Vote: May 1, 2023
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Bill Amendments
co-Sponsors
(D, WF) 47th Senate District
(D, WF) 33rd Senate District
2023-S2980 - Details
2023-S2980 - Sponsor Memo
BILL NUMBER: S2980 SPONSOR: KAVANAGH TITLE OF BILL: An act to amend the administrative code of the city of New York, in relation to establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emergency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial rehabilitation; and to repeal paragraph 9 of subdivision a of section 26-405 of the administra- tive code of the city of New York, in relation to public hearings by the city rent agency (Part A); to amend the administrative code of the city of New York, chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, and chapter 274 of the laws of 1946, constituting the emergency housing rent control law, in relation to major capital improvements (Part B); to amend the multiple dwelling law, in relation to rent impairing violations; and to amend the real property actions and proceedings law, in relation to eviction proceedings (Part C); and to apply the Housing Stability and Tenant Protection Act of 2019 to rent calculations and rent records maintenance and destruction (Part D)
PURPOSE: The legislature passed the Housing Stability and Tenant Protection Act of 2019 to transform and strengthen many of our state's laws that protect tenants and provide housing stability. This bill seeks to address gaps in these laws that persist after that landmark legislation. SUMMARY OF PROVISIONS: Section 1 of the bill sets forth the structure of the bill, with four components Parts A, B, C, and D. PART A Section 1 of Part A of the bill repeals paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, which requires public hearings prior to establishing maximum base rents for rent controlled apartments; pursuant to the HSTPA, MBRs are set in a different manner. Section 2 of Part A of the bill amends subdivision c of section 26-511 of the administrative code of the city of New York by adding a new para- graph 15, which provides that where a landlord combines two or more vacant rent stabilized apartments, the legal regulated rent for the combined apartment may not exceed the sum of the rents of the formerly separate apartments. The new paragraph also provides that where a land- lord reduces the dimensions of a rent stabilized apartment, or combines part of that apartment with a neighboring apartment, the legal regulated rent for the reduced apartment shall be the prior rent reduced in proportion to the reduction in floor area and the rent for any expanded neighboring apartment may not exceed the former rent for that apartment. Section 3 of Part A of the bill amends the opening paragraph of para- graph (a) of subdivision 4 of section 14 of the public housing law to define the term "permanently vacated" for the purpose of determining succession rights of a member of a tenant's family. Section 4 of Part A of the bill amends paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of 1974 to clarify and limit the circumstances in which a landlord may claim exemption from rent stabili- zation on the basis of substantial rehabilitation, and to require approval for such claim by the Division of Housing and Community Renewal. Section 5 of Part A of the bill sets forth the effective date for Part A, providing that it shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amend- ments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York 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. PART B Section 1 through 4 of Part B of the bill all amend parallel provisions of the state's various laws regulating rent to provide that no applica- tion for a major capital improvement rent increase shall be approved unless the landlord files all copies of valid permits pertaining to the major capital improvement work with such application. Section 1 of Part B amends subparagraph (g) of paragraph 1 of subdivi- sion g of section 26-405 of the administrative code of the city of New York for that purpose. Section 2 of Part B of the bill amends paragraph 6 of subdivision c of section 26-511 of the administrative code of the city of New York for the same purpose. Section 3 of Part B of the bill 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, for the same purpose. Section 4 of Part B of the bill 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, for the same purpose. Section 5 of Part B of the bill sets forth the effective date for Part B, providing that it shall take effect immediately; provided that the amendments to section 26-405 of the city rent and rehabilitation law made by section one of this act shall remain in full force and effect only as long as the public emergency requiring the regulation and control of residential rents and evictions continues, as provided in subdivision 3 of section 1 of the local emergency housing rent control act; provided, further, that the amendments 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. PART C Section 1 of Part C of the bill amends subdivision 3 of section 302-a of the multiple dwelling law to strengthen the laws regarding rent impair- ing violations in various ways, including reducing the time in which landlords must correct such violations before their right to collect rent is impaired. Section 2 of Part C of the bill amends subdivisions 10 and 11 of section 713 of the real property actions and proceedings law to ensure that tenants who are illegally evicted have recourse in court to be restored to their residences. Section 3 of Part C of the bill amends subdivisions 2 and 3 of section 732 of the real property actions and proceedings law, to ensure that tenants have an adequate opportunity to respond in non-payment proceedings before a warrant of eviction is issued and executed. Section 4 of Part C of the bill sets forth the effective date for Part C, providing that it shall take effect immediately and shall apply to all pending proceedings on and after such date. PART D Section 1 of Part D of the bill sets forth the legislative findings. Section 2 of Part D of the bill sets forth various provisions regarding the manner in which legal rents shall be determined, the use, retention, and destruction of certain records, the circumstances in which a land- lord shall be deemed to have committed fraud when unlawfully deregulat- ing or failing to register an apartment, and other matters. Section 3 of Part D of the bill sets forth the effective date for Part D, providing that it shall take effect immediately. Section 2 of the bill sets forth a severability clause. Section 3 of the bill sets forth the effective date. JUSTIFICATION: The Housing Stability and Tenant Protection Act of 2019 transformed and strengthened many of our state's laws that protect tenants and provide housing stability. This bill seeks to address gaps in these laws that persist after that landmark legislation in the various ways detailed in the summary of provisions above. LEGISLATIVE HISTORY: 2021-2022: S7213A (Kavanagh) - HOUSING FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Minimal. EFFECTIVE DATE: This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as specifically set forth in the last section of such Part.
2023-S2980 - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 2980 2023-2024 Regular Sessions I N S E N A T E January 26, 2023 ___________ Introduced by Sens. KAVANAGH, HOYLMAN-SIGAL, 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, in relation to establishing the legal regulated rent for the combina- tion of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emer- gency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial reha- bilitation; and to repeal paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, in relation to public hearings by the city rent agency (Part A); to amend the administrative code of the city of New York, chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, and chapter 274 of the laws of 1946, constitut- ing the emergency housing rent control law, in relation to major capi- tal improvements (Part B); to amend the multiple dwelling law, in relation to rent impairing violations; and to amend the real property actions and proceedings law, in relation to eviction proceedings (Part C); and to apply the Housing Stability and Tenant Protection Act of 2019 to rent calculations and rent records maintenance and destruction (Part D) THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act enacts into law components of legislation relating to rent regulation and tenant protection. Each component is wholly contained within a Part identified as Parts A through D. The effective date for each particular provision contained within such Part is set forth in the last section of such Part. Any provision in any section contained within a Part, including the effective date of the Part, which makes reference to a section "of this act", when used in connection with EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07250-01-3
S. 2980 2 that particular component, shall be deemed to mean and refer to the corresponding section of the Part in which it is found. Section three of this act sets forth the general effective date of this act. PART A Section 1. Paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York is REPEALED. § 2. Subdivision c of section 26-511 of the administrative code of the city of New York is amended by adding a new paragraph 15 to read as follows: (15) WHERE AN OWNER COMBINES TWO OR MORE VACANT APARTMENTS FORMERLY SUBJECT TO THIS SECTION, THE LEGAL REGULATED RENT FOR THE COMBINED UNIT MAY NOT EXCEED THE SUM OF THE RENTS OF THE FORMERLY SEPARATE UNITS. WHERE AN OWNER REDUCES THE DIMENSIONS OF A RENT STABILIZED UNIT, OR COMBINES PART OF THAT UNIT WITH A NEIGHBORING UNIT, THE LEGAL REGULATED RENT FOR THE REDUCED UNIT SHALL BE THE PRIOR RENT, REDUCED IN PROPORTION TO THE REDUCTION IN FLOOR AREA; THE RENT FOR ANY EXPANDED NEIGHBORING UNIT MAY NOT EXCEED THE FORMER RENT FOR THAT UNIT. § 3. The opening paragraph of paragraph (a) of subdivision 4 of section 14 of the public housing law, as added by chapter 116 of the laws of 1997, is amended to read as follows: that unless otherwise prohibited by occupancy restrictions based upon income limitations pursuant to federal, state or local law, regulations or other requirements of governmental agencies, any member of the tenant's family, as defined in paragraph (c) of this subdivision, shall succeed to the rights of a tenant under such acts and laws where the tenant has permanently vacated the housing accommodation and such family member has resided with the tenant in the housing accommodation as a primary residence for a period of no less than two years, or where such person is a "senior citizen" or a "disabled person," as defined in para- graph (c) of this subdivision, for a period of no less than one year, immediately prior to the permanent vacating of the housing accommodation by the tenant, or from the inception of the tenancy or commencement of the relationship, if for less than such periods. FOR THE PURPOSES OF THIS PARAGRAPH, "PERMANENTLY VACATED" SHALL MEAN THE DATE WHEN THE TENANT OF RECORD PHYSICALLY MOVES OUT OF THE HOUSING ACCOMMODATION AND PERMANENTLY CEASES TO USE IT AS THEIR PRIMARY RESIDENCE, REGARDLESS OF SUBSEQUENT CONTACTS WITH THE UNIT OR THE SIGNING OF LEASE RENEWALS OR CONTINUATION OF RENT PAYMENTS. The minimum periods of required residency set forth in this subdivision shall not be deemed to be interrupted by any period during which the "family member" temporarily relocates because he or she: § 4. Paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of nineteen seventy-four, is amended to read as follows: (5) housing accommodations in buildings completed or buildings substantially rehabilitated as family units on or after January first, nineteen hundred seventy-four; PROVIDED THAT AN OWNER CLAIMING EXEMPTION FROM RENT STABILIZATION ON THE BASIS OF SUBSTANTIAL REHABILITATION SHALL SEEK APPROVAL FROM STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL WITH- IN ONE YEAR OF THE COMPLETION OF THE SUBSTANTIAL REHABILITATION, OR FOR ANY BUILDING PREVIOUSLY ALLEGED TO HAVE BEEN SUBSTANTIALLY REHABILITATED BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND TWENTY-THREE THAT AMENDED THIS PARAGRAPH, WITHIN SIX MONTHS OF SUCH S. 2980 3 EFFECTIVE DATE, AND ULTIMATELY OBTAIN SUCH APPROVAL, WHICH SHALL BE DENIED ON THE FOLLOWING GROUNDS: (A) THE OWNER OR ITS PREDECESSORS IN INTEREST HAVE ENGAGED IN HARASS- MENT OF TENANTS IN THE FIVE YEARS PRECEDING THE COMPLETION OF THE SUBSTANTIAL REHABILITATION; (B) THE BUILDING WAS NOT IN A SERIOUSLY DETERIORATED CONDITION REQUIR- ING SUBSTANTIAL REHABILITATION; (C) THE OWNER'S OR ITS PREDECESSORS IN INTEREST'S ACTS OR OMISSIONS IN FAILING TO MAINTAIN THE BUILDING MATERIALLY CONTRIBUTED TO THE SERIOUSLY DETERIORATED CONDITION OF THE PREMISES; OR (D) THE SUBSTANTIAL REHABILITATION WORK WAS PERFORMED IN A PIECEMEAL FASHION AND WAS NOT COMPLETED IN A REASONABLE AMOUNT OF TIME, DURING WHICH PERIOD THE BUILDING WAS AT LEAST EIGHTY PERCENT VACANT; § 5. This act shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amendments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York 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. PART B 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 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 S. 2980 4 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 PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE MAJOR CAPITAL IMPROVE- MENT WORK WITH SUCH APPLICATION. ANY APPLICATION SUBMITTED WITH FRAUDU- LENT 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 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 S. 2980 5 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: (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 S. 2980 6 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 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. S. 2980 7 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 26-405 of the city rent and rehabilitation law made by section one of this act shall remain in full force and effect only as long as the public emergency requiring the regulation and control of residential rents and evictions continues, as provided in subdivision 3 of section 1 of the local emergency housing rent control act; provided, further, that the amendments 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. PART C Section 1. Subdivision 3 of section 302-a of the multiple dwelling law, as added by chapter 911 of the laws of 1965, is amended to read as follows: 3. a. If (i) the official records of the department shall note that a rent impairing violation exists OR EXISTED in respect to a multiple dwelling and that notice of such violation has been given by the depart- ment, by mail, to the owner last registered with the department and (ii) such note of the violation [is] WAS not cancelled or removed of record within [six] THREE months after the date of such notice of such violation, then for the period that such violation remains uncorrected after the expiration of said [six] THREE months, no rent shall be recov- ered by any owner for any premises in such multiple dwelling used by a resident thereof for human habitation in which the condition constitut- ing such rent impairing violation exists, provided, however, that if the violation is one that requires approval of plans by the department for the corrective work and if plans for such corrective work shall have been duly filed within [three months] ONE MONTH from the date of notice of such violation by the department to the owner last registered with the department, the [six-months] THREE MONTH period aforementioned shall not begin to run until the date that plans for the corrective work are approved by the department; if plans are not filed within said [three- months] ONE MONTH period or if so filed, they are disapproved and amend- ments are not duly filed within thirty days after the date of notifica- S. 2980 8 tion of the disapproval by the department to the person having filed the plans, the [six-months] THREE MONTH period shall be computed as if no plans whatever had been filed under this proviso. If a condition consti- tuting a rent impairing violation exists in the part of a multiple dwelling used in common by the residents or in the part under the control of the owner thereof, the violation shall be deemed to exist in the respective premises of each resident of the multiple dwelling. b. The provisions of subparagraph a shall not apply if (i) the condi- tion referred to in the department's notice to the owner last registered with the department did not in fact exist, notwithstanding the notation thereof in the records of the department; (ii) the condition which is the subject of the violation has in fact been corrected WITHIN THE THREE MONTH PERIOD REQUIRED BY SUBPARAGRAPH A OF THIS SUBDIVISION, though the note thereof in the department has not been removed or cancelled; (iii) the violation has been caused by the resident from whom rent is sought to be collected or by members of his family or by his guests or by another resident of the multiple dwelling or the members of the family of such other resident or by his guests, or (iv) the resident proceeded against for rent has refused entry to the owner for the purpose of correcting the condition giving rise to the violation. c. To raise a defense under subparagraph a in any action to recover rent or in any special proceeding for the recovery of possession because of non-payment of rent, the resident must affirmatively plead and prove the material facts under subparagraph a[, and must also deposit with the clerk of the court in which the action or proceeding is pending at the time of filing of the resident's answer the amount of rent sought to be recovered in the action or upon which the proceeding to recover possession is based, to be held by the clerk of the court until final disposition of the action or proceeding at which time the rent deposited shall be paid to the owner, if the owner prevails, or be returned to the resident if the resident prevails. Such deposit of rent shall vitiate any right on the part of the owner to terminate the lease or rental agreement of the resident because of nonpayment of rent]. d. If a resident voluntarily pays rent or an installment of rent when he OR SHE would be privileged to withhold the same under subparagraph a, he OR SHE shall [not thereafter] have [any] A claim or cause of action to recover back the rent or installment of rent so paid. A voluntary payment within the meaning hereof shall mean payment other than one made pursuant to a judgment in an action or special proceeding. e. [If upon the trial of any action to recover rent or any special proceeding for the recovery of possession because of non-payment of rent it shall appear that the resident has raised a defense under this section in bad faith, or has caused the violation or has refused entry to the owner for the purpose of correcting the condition giving rise to the violation, the court, in its discretion, may impose upon the resi- dent the reasonable costs of the owner, including counsel fees, in main- taining the action or proceeding not to exceed one hundred dollars.] THE DEPARTMENT SHALL NOTIFY THE RESIDENT AND OWNER WHEN A RENT IMPAIRING VIOLATION HAS BEEN PLACED IN THEIR APARTMENT. THE NOTIFICATION SHALL INCLUDE A LIST OF THE RENT IMPAIRING VIOLATIONS PLACED AND AN EXPLANA- TION OF THE RESIDENT'S RIGHT TO RAISE THE RENT IMPAIRING VIOLATIONS AS A DEFENSE IN ANY ACTION TO RECOVER RENT OR IN ANY SPECIAL PROCEEDING FOR THE RECOVERY OF POSSESSION BECAUSE OF NON-PAYMENT OF RENT. § 2. Subdivisions 10 and 11 of section 713 of the real property actions and proceedings law, subdivision 10 as amended by chapter 467 of S. 2980 9 the laws of 1981 and subdivision 11 as added by chapter 312 of the laws of 1962, are amended to read as follows: 10. The person in possession has entered the property or remains in possession by force or unlawful means and he or SHE OR his OR HER prede- cessor in interest was not in quiet possession for three years before the time of the forcible or unlawful entry or detainer and the petition- er was peaceably in actual possession at the time of the forcible or unlawful entry or in constructive possession at the time of the forcible or unlawful detainer. ANY LAWFUL OCCUPANT, PHYSICALLY OR CONSTRUCTIVELY IN POSSESSION, WHO HAS BEEN EVICTED OR DISPOSSESSED WITHOUT THE COURT PROCESS MANDATED BY SECTION SEVEN HUNDRED ELEVEN OF THIS ARTICLE, MAY COMMENCE A PROCEEDING UNDER THIS SUBDIVISION TO BE RESTORED TO POSSESSION, AND SHALL BE SO RESTORED UPON PROOF THAT THEIR EVICTION WAS UNLAWFUL; no notice to quit shall be required in order to maintain a proceeding under this subdivision. 11. The person in possession entered into possession as an incident to employment by petitioner, and the time agreed upon for such possession has expired or, if no such time was agreed upon, the employment has been terminated[; no notice to quit shall be required in order to maintain the proceeding under this subdivision]. § 3. Subdivisions 2 and 3 of section 732 of the real property actions and proceedings law, as amended by section 14 of part M of chapter 36 of the laws of 2019, are amended to read as follows: 2. If the respondent answers, the clerk shall fix a date for trial or hearing not less than three nor more than eight days after joinder of issue, and shall immediately notify by mail the parties or their attor- neys of such date. If the determination be for the petitioner, the issu- ance of a warrant shall not be stayed for more than five days from such determination, except as provided in section seven hundred fifty-three of this article. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A JUDGMENT IN FAVOR OF THE PETITIONER AND THE ISSUANCE OF THE WARRANT SHALL BE STAYED FOR A PERIOD NOT TO EXCEED TEN DAYS FROM THE DATE OF SERVICE, EXCEPT AS PROVIDED IN SECTION SEVEN HUNDRED FIFTY-THREE OF THIS ARTICLE. 3. If the respondent fails to answer within ten days from the date of service, as shown by the affidavit or certificate of service of the notice of petition and petition, [the judge shall render judgment in favor of the petitioner and] THE PETITIONER MAY MAKE AN APPLICATION FOR A DEFAULT JUDGMENT. UPON THIS APPLICATION, THE CLERK SHALL FIX A DATE FOR INQUEST AND IMMEDIATELY NOTIFY BY MAIL THE PARTIES OR THEIR ATTOR- NEYS OF SUCH DATE. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A JUDGMENT IN FAVOR OF THE PETITIONER AND may stay the issuance of the warrant for a period of not to exceed ten days from the date of service, except as provided in section seven hundred fifty-three of this article. § 4. This act shall take effect immediately and shall apply to all pending proceedings on and after such date. Part D Section 1. Legislative findings. The legislature hereby finds and declares that: S. 2980 10 (a) the pool of rent regulated apartments in New York state contains an unacceptably high number of apartments in which the current rents are based on prior rents that exceeded the legal regulated rent at the time they were charged, but for which remedies were limited under the law in effect before the effective date of the Housing Stability and Tenant Protection Act of 2019 (HSTPA); (b) it is public policy prospectively to reduce, insofar as possi- ble, those rents to a level in line with what they would have been in the absence of the unlawful rent setting and deregulations that were permitted under prior law to go unremedied, and therefore to impose the rent calculation standards of the HSTPA prospectively from the date of its enactment, including in cases where the pre-HSTPA rent has already been established by a court or administrative agency; (c) the purpose of the prospective application of the penalty and record review provisions of the HSTPA is to prevent the perpetual collection of unlawful and inflated rents, and to encourage the volun- tary registration of any rent stabilized apartment for which any prior annual registration statement has not been filed, and to encourage the voluntary recalculation of unreliable pre-HSTPA rents; (d) in light of court decisions arising under the HSTPA, including REGINA METRO V. DHCR, it is public policy that the legislature define clearly the prospective reach of that law, and limit, to the extent required by the constitution, the retroactive reach of that law; (e) despite REGINA, the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents remains unsettled and the subject of litigation, and it is therefore public policy that the legislature codify, without expanding or reducing the liability of landlords under pre-HSTPA law, the standard for applying that exception; (f) the New York state division of housing and community renewal (DHCR) misinterpreted the rent stabilization law for a significant peri- od of time with respect to the regulatory obligations arising from the receipt of J-51 and 421-a tax benefits resulting in the unlawful deregu- lation of tens of thousands of rent-stabilized apartments, the setting of unlawful rents, and the collection of millions of dollars of rent overcharges, during a housing emergency. Both landlords and tenants relied upon the DHCR's misinterpretation of the law. In REGINA, the Court of Appeals settled many of the issues arising from overcharge claims by tenants who were misled into refraining from filing overcharge cases during the period when DHCR's erroneous interpretation of the law was in effect, but left open the issue of whether a landlord's ongoing collection of overcharges and failure to return apartments to rent-sta- bilization, after the law was clarified, should be treated as fraud; (g) the integrity of the registration system for rent regulated hous- ing has been eroded by the use of base date rents, rather than the service and filing of reliable registration statements, to set rents under the law in effect between the enactment of the Rent Regulation Reform Act of 1997 and the HSTPA. It is therefore public policy to impose, prospectively from the date of the enactment of the HSTPA, a rent calculation formula that, insofar as possible, derives the legal regulated rents for apartments from reliable registration statements served upon tenants and made available to the public; and (h) because pre-HSTPA law with respect to the maintenance by landlords of rent records was complex, and has an ongoing impact upon the calcu- lation of post-HSTPA rents, it is necessary to codify the pre-HSTPA law that applied to the destruction of rent records prior to the enactment S. 2980 11 of the HSTPA, and to define clearly the impact of such law upon the prospective calculation of rents under the HSTPA. § 2. (a) The legal rent for all rent stabilized apartments for the period from July 1, 2019 and thereafter shall be determined in accord- ance with Part F of the HSTPA. Where the legal regulated rent for a rent stabilized apartment for the period prior to June 14, 2019 has been determined by any court or administrative agency, that determination shall not foreclose a recalculation of the post-HSTPA rent, except that any pre-HSTPA rent that, as of June 14, 2019, is lower than the rent that would be permitted to be charged under the HSTPA, shall be deemed to be the lawful rent under the HSTPA on June 15, 2019, and shall be used as the basis for calculating subsequent rents under the HSTPA; (b) Subdivision (a) of this section shall apply to all cases, includ- ing those pending as of June 14, 2019 before any court, appellate tribu- nal, or administrative agency in which a claim for rent overcharges or rent arrears has been asserted with respect to rent stabilized housing, the legal regulated rent for the period from June 14, 2019 and thereaft- er shall be determined in accordance with Part F of the HSTPA. The legal regulated rent for the portion of any overcharge claim involving rents paid prior to June 14, 2019 shall be determined under pre-HSTPA law, including the default formula in cases of fraud, as codified herein. (c) Nothing in this act, or the HSTPA, or prior law, shall be construed as restricting, impeding or diminishing the use of records of any age or type, going back to any date that may be relevant, for purposes of determining the status of any apartment under the rent stabilization law; (d) The legal regulated rent payable for the period prior to June 14, 2019 shall be calculated in accordance with the law in effect prior to the HSTPA, including the prior four-year limitation on the consideration of rent records, and including the fraud exception to such limitation and such other exceptions as existed under prior law and under the regu- lations of the New York state division of housing and community renewal. Nothing in this act shall be construed as limiting such exceptions or as limiting the application of any equitable doctrine that extends statutes of limitations generally. With respect to the calculation of legal rents for the period prior to June 14, 2019, an owner shall be deemed to have committed fraud if the owner shall have committed a material breach of any duty, arising under statutory, administrative or common law, to disclose truthfully to any tenant, government agency or judicial or administrative tribunal, the rent, regulatory status, or lease informa- tion, for purposes of claiming an unlawful rent or claiming to have deregulated an apartment. The following conduct shall be presumed to have been the product of such fraud: (1) the unlawful deregulation of any apartment, including such deregulation as results from claiming an unlawful increase such as would have brought the rent over the deregu- lation threshold that existed under prior law, unless the landlord can prove good faith reliance on a directive or ruling by an administrative agency or court; or (2) beginning October 1, 2011, failing to register, as rent stabilized, any apartment in a building receiving J-51 or 421-a benefits; (e) In accordance with the practice of the New York state division of housing and community renewal prior to June 14, 2019, where fraud is not established, base rents of apartments unlawfully deregulated shall be calculated as the average of rents for comparable rent stabilized apart- ments in the building, rather than the default formula applicable to cases involving fraud; S. 2980 12 (f) For the period prior to June 14, 2019, neither the version of subdivision g of section 26-516 of the administrative code of the city of New York then in effect, nor the version of section 2523.7 of the rent stabilization code (9 NYCRR 2523.7) then in effect shall be construed as permitting the destruction of rent records for units that have not been properly and timely registered. Where records have been permitted to be destroyed by virtue of proper registration, and no other law required the maintenance of such records, and where the owner has proven that such records were actually destroyed in accordance with prior law and that such destruction took place prior to June 15, 2019, the registration served and filed prior to such lawful destruction of records shall be presumed to be reliable, for purposes of any post-HSTPA calculation of the rent, but that presumption shall be rebuttable. The parties shall be entitled to discovery of any evidence found to be reasonably necessary to demonstrate the legal rent. Nothing in this subdivision shall be interpreted as authorizing the destruction of any record, that under prior law was relevant to establishing (1) the status of an apartment as regulated or unregulated; (2) the presence or absence of fraud with respect to renting any housing accommodation; (3) the presence or absence of willfulness in the collection of overcharges; (4) the useful life of any item, the replacement of which is claimed by the owner to qualify an apartment for a rent increase; (5) the duration of any tenancy, such as would establish whether an owner was entitled under prior law to a longevity increase; or (6) compliance with any law that, independently of the rent stabilization law, required or requires the maintenance of such records. Where the calculation of the rent is dependent upon records that the owner has improperly destroyed, includ- ing where the records were destroyed without the apartment having been registered, the rent shall be calculated in accordance with the default formula. § 3. This act shall take effect immediately. § 2. Severability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review, the judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, para- graph, section or part of this act directly involved in the controversy in which the judgment shall have been rendered. § 3. This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as specifically set forth in the last section of such Parts.
co-Sponsors
(D) 30th Senate District
(D, WF) 47th Senate District
(D, WF) 31st Senate District
(D, WF) 28th Senate District
2023-S2980A - Details
2023-S2980A - Sponsor Memo
BILL NUMBER: S2980A SPONSOR: KAVANAGH 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 establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emergency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial rehabilitation; and to repeal paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, in relation to public hearings by the city rent agency (Part A); to amend the administrative code of the city of New York, chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, and chapter 274 of the laws of 1946, constituting the emergency housing rent control law, in relation to major capital improvements (Part B); to amend the multiple dwelling law, in relation to rent impairing violations; and to amend the real property actions and proceedings law, in relation to eviction proceedings (Part C); and to apply the Housing Stability and Tenant Protection Act of 2019 to rent calculations and rent records maintenance and destruction (Part D)
PURPOSE: The legislature passed the Housing Stability and Tenant Protection Act of 2019 to transform and strengthen many of our state's laws that protect tenants and provide housing stability. This bill seeks to address certain gaps in these laws that persist after that landmark legislation and to make some technical corrections. SUMMARY OF PROVISIONS: Section 1 of the bill sets forth the structure of the bill, with four components Parts A, B, C, and D. PART A Section 1 of Part A of the bill repeals paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, which requires public hearings prior to establishing maximum base rents for rent controlled apartments; pursuant to the HSTPA, MBRs are set in a different manner. Section 2 of Part A of the bill amends subdivision c of section 26-511 of the administrative code of the city of New York by adding a new para- graph 15. Part (a) of the new paragraph 15 provides that where a landlord combines two or more vacant rent stabilized apartments, the legal regulated rent for the combined apartment shall be the sum of the rents of the formerly separate apartments. If a non-regulated apartment is combined with a regulated apartment, the resulting apartment shall be subject to rent regulation. Part (b) of the new paragraph 15 provides that where a landlord substan- tially increases the outer dimensions of a unit, the initial legal regu- lated rent for that unit shall be its prior rent plus a percentage of rent that is equal to the percentage by which the unit has increased. Other authorized increases may also apply. Part (c) of the new paragraph 15 provides for the denial of rent increases if vacancy had previously occurred due to harassment, fraud, or other acts of evasion. Part (d) of the new paragraph 15 provides that where the units are combined pursuant to a federal, state, or local regulatory agreement, the rent of the combined units shall be the amount of an initial rent set by the regulatory agency. Part (e) of the new paragraph 15 provides that where a landlord substan- tially reduces the dimensions of a unit, the initial legal regulated rent for the reduced apartment shall be the prior rent reduced in proportion to the reduction in floor area. Other authorized increases may also apply. Part (f) of the new paragraph 15 specifies guidelines as to the manner in which provisions governing individual apartment improvements may apply to the combination of units. Part (g) of the new paragraph 15 requires owners to maintain records and rent histories of all combined apartments before and after combination. Section 2 of Part A amends subdivision (a) of section 10-b of the emer- gency tenant protection act of 1974 by adding a new paragraph 13 in the same manner as Section 2 of the bill amends the New York city adminis- trative code, as described above. Section 3 of Part A of the bill amends the opening paragraph of para- graph (a) of subdivision 4 of section 14 of the public housing law to define the term "permanently vacated" for the purpose of determining succession rights of a member of a tenant's family. Section 4 of Part A of the bill amends paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of 1974 to clarify and limit the circumstances in which a landlord may claim exemption from rent stabili- zation on the basis of substantial rehabilitation, and to require approval for such claim by the division of housing and community renewal. Section 5 of Part A of the bill sets forth the effective date for Part A, providing that it shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amend- ments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York 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. PART B Sections 1 through 4 of Part B of the bill all amend parallel provisions of the state's various laws regulating rent to provide that no applica- tion for a major capital improvement rent increase shall be approved unless the landlord files all copies of valid permits pertaining to the major capital improvement work with such application. Section 1 of Part B amends subparagraph (g) of paragraph 1 of subdivi- sion g of section 26-405 of the administrative code of the city of New York for that purpose. Section 2 of Part B of the bill amends paragraph 6 of subdivision c of section 26-511 of the administrative code of the city of New York for the same purpose. Section 3 of Part B of the bill 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, for the same purpose. Section 4 of Part B of the bill 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, for the same purpose. Section 5 of Part B of the bill sets forth the effective date for Part B, providing that it shall take effect immediately; provided that the amendments to section 26-405 of the city rent and rehabilitation law made by section one of this act shall remain in full force and effect only as long as the public emergency requiring the regulation and control of residential rents and evictions continues, as provided in subdivision 3 of section 1 of the local emergency housing rent control act; provided, further, that the amendments 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. PART C Section 1 of Part C of the bill amends subdivision 3 of section 302-a of the multiple dwelling law to strengthen the laws regarding rent impair- ing violations in various ways, including reducing the time in which landlords must correct such violations before their right to collect rent is impaired. Section 2 of Part C of the bill amends subdivisions 10 and 11 of section 713 of the real property actions and proceedings law to ensure that tenants who are illegally evicted have recourse in court to be restored to their residences. Section 3 of Part C of the bill amends subdivisions 2 and 3 of section 732 of the real property actions and proceedings law, to ensure that tenants have an adequate opportunity to respond in non-payment proceedings before a warrant of eviction is issued and executed. If a tenant does not initially answer the petition served to him and her, rather than an automatic judgment in favor of the landlord, this bill would require the setting and notification of a court date to be mailed to both parties or their attorneys. Only upon the tenant's failure to appear in court may a judge rule in favor of the landlord and grant an eviction warrant. Section 4 of Part C of the bill sets forth the effective date for Part C, providing that it shall take effect immediately and shall apply to all pending proceedings on and after such date. PART D Section 1 of Part D of the bill sets forth the legislative findings. Section 2 of Part D of the bill sets forth various provisions regarding the manner in which legal ò rents shall be determined, the use, retention, and destruction of certain records, the circumstances in which a landlord shall be deemed to have committed fraud when unlawfully deregulating or failing to register an apartment, and other matters. Section 3 of Part D of the bill sets forth the effective date for Part D, providing that it shall take effect immediately. Section 2 of the bill sets forth a severability clause. Section 3 of the bill sets forth the effective date (below). JUSTIFICATION: The Housing Stability and Tenant Protection Act of 2019 (HSTPA) trans- formed and strengthened many of the state's laws that protect tenants and provide housing stability. This bill seeks to address certain gaps in these laws that persist after that landmark legislation in the vari- ous ways detailed in the summary of provisions above and to make some technical corrections. Part A Section 1 Under HSTPA, maximum base rent increases for rent-controlled apartments are calculated based on the lower of the average of the past five years' NYC Rent Guidelines Board one-year rent increase determinations or 7.5%. Repealing the requirement for a public hearing would align the process with current law and prevent confusion; with the changes enacted in HSTPA, the hearings no longer serve any purpose. Section 2 On August 31, 2022, NYS Homes and Community Renewal (HCR) released proposed updates to the regulations authorized under the rent stabiliza- tion laws, including language that would address the combination of rent-regulated units (a practice sometimes popularly known as "franken- steining"), which has enabled owners to set a new first rent for the combined unit, often at a much higher level than the rents of the once separate apartments. Adopting NCR's proposed regulations in statute would address this issue and ensure combined units remain at a level of affordability that matches the increases or reductions in unit size. Section 3 This part also defines what constitutes "permanently vacated," with the goal of providing clarity on instances where a tenant's move-out may not correspond with the end of a lease or the termination of rent payments. This is needed to address the fact that courts have differed in their interpretation of current law, with the first and second appellate divi- sions holding different views. The provisions of this bill would conform the rule to the second department's position, to ensure that family members eligible for succession do not lose their rights because of a delay in reporting vacatur to the landlord. Section 4 By requiring owners to seek and secure approval from HCR prior to claim- ing rent stabilization exemption on the basis of substantial rehabili- tation, the added level of agency oversight would prevent the destabili- zation of units where owners fail to substantiate their claims of having substantial work performed that merits exemption from rent stabiliza- tion. Part B By requiring landlords to furnish proof to HCR that all necessary permits associated with performing major capital improvement (MCI) work have been filed, the provisions of this Part would prevent claims for MCI rent increases that cannot be corroborated through permit records -- a form of documentation that serves as proof of work. Part C Section 1 A rent impairing violation is defined as "a condition in a multiple dwelling which, in the opinion of HCR, constitutes, or if not promptly corrected, will constitute, a fire hazard or a serious threat to the life, health or safety of occupants thereof." This is a serious class of violations that needs prompt actions to cure. Reducing the time required for building owners to correct rent impairing violations is therefore in the interest of tenants' health and safety. Section 2 Tenants who have been illegally evicted currently do not have recourse in court to have their tenancy restored. This amendment would grant such tenants the right to commence a court proceeding to seek the restoration of possession of their units, an important step toward combating illegal eviction and returning tenants to their homes. Section 3 For tenants who have been served a notice for nonpayment of rent, the proper process for reaching a resolution is through housing court. This amendment would ensure tenants have adequate opportunity to respond before a judge issues an eviction warrant. Part D Part F of the HSTPA allowed HCR or a court to review six years of rent history when determining rent overcharges. Since then, the Court of Appeals limited the retroactive application of these provisions when it comes to overcharges and the requirement that property owners reimburse tenants for illegally charged rents. This amendment will help clarify the purpose of Part F of HSTPA in order to effectuate the legislature's original intent in enacting the provision, in a manner consistent with the Court of Appeals ruling. These amendments will address the Court's concerns regarding constitu- tional limitations, and will make litigation less necessary with regard to certain issues that have not been settled by the courts. In partic- ular, this bill will clarify the prospective reach of certain provisions of Part F, in light of the court decisions. It will also codify the standard for applying a fraud exception to the four-year rule that was in place before HSTPA was enacted. LEGISLATIVE HISTORY: 2021-2022: S7213A (Kavanagh) - referred to Housing FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Minimal. EFFECTIVE DATE: This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as specifically set forth in the last section of such Parts.
2023-S2980A - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 2980--A 2023-2024 Regular Sessions I N S E N A T E January 26, 2023 ___________ Introduced by Sens. KAVANAGH, HOYLMAN-SIGAL, RIVERA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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 establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emergency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial reha- bilitation; and to repeal paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, in relation to public hearings by the city rent agency (Part A); to amend the administrative code of the city of New York, chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, and chapter 274 of the laws of 1946, constitut- ing the emergency housing rent control law, in relation to major capi- tal improvements (Part B); to amend the multiple dwelling law, in relation to rent impairing violations; and to amend the real property actions and proceedings law, in relation to eviction proceedings (Part C); and to apply the Housing Stability and Tenant Protection Act of 2019 to rent calculations and rent records maintenance and destruction (Part D) THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act enacts into law components of legislation relating to rent regulation and tenant protection. Each component is wholly contained within a Part identified as Parts A through D. The effective date for each particular provision contained within such Part is set EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07250-06-3
S. 2980--A 2 forth in the last section of such Part. Any provision in any section contained within a Part, including the effective date of the Part, which makes reference to a section "of this act", when used in connection with that particular component, shall be deemed to mean and refer to the corresponding section of the Part in which it is found. Section three of this act sets forth the general effective date of this act. PART A Section 1. Paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York is REPEALED. § 2. Subdivision c of section 26-511 of the administrative code of the city of New York is amended by adding a new paragraph 15 to read as follows: (15) (A) WHERE AN OWNER COMBINES TWO OR MORE VACANT HOUSING ACCOMMO- DATIONS OR COMBINES A VACANT HOUSING ACCOMMODATION WITH AN OCCUPIED ACCOMMODATION, SUCH INITIAL RENT FOR SUCH NEW HOUSING ACCOMMODATION SHALL BE THE COMBINED LEGAL RENT FOR BOTH PREVIOUS HOUSING ACCOMMO- DATIONS, SUBJECT TO ANY APPLICABLE GUIDELINE INCREASES AND ANY OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY INDIVIDUAL APARTMENT IMPROVEMENT INCREASES APPLICABLE FOR BOTH HOUSING ACCOMMODATIONS. IF AN OWNER COMBINES A RENT REGULATED ACCOMMODATION WITH AN APARTMENT NOT SUBJECT TO RENT REGULATION, THE RESULTING APARTMENT SHALL BE SUBJECT TO THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR. IF AN OWNER INCREASES THE AREA OF AN APARTMENT NOT SUBJECT TO RENT REGULATION BY ADDING SPACE THAT WAS PREVIOUSLY PART OF A RENT REGULATED APARTMENT, EACH APARTMENT SHALL BE SUBJECT TO THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR. (B) WHERE AN OWNER SUBSTANTIALLY INCREASES THE OUTER DIMENSION OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, INCREASED BY A PERCENTAGE THAT IS EQUAL TO THE PERCENTAGE INCREASE IN THE DWELLING SPACE AND SUCH OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE UNIT PRIOR TO THE ALTERATION OF THE OUTER DIMENSIONS. (C) NOTWITHSTANDING SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH, SUCH INCREASES MAY BE DENIED BASED ON THE OCCURRENCE OF SUCH VACANCY DUE TO HARASSMENT, FRAUD, OR OTHER ACTS OF EVASION WHICH MAY REQUIRE THAT SUCH RENT BE SET IN ACCORDANCE WITH THIS SUBDIVISION. (D) WHERE THE VACANT HOUSING ACCOMMODATIONS ARE COMBINED, MODIFIED, DIVIDED OR THE DIMENSION OF SUCH HOUSING ACCOMMODATION OTHERWISE ALTERED AND THESE CHANGES ARE BEING MADE PURSUANT TO A PRESERVATION REGULATORY AGREEMENT WITH A FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR INSTRU- MENTALITY, THE RENT STABILIZED RENTS CHARGED THEREAFTER SHALL BE BASED ON AN INITIAL RENT SET BY SUCH AGENCY OR INSTRUMENTALITY. (E) WHERE AN OWNER SUBSTANTIALLY DECREASES THE OUTER DIMENSIONS OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, DECREASED BY THE SAME PERCENTAGE THE SQUARE FOOTAGE OF THE ORIGINAL APARTMENT WAS DECREASED BY AND SUCH OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE APARTMENT PRIOR TO THE ALTERATION OF THE OUTER DIMEN- SIONS. (F)(I) WHEN AN OWNER COMBINES TWO OR MORE RENT REGULATED APARTMENTS, THE OWNER MAY USE EACH OF THE PREVIOUS APARTMENTS' REMAINING INDIVIDUAL APARTMENT IMPROVEMENT ALLOWANCES FOR THE PURPOSES OF A TEMPORARY INDI- S. 2980--A 3 VIDUAL APARTMENT IMPROVEMENT RENT INCREASE. THE OWNER SHALL SUBSEQUENTLY DESIGNATE A SURVIVING APARTMENT FOR THE PURPOSES OF REGISTRATION THAT HAS THE SAME APARTMENT NUMBER AS ONE OF THE PRIOR APARTMENTS. IF THAT PRIOR APARTMENT HAS ANY REIMBURSABLE INDIVIDUAL APARTMENT IMPROVEMENT MONEY REMAINING AFTER THE COMBINATION, THAT MONEY MAY BE REIMBURSED FOR FUTURE INDIVIDUAL APARTMENT IMPROVEMENTS UNDERTAKEN WITHIN THE SUBSE- QUENT FIFTEEN YEARS FOLLOWING THE COMBINATION. (II) IN ORDER FOR AN OWNER TO QUALIFY FOR A TEMPORARY INDIVIDUAL APARTMENT IMPROVEMENT RENT INCREASE WHEN APARTMENTS ARE COMBINED, THE REQUIREMENTS FOR AN INDIVIDUAL APARTMENT IMPROVEMENT, INCLUDING ALL NOTIFICATION REQUIREMENTS UNDER THIS CHAPTER SHALL BE MET. (G) OWNERS SHALL MAINTAIN THE RECORDS AND RENT HISTORIES OF ALL COMBINED APARTMENTS, BOTH PRIOR TO AND POST COMBINATION, FOR THE PURPOSES OF RENT SETTING, OVERCHARGE AND ALL OTHER PROCEEDINGS TO WHICH THE RECORDS ARE APPLICABLE. § 2-a. Subdivision (a) of section 10-b of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, is amended by adding a new paragraph 13 to read as follows: 13. (I) WHERE AN OWNER COMBINES TWO OR MORE VACANT HOUSING ACCOMMO- DATIONS OR COMBINES A VACANT HOUSING ACCOMMODATION WITH AN OCCUPIED ACCOMMODATION, SUCH INITIAL RENT FOR SUCH NEW HOUSING ACCOMMODATION SHALL BE THE COMBINED LEGAL RENT FOR BOTH PREVIOUS HOUSING ACCOMMO- DATIONS, SUBJECT TO ANY APPLICABLE GUIDELINE INCREASES AND ANY OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY INDIVIDUAL APARTMENT IMPROVEMENT INCREASES APPLICABLE FOR BOTH HOUSING ACCOMMODATIONS. IF AN OWNER COMBINES A RENT REGULATED ACCOMMODATION WITH AN APARTMENT NOT SUBJECT TO RENT REGULATION, THE RESULTING APARTMENT SHALL BE SUBJECT TO THIS ACT. IF AN OWNER INCREASES THE AREA OF AN APARTMENT NOT SUBJECT TO RENT REGULATION BY ADDING SPACE THAT WAS PREVIOUSLY PART OF A RENT REGU- LATED APARTMENT, EACH APARTMENT SHALL BE SUBJECT TO THIS ACT. (II) WHERE AN OWNER SUBSTANTIALLY INCREASES THE OUTER DIMENSION OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, INCREASED BY A PERCENTAGE THAT IS EQUAL TO THE PERCENTAGE INCREASE IN THE DWELLING SPACE AND SUCH OTHER INCREASES AUTHORIZED BY THIS ACT INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE UNIT PRIOR TO THE ALTERATION OF THE OUTER DIMENSIONS. (III) NOTWITHSTANDING SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH, SUCH INCREASES MAY BE DENIED BASED ON THE OCCURRENCE OF SUCH VACANCY DUE TO HARASSMENT, FRAUD, OR OTHER ACTS OF EVASION WHICH MAY REQUIRE THAT SUCH RENT BE SET IN ACCORDANCE WITH SECTION TWELVE OF THIS ACT. (IV) WHERE THE VACANT HOUSING ACCOMMODATIONS ARE COMBINED, MODIFIED, DIVIDED OR THE DIMENSION OF SUCH HOUSING ACCOMMODATION OTHERWISE ALTERED AND THESE CHANGES ARE BEING MADE PURSUANT TO A PRESERVATION REGULATORY AGREEMENT WITH A FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR INSTRU- MENTALITY, THE RENT STABILIZED RENTS CHARGED THEREAFTER SHALL BE BASED ON AN INITIAL RENT SET BY SUCH AGENCY OR INSTRUMENTALITY. (V) WHERE AN OWNER SUBSTANTIALLY DECREASES THE OUTER DIMENSIONS OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, DECREASED BY THE SAME PERCENTAGE THE SQUARE FOOTAGE OF THE ORIGINAL APARTMENT WAS DECREASED BY AND SUCH OTHER INCREASES AUTHORIZED BY THIS ACT INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE APARTMENT PRIOR TO THE ALTERATION OF THE OUTER DIMEN- SIONS. S. 2980--A 4 (VI)(1) WHEN AN OWNER COMBINES TWO OR MORE RENT REGULATED APARTMENTS, THE OWNER MAY USE EACH OF THE PREVIOUS APARTMENTS' REMAINING INDIVIDUAL APARTMENT IMPROVEMENT ALLOWANCES FOR THE PURPOSES OF A TEMPORARY INDI- VIDUAL APARTMENT IMPROVEMENT RENT INCREASE. THE OWNER SHALL SUBSEQUENTLY DESIGNATE A SURVIVING APARTMENT FOR THE PURPOSES OF REGISTRATION THAT HAS THE SAME APARTMENT NUMBER AS ONE OF THE PRIOR APARTMENTS. IF THAT PRIOR APARTMENT HAS ANY REIMBURSABLE INDIVIDUAL APARTMENT IMPROVEMENT MONEY REMAINING AFTER THE COMBINATION, THAT MONEY MAY BE REIMBURSED FOR FUTURE INDIVIDUAL APARTMENT IMPROVEMENTS UNDERTAKEN WITHIN THE SUBSE- QUENT FIFTEEN YEARS FOLLOWING THE COMBINATION. (2) IN ORDER FOR AN OWNER TO QUALIFY FOR A TEMPORARY INDIVIDUAL APART- MENT IMPROVEMENT RENT INCREASE WHEN APARTMENTS ARE COMBINED, THE REQUIREMENTS FOR AN INDIVIDUAL APARTMENT IMPROVEMENT, INCLUDING ALL NOTIFICATION REQUIREMENTS UNDER THIS ACT SHALL BE MET. (VII) OWNERS SHALL MAINTAIN THE RECORDS AND RENT HISTORIES OF ALL COMBINED APARTMENTS, BOTH PRIOR TO AND POST COMBINATION, FOR THE PURPOSES OF RENT SETTING, OVERCHARGE AND ALL OTHER PROCEEDINGS TO WHICH THE RECORDS ARE APPLICABLE. § 3. The opening paragraph of paragraph (a) of subdivision 4 of section 14 of the public housing law, as added by chapter 116 of the laws of 1997, is amended to read as follows: that unless otherwise prohibited by occupancy restrictions based upon income limitations pursuant to federal, state or local law, regulations or other requirements of governmental agencies, any member of the tenant's family, as defined in paragraph (c) of this subdivision, shall succeed to the rights of a tenant under such acts and laws where the tenant has permanently vacated the housing accommodation and such family member has resided with the tenant in the housing accommodation as a primary residence for a period of no less than two years, or where such person is a "senior citizen" or a "disabled person," as defined in para- graph (c) of this subdivision, for a period of no less than one year, immediately prior to the permanent vacating of the housing accommodation by the tenant, or from the inception of the tenancy or commencement of the relationship, if for less than such periods. FOR THE PURPOSES OF THIS PARAGRAPH, "PERMANENTLY VACATED" SHALL MEAN THE DATE WHEN THE TENANT OF RECORD PHYSICALLY MOVES OUT OF THE HOUSING ACCOMMODATION AND PERMANENTLY CEASES TO USE IT AS THEIR PRIMARY RESIDENCE, REGARDLESS OF SUBSEQUENT CONTACTS WITH THE UNIT OR THE SIGNING OF LEASE RENEWALS OR CONTINUATION OF RENT PAYMENTS. The minimum periods of required residency set forth in this subdivision shall not be deemed to be interrupted by any period during which the "family member" temporarily relocates because he or she: § 4. Paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, is amended to read as follows: (5) housing accommodations in buildings completed or buildings substantially rehabilitated as family units on or after January first, nineteen hundred seventy-four; PROVIDED THAT AN OWNER CLAIMING EXEMPTION FROM RENT STABILIZATION ON THE BASIS OF SUBSTANTIAL REHABILITATION SHALL SEEK APPROVAL FROM STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL WITH- IN ONE YEAR OF THE COMPLETION OF THE SUBSTANTIAL REHABILITATION, OR FOR ANY BUILDING PREVIOUSLY ALLEGED TO HAVE BEEN SUBSTANTIALLY REHABILITATED BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND TWENTY-THREE THAT AMENDED THIS PARAGRAPH, WITHIN SIX MONTHS OF SUCH EFFECTIVE DATE, AND ULTIMATELY OBTAIN SUCH APPROVAL, WHICH SHALL BE DENIED ON THE FOLLOWING GROUNDS: S. 2980--A 5 (A) THE OWNER OR ITS PREDECESSORS IN INTEREST HAVE ENGAGED IN HARASS- MENT OF TENANTS IN THE FIVE YEARS PRECEDING THE COMPLETION OF THE SUBSTANTIAL REHABILITATION; (B) THE BUILDING WAS NOT IN A SERIOUSLY DETERIORATED CONDITION REQUIR- ING SUBSTANTIAL REHABILITATION; (C) THE OWNER'S OR ITS PREDECESSORS IN INTEREST'S ACTS OR OMISSIONS IN FAILING TO MAINTAIN THE BUILDING MATERIALLY CONTRIBUTED TO THE SERIOUSLY DETERIORATED CONDITION OF THE PREMISES; OR (D) THE SUBSTANTIAL REHABILITATION WORK WAS PERFORMED IN A PIECEMEAL FASHION AND WAS NOT COMPLETED IN A REASONABLE AMOUNT OF TIME, DURING WHICH PERIOD THE BUILDING WAS AT LEAST EIGHTY PERCENT VACANT; § 5. This act shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amendments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York 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. PART B 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 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 S. 2980--A 6 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 PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE MAJOR CAPITAL IMPROVE- MENT WORK WITH SUCH APPLICATION. ANY APPLICATION SUBMITTED WITH FRAUDU- LENT 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 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 S. 2980--A 7 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: (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- S. 2980--A 8 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 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. S. 2980--A 9 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 26-405 of the city rent and rehabilitation law made by section one of this act shall remain in full force and effect only as long as the public emergency requiring the regulation and control of residential rents and evictions continues, as provided in subdivision 3 of section 1 of the local emergency housing rent control act; provided, further, that the amendments 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. PART C Section 1. Subdivision 3 of section 302-a of the multiple dwelling law, as added by chapter 911 of the laws of 1965, is amended to read as follows: 3. a. If (i) the official records of the department shall note that a rent impairing violation exists OR EXISTED in respect to a multiple dwelling and that notice of such violation has been given by the depart- ment, by mail, to the owner last registered with the department and (ii) such note of the violation [is] WAS not cancelled or removed of record within [six] THREE months after the date of such notice of such violation, then for the period that such violation remains uncorrected after the expiration of said [six] THREE months, no rent shall be recov- ered by any owner for any premises in such multiple dwelling used by a resident thereof for human habitation in which the condition constitut- ing such rent impairing violation exists, provided, however, that if the violation is one that requires approval of plans by the department for the corrective work and if plans for such corrective work shall have been duly filed within [three months] ONE MONTH from the date of notice of such violation by the department to the owner last registered with the department, the [six-months] THREE MONTH period aforementioned shall not begin to run until the date that plans for the corrective work are approved by the department; if plans are not filed within said [three- months] ONE MONTH period or if so filed, they are disapproved and amend- ments are not duly filed within thirty days after the date of notifica- tion of the disapproval by the department to the person having filed the plans, the [six-months] THREE MONTH period shall be computed as if no S. 2980--A 10 plans whatever had been filed under this proviso. If a condition consti- tuting a rent impairing violation exists in the part of a multiple dwelling used in common by the residents or in the part under the control of the owner thereof, the violation shall be deemed to exist in the respective premises of each resident of the multiple dwelling. b. The provisions of subparagraph a shall not apply if (i) the condi- tion referred to in the department's notice to the owner last registered with the department did not in fact exist, notwithstanding the notation thereof in the records of the department; (ii) the condition which is the subject of the violation has in fact been corrected WITHIN THE THREE MONTH PERIOD REQUIRED BY SUBPARAGRAPH A OF THIS SUBDIVISION, though the note thereof in the department has not been removed or cancelled; (iii) the violation has been caused by the resident from whom rent is sought to be collected or by members of his family or by his guests or by another resident of the multiple dwelling or the members of the family of such other resident or by his guests, or (iv) the resident proceeded against for rent has refused entry to the owner for the purpose of correcting the condition giving rise to the violation. c. To raise a defense under subparagraph a in any action to recover rent or in any special proceeding for the recovery of possession because of non-payment of rent, the resident must affirmatively plead and prove the material facts under subparagraph a[, and must also deposit with the clerk of the court in which the action or proceeding is pending at the time of filing of the resident's answer the amount of rent sought to be recovered in the action or upon which the proceeding to recover possession is based, to be held by the clerk of the court until final disposition of the action or proceeding at which time the rent deposited shall be paid to the owner, if the owner prevails, or be returned to the resident if the resident prevails. Such deposit of rent shall vitiate any right on the part of the owner to terminate the lease or rental agreement of the resident because of nonpayment of rent]. d. If a resident voluntarily pays rent or an installment of rent when he OR SHE would be privileged to withhold the same under subparagraph a, he OR SHE shall [not thereafter] have [any] A claim or cause of action to recover back the rent or installment of rent so paid. A voluntary payment within the meaning hereof shall mean payment other than one made pursuant to a judgment in an action or special proceeding. e. [If upon the trial of any action to recover rent or any special proceeding for the recovery of possession because of non-payment of rent it shall appear that the resident has raised a defense under this section in bad faith, or has caused the violation or has refused entry to the owner for the purpose of correcting the condition giving rise to the violation, the court, in its discretion, may impose upon the resi- dent the reasonable costs of the owner, including counsel fees, in main- taining the action or proceeding not to exceed one hundred dollars.] THE DEPARTMENT SHALL NOTIFY THE RESIDENT AND OWNER WHEN A RENT IMPAIRING VIOLATION HAS BEEN PLACED IN THEIR APARTMENT. THE NOTIFICATION SHALL INCLUDE A LIST OF THE RENT IMPAIRING VIOLATIONS PLACED AND AN EXPLANA- TION OF THE RESIDENT'S RIGHT TO RAISE THE RENT IMPAIRING VIOLATIONS AS A DEFENSE IN ANY ACTION TO RECOVER RENT OR IN ANY SPECIAL PROCEEDING FOR THE RECOVERY OF POSSESSION BECAUSE OF NON-PAYMENT OF RENT. § 2. Subdivisions 10 and 11 of section 713 of the real property actions and proceedings law, subdivision 10 as amended by chapter 467 of the laws of 1981 and subdivision 11 as added by chapter 312 of the laws of 1962, are amended to read as follows: S. 2980--A 11 10. The person in possession has entered the property or remains in possession by force or unlawful means and he or SHE OR his OR HER prede- cessor in interest was not in quiet possession for three years before the time of the forcible or unlawful entry or detainer and the petition- er was peaceably in actual possession at the time of the forcible or unlawful entry or in constructive possession at the time of the forcible or unlawful detainer. ANY LAWFUL OCCUPANT, PHYSICALLY OR CONSTRUCTIVELY IN POSSESSION, WHO HAS BEEN EVICTED OR DISPOSSESSED WITHOUT THE COURT PROCESS MANDATED BY SECTION SEVEN HUNDRED ELEVEN OF THIS ARTICLE, MAY COMMENCE A PROCEEDING UNDER THIS SUBDIVISION TO BE RESTORED TO POSSESSION, AND SHALL BE SO RESTORED UPON PROOF THAT THEIR EVICTION WAS UNLAWFUL; no notice to quit shall be required in order to maintain a proceeding under this subdivision. 11. The person in possession entered into possession as an incident to employment by petitioner, and the time agreed upon for such possession has expired or, if no such time was agreed upon, the employment has been terminated[; no notice to quit shall be required in order to maintain the proceeding under this subdivision]. § 3. Subdivisions 2 and 3 of section 732 of the real property actions and proceedings law, as amended by section 14 of part M of chapter 36 of the laws of 2019, are amended to read as follows: 2. If the respondent answers, the clerk shall fix a date for trial or hearing not less than three nor more than eight days after joinder of issue, and shall immediately notify by mail the parties or their attor- neys of such date. If the determination be for the petitioner, the issu- ance of a warrant shall not be stayed for more than five days from such determination, except as provided in section seven hundred fifty-three of this article. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THIRTY-TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A JUDG- MENT IN FAVOR OF THE PETITIONER AND THE ISSUANCE OF THE WARRANT SHALL BE STAYED FOR A PERIOD NOT TO EXCEED TEN DAYS FROM THE DATE OF SERVICE, EXCEPT AS PROVIDED IN SECTION SEVEN HUNDRED FIFTY-THREE OF THIS ARTICLE. 3. If the respondent fails to answer within ten days from the date of service, as shown by the affidavit or certificate of service of the notice of petition and petition, [the judge shall render judgment in favor of the petitioner and] THE PETITIONER MAY MAKE AN APPLICATION FOR A DEFAULT JUDGMENT. UPON THIS APPLICATION, THE CLERK SHALL FIX A DATE FOR INQUEST AND IMMEDIATELY NOTIFY BY MAIL THE PARTIES OR THEIR ATTOR- NEYS OF SUCH DATE. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THIRTY-TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A JUDG- MENT IN FAVOR OF THE PETITIONER AND may stay the issuance of the warrant for a period of not to exceed ten days from the date of service, except as provided in section seven hundred fifty-three of this article. § 4. This act shall take effect immediately and shall apply to all pending proceedings on and after such date. PART D Section 1. Legislative findings. The legislature hereby finds and declares that: (a) the pool of rent regulated apartments in New York state contains an unacceptably high number of apartments in which the current rents are based on prior rents that exceeded the legal regulated rent at the time they were charged, but for which remedies were limited under the law in S. 2980--A 12 effect before the effective date of the Housing Stability and Tenant Protection Act of 2019 (HSTPA); (b) it is public policy prospectively to reduce, insofar as possible, those rents to a level in line with what they would have been in the absence of the unlawful rent setting and deregulations that were permit- ted under prior law to go unremedied, and therefore to impose the rent calculation standards of the HSTPA prospectively from the date of its enactment, including in cases where the pre-HSTPA rent has already been established by a court or administrative agency; (c) the purpose of the prospective application of the penalty and record review provisions of the HSTPA is to prevent the perpetual collection of unlawful and inflated rents, and to encourage the volun- tary registration of any rent stabilized apartment for which any prior annual registration statement has not been filed, and to encourage the voluntary recalculation of unreliable pre-HSTPA rents; (d) in light of court decisions arising under the HSTPA, including REGINA METRO V. DHCR, it is public policy that the legislature define clearly the prospective reach of that law, and limit, to the extent required by the constitution, the retroactive reach of that law; (e) despite REGINA, the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents remains unsettled and the subject of litigation, and it is therefore public policy that the legislature codify, without expanding or reducing the liability of landlords under pre-HSTPA law, the standard for applying that exception; (f) the New York state division of housing and community renewal (DHCR) misinterpreted the rent stabilization law for a significant peri- od of time with respect to the regulatory obligations arising from the receipt of J-51 and 421-a tax benefits resulting in the unlawful deregu- lation of tens of thousands of rent-stabilized apartments, the setting of unlawful rents, and the collection of millions of dollars of rent overcharges, during a housing emergency. Both landlords and tenants relied upon the DHCR's misinterpretation of the law. In REGINA, the Court of Appeals settled many of the issues arising from overcharge claims by tenants who were misled into refraining from filing overcharge cases during the period when DHCR's erroneous interpretation of the law was in effect, but left open the issue of whether a landlord's ongoing collection of overcharges and failure to return apartments to rent-sta- bilization, after the law was clarified, should be treated as fraud; (g) the integrity of the registration system for rent regulated hous- ing has been eroded by the use of base date rents, rather than the service and filing of reliable registration statements, to set rents under the law in effect between the enactment of the Rent Regulation Reform Act of 1997 and the HSTPA. It is therefore public policy to impose, prospectively from the date of the enactment of the HSTPA, a rent calculation formula that, insofar as possible, derives the legal regulated rents for apartments from reliable registration statements served upon tenants and made available to the public; and (h) because pre-HSTPA law with respect to the maintenance by landlords of rent records was complex, and has an ongoing impact upon the calcu- lation of post-HSTPA rents, it is necessary to codify the pre-HSTPA law that applied to the destruction of rent records prior to the enactment of the HSTPA, and to define clearly the impact of such law upon the prospective calculation of rents under the HSTPA. § 2. (a) The legal rent for all rent stabilized apartments for the period from July 1, 2019 and thereafter shall be determined in accord- ance with Part F of the HSTPA. Where the legal regulated rent for a rent S. 2980--A 13 stabilized apartment for the period prior to June 14, 2019 has been determined by any court or administrative agency, that determination shall not foreclose a recalculation of the post-HSTPA rent, except that any pre-HSTPA rent that, as of June 14, 2019, is lower than the rent that would be permitted to be charged under the HSTPA, shall be deemed to be the lawful rent under the HSTPA on June 15, 2019, and shall be used as the basis for calculating subsequent rents under the HSTPA; (b) Subdivision (a) of this section shall apply to all cases, includ- ing those pending as of June 14, 2019 before any court, appellate tribu- nal, or administrative agency in which a claim for rent overcharges or rent arrears has been asserted with respect to rent stabilized housing, the legal regulated rent for the period from June 14, 2019 and thereaft- er shall be determined in accordance with Part F of the HSTPA. The legal regulated rent for the portion of any overcharge claim involving rents paid prior to June 14, 2019 shall be determined under pre-HSTPA law, including the default formula in cases of fraud, as codified herein. (c) Nothing in this act, or the HSTPA, or prior law, shall be construed as restricting, impeding or diminishing the use of records of any age or type, going back to any date that may be relevant, for purposes of determining the status of any apartment under the rent stabilization law; (d) The legal regulated rent payable for the period prior to June 14, 2019 shall be calculated in accordance with the law in effect prior to the HSTPA, including the prior four-year limitation on the consideration of rent records, and including the fraud exception to such limitation and such other exceptions as existed under prior law and under the regu- lations of the New York state division of housing and community renewal. Nothing in this act shall be construed as limiting such exceptions or as limiting the application of any equitable doctrine that extends statutes of limitations generally. With respect to the calculation of legal rents for the period prior to June 14, 2019, an owner shall be deemed to have committed fraud if the owner shall have committed a material breach of any duty, arising under statutory, administrative or common law, to disclose truthfully to any tenant, government agency or judicial or administrative tribunal, the rent, regulatory status, or lease informa- tion, for purposes of claiming an unlawful rent or claiming to have deregulated an apartment. The following conduct shall be presumed to have been the product of such fraud: (1) the unlawful deregulation of any apartment, including such deregulation as results from claiming an unlawful increase such as would have brought the rent over the deregu- lation threshold that existed under prior law, unless the landlord can prove good faith reliance on a directive or ruling by an administrative agency or court; or (2) beginning October 1, 2011, failing to register, as rent stabilized, any apartment in a building receiving J-51 or 421-a benefits; (e) In accordance with the practice of the New York state division of housing and community renewal prior to June 14, 2019, where fraud is not established, base rents of apartments unlawfully deregulated shall be calculated as the average of rents for comparable rent stabilized apart- ments in the building, rather than the default formula applicable to cases involving fraud; (f) For the period prior to June 14, 2019, neither the version of subdivision g of section 26-516 of the administrative code of the city of New York then in effect, nor the version of section 2523.7 of the rent stabilization code (9 NYCRR 2523.7) then in effect shall be construed as permitting the destruction of rent records for units that S. 2980--A 14 have not been properly and timely registered. Where records have been permitted to be destroyed by virtue of proper registration, and no other law required the maintenance of such records, and where the owner has proven that such records were actually destroyed in accordance with prior law and that such destruction took place prior to June 15, 2019, the registration served and filed prior to such lawful destruction of records shall be presumed to be reliable, for purposes of any post-HSTPA calculation of the rent, but that presumption shall be rebuttable. The parties shall be entitled to discovery of any evidence found to be reasonably necessary to demonstrate the legal rent. Nothing in this subdivision shall be interpreted as authorizing the destruction of any record, that under prior law was relevant to establishing (1) the status of an apartment as regulated or unregulated; (2) the presence or absence of fraud with respect to renting any housing accommodation; (3) the presence or absence of willfulness in the collection of overcharges; (4) the useful life of any item, the replacement of which is claimed by the owner to qualify an apartment for a rent increase; (5) the duration of any tenancy, such as would establish whether an owner was entitled under prior law to a longevity increase; or (6) compliance with any law that, independently of the rent stabilization law, required or requires the maintenance of such records. Where the calculation of the rent is dependent upon records that the owner has improperly destroyed, includ- ing where the records were destroyed without the apartment having been registered, the rent shall be calculated in accordance with the default formula. § 3. This act shall take effect immediately. § 2. Severability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review, the judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, para- graph, section or part of this act directly involved in the controversy in which the judgment shall have been rendered. § 3. This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as specifically set forth in the last section of such Parts.
co-Sponsors
(D) 30th Senate District
(D, WF) 47th Senate District
(D, WF) 31st Senate District
(D, WF) 28th Senate District
(D) 20th Senate District
(D, WF) 33rd Senate District
2023-S2980B - Details
2023-S2980B - Sponsor Memo
BILL NUMBER: S2980B SPONSOR: KAVANAGH 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 establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emergency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial rehabilitation; and to repeal paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, in relation to public hearings by the city rent agency (Part A); to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy- four, and the emergency housing rent control law, in relation to major capital improvements (Part B); to amend the multiple dwelling law, in relation to rent impairing violations; and to amend the real property actions and proceedings law, in relation to eviction proceedings (Part C); to apply the Housing Stability and Tenant Protection Act of 2019 to rent calculations and rent records maintenance and destruction (Part D); and to amend the administrative code of the city of New York, the emer- gency tenant protection act of nineteen seventy-four and the public
housing law, in relation to the failure of owners to file rent registra- tion statements and the enforcement powers of the commissioner of hous- ing and community renewal (Part E) PURPOSE: The legislature passed the Housing Stability and Tenant Protection Act of 2019 to transform and strengthen many of our state's laws that protect tenants and provide housing stability. This bill seeks to address certain gaps in these laws that persist after that landmark legislation and to make some technical corrections. SUMMARY OF PROVISIONS: Section 1 of the bill sets forth the structure of the bill, with five components Parts A, B, C, D, and E. PART A Section 1 of Part A of the bill repeals paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, which requires public hearings prior to establishing maximum base rents for rent controlled apartments; pursuant to the HSTPA, MBRs are set in a different manner. Section 2 of Part A of the bill amends subdivision c of section 26-511 of the administrative code of the city of New York by adding a new para- graph 15. Part (a) of the new paragraph 15 provides that where a landlord combines two or more vacant rent stabilized apartments, the legal regulated rent for the combined apartment shall be the sum of the rents of the formerly separate apartments. If a non-regulated apartment is combined with a regulated apartment, the resulting apartment shall be subject to rent regulation. Part (b) of the new paragraph 15 provides that where a landlord substan- tially increases the outer dimensions of a unit, the initial legal regu- lated rent for that unit shall be its prior rent plus a percentage of rent that is equal to the percentage by which the unit has increased. Other authorized increases may also apply. Part (c) of the new paragraph 15 provides for the denial of rent increases if vacancy had previously occurred due to harassment, fraud, or other acts of evasion. Part (d) of the new paragraph 15 provides that where the units are combined pursuant to a federal, state, or local regulatory agreement, the rent of the combined units shall be the amount of an initial rent set by the regulatory agency. Part (e) of the new paragraph 15 provides that where a landlord substan- tially reduces the dimensions of a unit, the initial legal regulated rent for the reduced apartment shall be the prior rent reduced in proportion to the reduction in floor area. Other authorized increases may also apply. Part (f) of the new paragraph 15 specifies guidelines as to the manner in which provisions governing individual apartment improvements may apply to the combination of units. Part (g) of the new paragraph 15 requires owners to maintain records and rent histories of all combined apartments before and after combination. Section 2 of Part A amends subdivision (a) of section 10-b of the emer- gency tenant protection act of 1974 by adding a new paragraph 13 in the same manner as Section 2 of the bill amends the New York city adminis- trative code, as described above. Section 3 of Part A of the bill amends the opening paragraph of para- graph (a) of subdivision 4 of section 14 of the public housing law to define the term "permanently vacated" for the purpose of determining succession rights of a member of a tenant's family. Section 4 of Part A of the bill amends paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of 1974 to clarify and limit the circumstances in which a landlord may claim exemption from rent stabili- zation on the basis of substantial rehabilitation, and to require approval for such claim by the division of housing and community renewal. Section 5 of Part A of the bill sets forth the effective date for Part A, providing that it shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amend- ments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York 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. PART B Sections 1 through 4 of Part B of the bill all amend parallel provisions of the state's various laws regulating rent to provide that no applica- tion for a major capital improvement rent increase shall be approved unless the landlord files all copies of valid permits pertaining to the major capital improvement work with such application. Section 1 of Part B amends subparagraph (g) of paragraph 1 of subdivi- sion g of section 26-405 of the administrative code of the city of New York for that purpose. Section 2 of Part B of the bill amends paragraph 6 of subdivision c of section 26-511 of the administrative code of the city of New York for the same purpose. Section 3 of Part B of the bill 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, for the same purpose. Section 4 of Part B of the bill 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, for the same purpose. Section 5 of Part B of the bill sets forth the effective date for Part B, providing that it shall take effect immediately; provided that the amendments to section 26-405 of the city rent and rehabilitation law made by section one of this act shall remain in full force and effect only as long as the public emergency requiring the regulation and control of residential rents and evictions continues, as provided in subdivision 3 of section 1 of the local emergency housing rent control act; provided, further, that the amendments 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. PART C Section 1 of Part C of the bill amends subdivision 3 of section 302-a of the multiple dwelling law to strengthen the laws regarding rent impair- ing violations in various ways, including reducing the time in which landlords must correct such violations before their right to collect rent is impaired. Section 2 of Part C of the bill amends subdivisions 10 and 11 of section 713 of the real property actions and proceedings law to ensure that tenants who are illegally evicted have recourse in court to be restored to their residences. Section 3 of Part C of the bill amends subdivisions 2 and 3 of section 732 of the real property actions and proceedings law, to ensure that tenants have an adequate opportunity to respond in non-payment proceedings before a warrant of eviction is issued and executed. If a tenant does not initially answer the petition served to him and her, rather than an automatic judgment in favor of the landlord, this bill would require the setting and notification of a court date to be mailed to both parties or their attorneys. Only upon the tenant's failure to appear in court may a judge rule in favor of the landlord and grant an eviction warrant. Section 4 of Part C of the bill sets forth the effective date for Part C, providing that it shall take effect immediately and shall apply to all pending proceedings on and after such date. PART D Section 1 of Part D of the bill sets forth the legislative findings. Section 2 of Part D of the bill sets forth various provisions regarding the manner in which legal rents shall be determined, the use, retention, and destruction of certain records, the circumstances in which a land- lord shall be deemed to have committed fraud when unlawfully deregulat- ing or failing to register an apartment, and other matters. Section 3 of Part D of the bill sets forth the effective date for Part D, providing that it shall take effect immediately. PART E Sections 1 and 2 of Part E of the bill amends the administrative code of the City of New York and the emergency tenant protection act of nineteen seventy-four, respectively, to establish a penalty for building owners' failure to file a timely rent registration statement with the NYS Divi- sion of Housing and Community Renewal for rent-regulated apartments. An owner shall be fined $500 per unregistered unit for each month a regis- tration is delinquent, and such fine shall be subject to enforcement in court. Section 1 of Part E of the bill amends subdivision e of section 26-517 of the administrative code of the City of New York for that purpose. Section 2 of Part E of the bill amends subdivision e of section 12-a of section 4 of chapter 576 cf the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, for the same purpose. Section 3 of Part E of the bill amends subdivision 1 of section 14 of the public housing law by adding a new paragraph x to specify as powers and duties of the commissioner of the Division of Housing and Community Renewal their enforcement authority over all the laws, rules, and regu- lations related to housing that is financed, administered, overseen, or otherwise regulated by the agency. Section 4 of Part E of the bill sets forth the effective date for Part E, providing that it shall take effect immediately, provided that the amendments to section 26-517 of chapter 4 of title 26 of the administra- tive 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. Section 2 of the bill sets forth a severability clause. Section 3 of the bill sets forth the effective date. JUSTIFICATION: The Housing Stability and Tenant Protection Act of 2019 (HSTPA) trans- formed and strengthened many of the state's laws that protect tenants and provide housing stability. This bill seeks to address certain gaps in these laws that persist after that landmark legislation in the vari- ous ways detailed in the summary of provisions above and to make some technical corrections. Part A Section 1 Under HSTPA, maximum base rent increases for rent-controlled apartments are calculated based on the lower of the average of the past five years' NYC Rent Guidelines Board one-year rent increase determinations or 7.5%. Repealing the requirement for a public hearing would align the process with current law and prevent confusion; with the changes enacted in HSTPA, the hearings no longer serve any purpose. Section 2 On August 31, 2022, NYS Homes and Community Renewal (HCR) released proposed updates to the regulations authorized under the rent stabiliza- tion laws, including language that would address the combination of rent-regulated units (a practice sometimes popularly known as "franken- steining"), which has enabled owners to set a new first rent for the combined unit, often at a much higher level than the rents of the once separate apartments. Adopting NCR's proposed regulations in statute would address this issue and ensure combined units remain at a level of affordability that matches the increases or reductions in unit size. Section 3 This part also defines what constitutes "permanently vacated," with the goal of providing clarity on instances where a tenant's move-out may not correspond with the end of a lease or the termination of rent payments. This is needed to address the fact that courts have differed in their interpretation of current law, with the first and second appellate divi- sions holding different views. The provisions of this bill would conform the rule to the second department's position, to ensure that family members eligible for succession do not lose their rights because of a delay in reporting vacatur to the landlord. Section 4 By requiring owners to seek and secure approval from HCR prior to claim- ing rent stabilization exemption on the basis of substantial rehabili- tation, the added level of agency oversight would prevent the destabili- zation of units where owners fail to substantiate their claims of having substantial work performed that merits exemption from rent stabiliza- tion. Part B By requiring landlords to furnish proof to HCR that all necessary permits associated with performing major capital improvement (MCI) work have been filed, the provisions of this Part would prevent claims for MCI rent increases that cannot be corroborated through permit records -- a form of documentation that serves as proof of work. Part C Section 1 A rent impairing violation Is defined as "a condition in a multiple dwelling which, in the opinion of (HCR), constitutes, or if not promptly corrected, will constitute, a fire hazard or a serious threat to the life, health or safety of occupants thereof." This is a serious class of violations that needs prompt actions to cure. Reducing the time required for building owners to correct rent impairing violations is therefore in the interest of tenants' health and safety. Section 2 Tenants who have been illegally evicted currently do not have recourse in court to have their tenancy restored. This amendment would grant such tenants the right to commence a court proceeding to seek the restoration of possession of their units, an important step toward combating illegal eviction and returning tenants to their homes. Section 3 For tenants who have been served a notice for nonpayment of rent, the proper process for reaching a resolution is through housing court. This amendment would ensure tenants have adequate opportunity to respond before a judge issues an eviction warrant. Part D Part F of the HSTPA allowed HCR or a court to review six years of rent history when determining rent overcharges. Since then, the Court of Appeals limited the retroactive application of these provisions when it comes to overcharges and the requirement that property owners reimburse tenants for illegally charged rents. This amendment will help clarify the purpose of Part F of HSTPA in order to effectuate the legislature's original intent in enacting the provision. These amendments will address the Court of Appeals' concerns regarding constitutional limitations and will make litigation less necessary with regard to certain issues that have not been settled by the courts. In particular, this bill will clarify the prospective reach of certain provisions of Part F, in light of recent court decisions including Regina Metro v. DHCR. It will also codify the standard for applying a fraud exception to the four-year rule that was in place before HSTPA was enacted, in light of Burrows v. 75-25 153rd Street LLC. PART E Sections 1 and 2 Owners of rent-regulated housing are required to submit annual registra- tion statements for each regulated unit under their ownership by no later than July 31 of each year. However, the current penalty for fail- ure to submit a timely registration is half of the rent registration filing fee of $20, or a mere $10 per apartment - hardly a deterrent for noncompliance. Increasing the late- registration fee to $500 per unit per month of delinquency would prescribe a level of penalty that owners would be more likely to avoid and would result in more on-time rent registrations filings. Section 3 HCR is the agency designated in numerous laws and regulations to promul- gate rules, administer, supervise, and enforce housing-related policies, programs, and financing activities. This section grants the HCR commis- sioner the necessary enforcement powers to carry out the duties required of the agency. LEGISLATIVE HISTORY: 2021-2022: S7213A (Kavanagh) - referred to Housing FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Minimal. EFFECTIVE DATE: This act shall take effect immediately provided, however, that the applicable effective date of Parts A through E of this act shall be as specifically set forth in the last section of such Parts.
2023-S2980B - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 2980--B 2023-2024 Regular Sessions I N S E N A T E January 26, 2023 ___________ Introduced by Sens. KAVANAGH, CLEARE, HOYLMAN-SIGAL, JACKSON, KRUEGER, RIVERA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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 establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emergency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial reha- bilitation; and to repeal paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York, in relation to public hearings by the city rent agency (Part A); to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four, and the emergency housing rent control law, in relation to major capital improvements (Part B); to amend the multiple dwelling law, in relation to rent impairing violations; and to amend the real property actions and proceedings law, in relation to eviction proceedings (Part C); to apply the Housing Stability and Tenant Protection Act of 2019 to rent calculations and rent records maintenance and destruction (Part D); and to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four and the public housing law, in relation to the failure of owners to file rent registration statements and the enforcement powers of the commissioner of housing and community renewal (Part E) THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07250-09-3
S. 2980--B 2 Section 1. This act enacts into law components of legislation relating to rent regulation and tenant protection. Each component is wholly contained within a Part identified as Parts A through E. The effective date for each particular provision contained within such Part is set forth in the last section of such Part. Any provision in any section contained within a Part, including the effective date of the Part, which makes reference to a section "of this act", when used in connection with that particular component, shall be deemed to mean and refer to the corresponding section of the Part in which it is found. Section three of this act sets forth the general effective date of this act. PART A Section 1. Paragraph 9 of subdivision a of section 26-405 of the administrative code of the city of New York is REPEALED. § 2. Subdivision c of section 26-511 of the administrative code of the city of New York is amended by adding a new paragraph 15 to read as follows: (15) (A) WHERE AN OWNER COMBINES TWO OR MORE VACANT HOUSING ACCOMMO- DATIONS OR COMBINES A VACANT HOUSING ACCOMMODATION WITH AN OCCUPIED ACCOMMODATION, SUCH INITIAL RENT FOR SUCH NEW HOUSING ACCOMMODATION SHALL BE THE COMBINED LEGAL RENT FOR BOTH PREVIOUS HOUSING ACCOMMO- DATIONS, SUBJECT TO ANY APPLICABLE GUIDELINE INCREASES AND ANY OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY INDIVIDUAL APARTMENT IMPROVEMENT INCREASES APPLICABLE FOR BOTH HOUSING ACCOMMODATIONS. IF AN OWNER COMBINES A RENT REGULATED ACCOMMODATION WITH AN APARTMENT NOT SUBJECT TO RENT REGULATION, THE RESULTING APARTMENT SHALL BE SUBJECT TO THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR. IF AN OWNER INCREASES THE AREA OF AN APARTMENT NOT SUBJECT TO RENT REGULATION BY ADDING SPACE THAT WAS PREVIOUSLY PART OF A RENT REGULATED APARTMENT, EACH APARTMENT SHALL BE SUBJECT TO THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR. (B) WHERE AN OWNER SUBSTANTIALLY INCREASES THE OUTER DIMENSION OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, INCREASED BY A PERCENTAGE THAT IS EQUAL TO THE PERCENTAGE INCREASE IN THE DWELLING SPACE AND SUCH OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE UNIT PRIOR TO THE ALTERATION OF THE OUTER DIMENSIONS. (C) NOTWITHSTANDING SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH, SUCH INCREASES MAY BE DENIED BASED ON THE OCCURRENCE OF SUCH VACANCY DUE TO HARASSMENT, FRAUD, OR OTHER ACTS OF EVASION WHICH MAY REQUIRE THAT SUCH RENT BE SET IN ACCORDANCE WITH THIS SUBDIVISION. (D) WHERE THE VACANT HOUSING ACCOMMODATIONS ARE COMBINED, MODIFIED, DIVIDED OR THE DIMENSION OF SUCH HOUSING ACCOMMODATION OTHERWISE ALTERED AND THESE CHANGES ARE BEING MADE PURSUANT TO A PRESERVATION REGULATORY AGREEMENT WITH A FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR INSTRU- MENTALITY, THE RENT STABILIZED RENTS CHARGED THEREAFTER SHALL BE BASED ON AN INITIAL RENT SET BY SUCH AGENCY OR INSTRUMENTALITY. (E) WHERE AN OWNER SUBSTANTIALLY DECREASES THE OUTER DIMENSIONS OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, DECREASED BY THE SAME PERCENTAGE THE SQUARE FOOTAGE OF THE ORIGINAL APARTMENT WAS DECREASED BY AND SUCH OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE S. 2980--B 3 AUTHORIZED FOR THE APARTMENT PRIOR TO THE ALTERATION OF THE OUTER DIMEN- SIONS. (F)(I) WHEN AN OWNER COMBINES TWO OR MORE RENT REGULATED APARTMENTS, THE OWNER MAY USE EACH OF THE PREVIOUS APARTMENTS' REMAINING INDIVIDUAL APARTMENT IMPROVEMENT ALLOWANCES FOR THE PURPOSES OF A TEMPORARY INDI- VIDUAL APARTMENT IMPROVEMENT RENT INCREASE. THE OWNER SHALL SUBSEQUENTLY DESIGNATE A SURVIVING APARTMENT FOR THE PURPOSES OF REGISTRATION THAT HAS THE SAME APARTMENT NUMBER AS ONE OF THE PRIOR APARTMENTS. IF THAT PRIOR APARTMENT HAS ANY REIMBURSABLE INDIVIDUAL APARTMENT IMPROVEMENT MONEY REMAINING AFTER THE COMBINATION, THAT MONEY MAY BE REIMBURSED FOR FUTURE INDIVIDUAL APARTMENT IMPROVEMENTS UNDERTAKEN WITHIN THE SUBSE- QUENT FIFTEEN YEARS FOLLOWING THE COMBINATION. (II) IN ORDER FOR AN OWNER TO QUALIFY FOR A TEMPORARY INDIVIDUAL APARTMENT IMPROVEMENT RENT INCREASE WHEN APARTMENTS ARE COMBINED, THE REQUIREMENTS FOR AN INDIVIDUAL APARTMENT IMPROVEMENT, INCLUDING ALL NOTIFICATION REQUIREMENTS UNDER THIS CHAPTER SHALL BE MET. (G) OWNERS SHALL MAINTAIN THE RECORDS AND RENT HISTORIES OF ALL COMBINED APARTMENTS, BOTH PRIOR TO AND POST COMBINATION, FOR THE PURPOSES OF RENT SETTING, OVERCHARGE AND ALL OTHER PROCEEDINGS TO WHICH THE RECORDS ARE APPLICABLE. § 2-a. Subdivision (a) of section 10-b of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, is amended by adding a new paragraph 13 to read as follows: 13. (I) WHERE AN OWNER COMBINES TWO OR MORE VACANT HOUSING ACCOMMO- DATIONS OR COMBINES A VACANT HOUSING ACCOMMODATION WITH AN OCCUPIED ACCOMMODATION, SUCH INITIAL RENT FOR SUCH NEW HOUSING ACCOMMODATION SHALL BE THE COMBINED LEGAL RENT FOR BOTH PREVIOUS HOUSING ACCOMMO- DATIONS, SUBJECT TO ANY APPLICABLE GUIDELINE INCREASES AND ANY OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY INDIVIDUAL APARTMENT IMPROVEMENT INCREASES APPLICABLE FOR BOTH HOUSING ACCOMMODATIONS. IF AN OWNER COMBINES A RENT REGULATED ACCOMMODATION WITH AN APARTMENT NOT SUBJECT TO RENT REGULATION, THE RESULTING APARTMENT SHALL BE SUBJECT TO THIS ACT. IF AN OWNER INCREASES THE AREA OF AN APARTMENT NOT SUBJECT TO RENT REGULATION BY ADDING SPACE THAT WAS PREVIOUSLY PART OF A RENT REGU- LATED APARTMENT, EACH APARTMENT SHALL BE SUBJECT TO THIS ACT. (II) WHERE AN OWNER SUBSTANTIALLY INCREASES THE OUTER DIMENSION OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, INCREASED BY A PERCENTAGE THAT IS EQUAL TO THE PERCENTAGE INCREASE IN THE DWELLING SPACE AND SUCH OTHER INCREASES AUTHORIZED BY THIS ACT INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE UNIT PRIOR TO THE ALTERATION OF THE OUTER DIMENSIONS. (III) NOTWITHSTANDING SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH, SUCH INCREASES MAY BE DENIED BASED ON THE OCCURRENCE OF SUCH VACANCY DUE TO HARASSMENT, FRAUD, OR OTHER ACTS OF EVASION WHICH MAY REQUIRE THAT SUCH RENT BE SET IN ACCORDANCE WITH SECTION TWELVE OF THIS ACT. (IV) WHERE THE VACANT HOUSING ACCOMMODATIONS ARE COMBINED, MODIFIED, DIVIDED OR THE DIMENSION OF SUCH HOUSING ACCOMMODATION OTHERWISE ALTERED AND THESE CHANGES ARE BEING MADE PURSUANT TO A PRESERVATION REGULATORY AGREEMENT WITH A FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR INSTRU- MENTALITY, THE RENT STABILIZED RENTS CHARGED THEREAFTER SHALL BE BASED ON AN INITIAL RENT SET BY SUCH AGENCY OR INSTRUMENTALITY. (V) WHERE AN OWNER SUBSTANTIALLY DECREASES THE OUTER DIMENSIONS OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, DECREASED BY THE SAME PERCENTAGE THE S. 2980--B 4 SQUARE FOOTAGE OF THE ORIGINAL APARTMENT WAS DECREASED BY AND SUCH OTHER INCREASES AUTHORIZED BY THIS ACT INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE APARTMENT PRIOR TO THE ALTERATION OF THE OUTER DIMEN- SIONS. (VI)(1) WHEN AN OWNER COMBINES TWO OR MORE RENT REGULATED APARTMENTS, THE OWNER MAY USE EACH OF THE PREVIOUS APARTMENTS' REMAINING INDIVIDUAL APARTMENT IMPROVEMENT ALLOWANCES FOR THE PURPOSES OF A TEMPORARY INDI- VIDUAL APARTMENT IMPROVEMENT RENT INCREASE. THE OWNER SHALL SUBSEQUENTLY DESIGNATE A SURVIVING APARTMENT FOR THE PURPOSES OF REGISTRATION THAT HAS THE SAME APARTMENT NUMBER AS ONE OF THE PRIOR APARTMENTS. IF THAT PRIOR APARTMENT HAS ANY REIMBURSABLE INDIVIDUAL APARTMENT IMPROVEMENT MONEY REMAINING AFTER THE COMBINATION, THAT MONEY MAY BE REIMBURSED FOR FUTURE INDIVIDUAL APARTMENT IMPROVEMENTS UNDERTAKEN WITHIN THE SUBSE- QUENT FIFTEEN YEARS FOLLOWING THE COMBINATION. (2) IN ORDER FOR AN OWNER TO QUALIFY FOR A TEMPORARY INDIVIDUAL APART- MENT IMPROVEMENT RENT INCREASE WHEN APARTMENTS ARE COMBINED, THE REQUIREMENTS FOR AN INDIVIDUAL APARTMENT IMPROVEMENT, INCLUDING ALL NOTIFICATION REQUIREMENTS UNDER THIS ACT SHALL BE MET. (VII) OWNERS SHALL MAINTAIN THE RECORDS AND RENT HISTORIES OF ALL COMBINED APARTMENTS, BOTH PRIOR TO AND POST COMBINATION, FOR THE PURPOSES OF RENT SETTING, OVERCHARGE AND ALL OTHER PROCEEDINGS TO WHICH THE RECORDS ARE APPLICABLE. § 3. The opening paragraph of paragraph (a) of subdivision 4 of section 14 of the public housing law, as added by chapter 116 of the laws of 1997, is amended to read as follows: that unless otherwise prohibited by occupancy restrictions based upon income limitations pursuant to federal, state or local law, regulations or other requirements of governmental agencies, any member of the tenant's family, as defined in paragraph (c) of this subdivision, shall succeed to the rights of a tenant under such acts and laws where the tenant has permanently vacated the housing accommodation and such family member has resided with the tenant in the housing accommodation as a primary residence for a period of no less than two years, or where such person is a "senior citizen" or a "disabled person," as defined in para- graph (c) of this subdivision, for a period of no less than one year, immediately prior to the permanent vacating of the housing accommodation by the tenant, or from the inception of the tenancy or commencement of the relationship, if for less than such periods. FOR THE PURPOSES OF THIS PARAGRAPH, "PERMANENTLY VACATED" SHALL MEAN THE DATE WHEN THE TENANT OF RECORD PHYSICALLY MOVES OUT OF THE HOUSING ACCOMMODATION AND PERMANENTLY CEASES TO USE IT AS THEIR PRIMARY RESIDENCE, REGARDLESS OF SUBSEQUENT CONTACTS WITH THE UNIT OR THE SIGNING OF LEASE RENEWALS OR CONTINUATION OF RENT PAYMENTS. The minimum periods of required residency set forth in this subdivision shall not be deemed to be interrupted by any period during which the "family member" temporarily relocates because he or she: § 4. Paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, is amended to read as follows: (5) housing accommodations in buildings completed or buildings substantially rehabilitated as family units on or after January first, nineteen hundred seventy-four; PROVIDED THAT AN OWNER CLAIMING EXEMPTION FROM RENT STABILIZATION ON THE BASIS OF SUBSTANTIAL REHABILITATION SHALL SEEK APPROVAL FROM STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL WITH- IN ONE YEAR OF THE COMPLETION OF THE SUBSTANTIAL REHABILITATION, OR FOR S. 2980--B 5 ANY BUILDING PREVIOUSLY ALLEGED TO HAVE BEEN SUBSTANTIALLY REHABILITATED BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND TWENTY-THREE THAT AMENDED THIS PARAGRAPH, WITHIN SIX MONTHS OF SUCH EFFECTIVE DATE, AND ULTIMATELY OBTAIN SUCH APPROVAL, WHICH SHALL BE DENIED ON THE FOLLOWING GROUNDS: (A) THE OWNER OR ITS PREDECESSORS IN INTEREST HAVE ENGAGED IN HARASS- MENT OF TENANTS IN THE FIVE YEARS PRECEDING THE COMPLETION OF THE SUBSTANTIAL REHABILITATION; (B) THE BUILDING WAS NOT IN A SERIOUSLY DETERIORATED CONDITION REQUIR- ING SUBSTANTIAL REHABILITATION; (C) THE OWNER'S OR ITS PREDECESSORS IN INTEREST'S ACTS OR OMISSIONS IN FAILING TO MAINTAIN THE BUILDING MATERIALLY CONTRIBUTED TO THE SERIOUSLY DETERIORATED CONDITION OF THE PREMISES; OR (D) THE SUBSTANTIAL REHABILITATION WORK WAS PERFORMED IN A PIECEMEAL FASHION AND WAS NOT COMPLETED IN A REASONABLE AMOUNT OF TIME, DURING WHICH PERIOD THE BUILDING WAS AT LEAST EIGHTY PERCENT VACANT; § 5. This act shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amendments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York 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. PART B 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 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- S. 2980--B 6 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 PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE MAJOR CAPITAL IMPROVE- MENT WORK WITH SUCH APPLICATION. ANY APPLICATION SUBMITTED WITH FRAUDU- LENT 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 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 S. 2980--B 7 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: (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 S. 2980--B 8 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 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 S. 2980--B 9 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 26-405 of the city rent and rehabilitation law made by section one of this act shall remain in full force and effect only as long as the public emergency requiring the regulation and control of residential rents and evictions continues, as provided in subdivision 3 of section 1 of the local emergency housing rent control act; provided, further, that the amendments 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. PART C Section 1. Subdivision 3 of section 302-a of the multiple dwelling law, as added by chapter 911 of the laws of 1965, is amended to read as follows: 3. a. If (i) the official records of the department shall note that a rent impairing violation exists OR EXISTED in respect to a multiple dwelling and that notice of such violation has been given by the depart- ment, by mail, to the owner last registered with the department and (ii) such note of the violation [is] WAS not cancelled or removed of record within [six] THREE months after the date of such notice of such violation, then for the period that such violation remains uncorrected after the expiration of said [six] THREE months, no rent shall be recov- ered by any owner for any premises in such multiple dwelling used by a resident thereof for human habitation in which the condition constitut- ing such rent impairing violation exists, provided, however, that if the violation is one that requires approval of plans by the department for the corrective work and if plans for such corrective work shall have been duly filed within [three months] ONE MONTH from the date of notice of such violation by the department to the owner last registered with the department, the [six-months] THREE MONTH period aforementioned shall not begin to run until the date that plans for the corrective work are S. 2980--B 10 approved by the department; if plans are not filed within said [three- months] ONE MONTH period or if so filed, they are disapproved and amend- ments are not duly filed within thirty days after the date of notifica- tion of the disapproval by the department to the person having filed the plans, the [six-months] THREE MONTH period shall be computed as if no plans whatever had been filed under this proviso. If a condition consti- tuting a rent impairing violation exists in the part of a multiple dwelling used in common by the residents or in the part under the control of the owner thereof, the violation shall be deemed to exist in the respective premises of each resident of the multiple dwelling. b. The provisions of subparagraph a shall not apply if (i) the condi- tion referred to in the department's notice to the owner last registered with the department did not in fact exist, notwithstanding the notation thereof in the records of the department; (ii) the condition which is the subject of the violation has in fact been corrected WITHIN THE THREE MONTH PERIOD REQUIRED BY SUBPARAGRAPH A OF THIS SUBDIVISION, though the note thereof in the department has not been removed or cancelled; (iii) the violation has been caused by the resident from whom rent is sought to be collected or by members of his family or by his guests or by another resident of the multiple dwelling or the members of the family of such other resident or by his guests, or (iv) the resident proceeded against for rent has refused entry to the owner for the purpose of correcting the condition giving rise to the violation. c. To raise a defense under subparagraph a in any action to recover rent or in any special proceeding for the recovery of possession because of non-payment of rent, the resident must affirmatively plead and prove the material facts under subparagraph a[, and must also deposit with the clerk of the court in which the action or proceeding is pending at the time of filing of the resident's answer the amount of rent sought to be recovered in the action or upon which the proceeding to recover possession is based, to be held by the clerk of the court until final disposition of the action or proceeding at which time the rent deposited shall be paid to the owner, if the owner prevails, or be returned to the resident if the resident prevails. Such deposit of rent shall vitiate any right on the part of the owner to terminate the lease or rental agreement of the resident because of nonpayment of rent]. d. If a resident voluntarily pays rent or an installment of rent when he OR SHE would be privileged to withhold the same under subparagraph a, he OR SHE shall [not thereafter] have [any] A claim or cause of action to recover back the rent or installment of rent so paid. A voluntary payment within the meaning hereof shall mean payment other than one made pursuant to a judgment in an action or special proceeding. e. [If upon the trial of any action to recover rent or any special proceeding for the recovery of possession because of non-payment of rent it shall appear that the resident has raised a defense under this section in bad faith, or has caused the violation or has refused entry to the owner for the purpose of correcting the condition giving rise to the violation, the court, in its discretion, may impose upon the resi- dent the reasonable costs of the owner, including counsel fees, in main- taining the action or proceeding not to exceed one hundred dollars.] THE DEPARTMENT SHALL NOTIFY THE RESIDENT AND OWNER WHEN A RENT IMPAIRING VIOLATION HAS BEEN PLACED IN THEIR APARTMENT. THE NOTIFICATION SHALL INCLUDE A LIST OF THE RENT IMPAIRING VIOLATIONS PLACED AND AN EXPLANA- TION OF THE RESIDENT'S RIGHT TO RAISE THE RENT IMPAIRING VIOLATIONS AS A DEFENSE IN ANY ACTION TO RECOVER RENT OR IN ANY SPECIAL PROCEEDING FOR THE RECOVERY OF POSSESSION BECAUSE OF NON-PAYMENT OF RENT. S. 2980--B 11 § 2. Subdivisions 10 and 11 of section 713 of the real property actions and proceedings law, subdivision 10 as amended by chapter 467 of the laws of 1981 and subdivision 11 as added by chapter 312 of the laws of 1962, are amended to read as follows: 10. The person in possession has entered the property or remains in possession by force or unlawful means and he or SHE OR his OR HER prede- cessor in interest was not in quiet possession for three years before the time of the forcible or unlawful entry or detainer and the petition- er was peaceably in actual possession at the time of the forcible or unlawful entry or in constructive possession at the time of the forcible or unlawful detainer. ANY LAWFUL OCCUPANT, PHYSICALLY OR CONSTRUCTIVELY IN POSSESSION, WHO HAS BEEN EVICTED OR DISPOSSESSED WITHOUT THE COURT PROCESS MANDATED BY SECTION SEVEN HUNDRED ELEVEN OF THIS ARTICLE, MAY COMMENCE A PROCEEDING UNDER THIS SUBDIVISION TO BE RESTORED TO POSSESSION, AND SHALL BE SO RESTORED UPON PROOF THAT THEIR EVICTION WAS UNLAWFUL; no notice to quit shall be required in order to maintain a proceeding under this subdivision. 11. The person in possession entered into possession as an incident to employment by petitioner, and the time agreed upon for such possession has expired or, if no such time was agreed upon, the employment has been terminated[; no notice to quit shall be required in order to maintain the proceeding under this subdivision]. § 3. Subdivisions 2 and 3 of section 732 of the real property actions and proceedings law, as amended by section 14 of part M of chapter 36 of the laws of 2019, are amended to read as follows: 2. If the respondent answers, the clerk shall fix a date for trial or hearing not less than three nor more than eight days after joinder of issue, and shall immediately notify by mail the parties or their attor- neys of such date. If the determination be for the petitioner, the issu- ance of a warrant shall not be stayed for more than five days from such determination, except as provided in section seven hundred fifty-three of this article. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THIRTY-TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A JUDG- MENT IN FAVOR OF THE PETITIONER AND THE ISSUANCE OF THE WARRANT SHALL BE STAYED FOR A PERIOD NOT TO EXCEED TEN DAYS FROM THE DATE OF SERVICE, EXCEPT AS PROVIDED IN SECTION SEVEN HUNDRED FIFTY-THREE OF THIS ARTICLE. 3. If the respondent fails to answer within ten days from the date of service, as shown by the affidavit or certificate of service of the notice of petition and petition, [the judge shall render judgment in favor of the petitioner and] THE PETITIONER MAY MAKE AN APPLICATION FOR A DEFAULT JUDGMENT. UPON THIS APPLICATION, THE CLERK SHALL FIX A DATE FOR INQUEST AND IMMEDIATELY NOTIFY BY MAIL THE PARTIES OR THEIR ATTOR- NEYS OF SUCH DATE. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THIRTY-TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A JUDG- MENT IN FAVOR OF THE PETITIONER AND may stay the issuance of the warrant for a period of not to exceed ten days from the date of service, except as provided in section seven hundred fifty-three of this article. § 4. This act shall take effect immediately and shall apply to all pending proceedings on and after such date. PART D Section 1. Legislative findings. The legislature hereby finds and declares that: S. 2980--B 12 (a) the pool of rent regulated apartments in New York state contains an unacceptably high number of apartments in which the current rents are based on prior rents that exceeded the legal regulated rent at the time they were charged, but for which remedies were limited under the law in effect before the effective date of the Housing Stability and Tenant Protection Act of 2019 (HSTPA); (b) it is public policy prospectively to reduce, insofar as possible, those rents to a level in line with what they would have been in the absence of the unlawful rent setting and deregulations that were permit- ted under prior law to go unremedied, and therefore to impose the rent calculation standards of the HSTPA prospectively from the date of its enactment, including in cases where the pre-HSTPA rent has already been established by a court or administrative agency; (c) the purpose of the prospective application of the penalty and record review provisions of the HSTPA is to prevent the perpetual collection of unlawful and inflated rents, and to encourage the volun- tary registration of any rent stabilized apartment for which any prior annual registration statement has not been filed, and to encourage the voluntary recalculation of unreliable pre-HSTPA rents; (d) in light of court decisions arising under the HSTPA, including REGINA METRO V. DHCR, it is public policy that the legislature define clearly the prospective reach of that law, and limit, to the extent required by the constitution, the retroactive reach of that law; (e) despite REGINA, the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents remains unsettled and the subject of litigation, and courts have diverged from the controlling authority of THORNTON V. BARON and GRIMM V. DHCR to impose a common law fraud standard that is not found in these cases and is inconsistent with the intent of the legislature to discourage and penalize fraud against the rent regulatory system itself, as well as against individual tenants, and it is therefore public policy that the legislature codify, without expanding or reducing the liability of landlords under pre-HSTPA law, the standard for applying that exception; (f) the New York state division of housing and community renewal (DHCR) misinterpreted the rent stabilization law for a significant peri- od of time with respect to the regulatory obligations arising from the receipt of J-51 and 421-a tax benefits resulting in the unlawful deregu- lation of tens of thousands of rent-stabilized apartments, the setting of unlawful rents, and the collection of millions of dollars of rent overcharges, during a housing emergency. Both landlords and tenants relied upon the DHCR's misinterpretation of the law. In REGINA, the Court of Appeals settled many of the issues arising from overcharge claims by tenants who were misled into refraining from filing overcharge cases during the period when DHCR's erroneous interpretation of the law was in effect, but left open the issue of whether a landlord's ongoing collection of overcharges and failure to return apartments to rent-sta- bilization, after the law was clarified, should be treated as fraud; (g) the integrity of the registration system for rent regulated hous- ing has been eroded by the use of base date rents, rather than the service and filing of reliable registration statements, to set rents under the law in effect between the enactment of the Rent Regulation Reform Act of 1997 and the HSTPA. It is therefore public policy to impose, prospectively from the date of the enactment of the HSTPA, a rent calculation formula that, insofar as possible, derives the legal regulated rents for apartments from reliable registration statements served upon tenants and made available to the public; and S. 2980--B 13 (h) because pre-HSTPA law with respect to the maintenance by landlords of rent records was complex, and has an ongoing impact upon the calcu- lation of post-HSTPA rents, it is necessary to codify the pre-HSTPA law that applied to the destruction of rent records prior to the enactment of the HSTPA, and to define clearly the impact of such law upon the prospective calculation of rents under the HSTPA. § 2. (a) The legal rent for all rent stabilized apartments for the period from July 1, 2019 and thereafter shall be determined in accord- ance with Part F of the HSTPA. Where the legal regulated rent for a rent stabilized apartment for the period prior to June 14, 2019 has been determined by any court or administrative agency, that determination shall not foreclose a recalculation of the post-HSTPA rent, except that any pre-HSTPA rent that, as of June 14, 2019, is lower than the rent that would be permitted to be charged under the HSTPA, shall be deemed to be the lawful rent under the HSTPA on June 15, 2019, and shall be used as the basis for calculating subsequent rents under the HSTPA; (b) Subdivision (a) of this section shall apply to all cases, includ- ing those pending as of June 14, 2019 before any court, appellate tribu- nal, or administrative agency in which a claim for rent overcharges or rent arrears has been asserted with respect to rent stabilized housing, the legal regulated rent for the period from June 14, 2019 and thereaft- er shall be determined in accordance with Part F of the HSTPA. The legal regulated rent for the portion of any overcharge claim involving rents paid prior to June 14, 2019 shall be determined under pre-HSTPA law, including the default formula in cases of fraud, as codified herein; (c) Nothing in this act, or the HSTPA, or prior law, shall be construed as restricting, impeding or diminishing the use of records of any age or type, going back to any date that may be relevant, for purposes of determining the status of any apartment under the rent stabilization law; (d) The legal regulated rent payable for the period prior to June 14, 2019 shall be calculated in accordance with the law in effect prior to the HSTPA, including the prior four-year limitation on the consideration of rent records, and including the fraud exception to such limitation and such other exceptions as existed under prior law and under the regu- lations of the New York state division of housing and community renewal. Nothing in this act shall be construed as limiting such exceptions or as limiting the application of any equitable doctrine that extends statutes of limitations generally. With respect to the calculation of legal rents for the period either prior to or subsequent to June 14, 2019, an owner shall be deemed to have committed fraud if the owner shall have commit- ted a material breach of any duty, arising under statutory, administra- tive or common law, to disclose truthfully to any tenant, government agency or judicial or administrative tribunal, the rent, regulatory status, or lease information, for purposes of claiming an unlawful rent or claiming to have deregulated an apartment, whether or not the owner's conduct would be considered fraud under the common law, and whether or not a complaining tenant specifically relied on untruthful or misleading statements in registrations, leases, or other documents. The following conduct shall be presumed to have been the product of such fraud: (1) the unlawful deregulation of any apartment, including such deregulation as results from claiming an unlawful increase such as would have brought the rent over the deregulation threshold that existed under prior law, unless the landlord can prove good faith reliance on a directive or ruling by an administrative agency or court; or (2) beginning October 1, S. 2980--B 14 2011, failing to register, as rent stabilized, any apartment in a build- ing receiving J-51 or 421-a benefits; (e) In accordance with the practice of the New York state division of housing and community renewal prior to June 14, 2019, where fraud is not established, base rents of apartments unlawfully deregulated shall be calculated as the average of rents for comparable rent stabilized apart- ments in the building, rather than the default formula applicable to cases involving fraud; (f) For the period prior to June 14, 2019, neither the version of subdivision g of section 26-516 of the administrative code of the city of New York then in effect, nor the version of section 2523.7 of the rent stabilization code (9 NYCRR 2523.7) then in effect shall be construed as permitting the destruction of rent records for units that have not been properly and timely registered. Where records have been permitted to be destroyed by virtue of proper registration, and no other law required the maintenance of such records, and where the owner has proven that such records were actually destroyed in accordance with prior law and that such destruction took place prior to June 15, 2019, the registration served and filed prior to such lawful destruction of records shall be presumed to be reliable, for purposes of any post-HSTPA calculation of the rent, but that presumption shall be rebuttable. The parties shall be entitled to discovery of any evidence found to be reasonably necessary to demonstrate the legal rent. Nothing in this subdivision shall be interpreted as authorizing the destruction of any record, that under prior law was relevant to establishing (1) the status of an apartment as regulated or unregulated; (2) the presence or absence of fraud with respect to renting any housing accommodation; (3) the presence or absence of willfulness in the collection of overcharges; (4) the useful life of any item, the replacement of which is claimed by the owner to qualify an apartment for a rent increase; (5) the duration of any tenancy, such as would establish whether an owner was entitled under prior law to a longevity increase; or (6) compliance with any law that, independently of the rent stabilization law, required or requires the maintenance of such records. Where the calculation of the rent is dependent upon records that the owner has improperly destroyed, includ- ing where the records were destroyed without the apartment having been registered, the rent shall be calculated in accordance with the default formula. § 3. This act shall take effect immediately. PART E Section 1. Subdivision e of section 26-517 of the administrative code of the city of New York, as amended by chapter 253 of the laws of 1993, is amended to read as follows: e. The failure to file a proper and timely initial or annual rent registration statement shall, until such time as such registration is filed, bar an owner from applying for or collecting any rent in excess of the legal regulated rent in effect on the date of the last preceding registration statement or if no such statements have been filed, the legal regulated rent in effect on the date that the housing accommo- dation became subject to the registration requirements of this section. The filing of a late registration shall result in the prospective elimi- nation of such sanctions and provided that increases in the legal regu- lated rent were lawful except for the failure to file a timely registra- tion, the owner, upon the service and filing of a late registration, S. 2980--B 15 shall not be found to have collected an overcharge at any time prior to the filing of the late registration. [If such late registration is filed subsequent to the filing of an overcharge complaint, the owner shall be assessed a late filing surcharge for each late registration in an amount equal to fifty percent of the timely rent registration fee.] IN ADDITION TO ALL OTHER REQUIREMENTS SET FORTH IN THIS SUBDIVISION, IN THE EVENT A TIMELY RENT REGISTRATION IS NOT FILED AND AFTER NOTICE OF SUCH DELIN- QUENCY IS PROVIDED BY THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL TO THE OWNER IN THE FORM OF ELECTRONIC MAIL AND MAIL TO THE ADDRESS LISTED IN THE OWNER'S MOST RECENT REGISTRATION STATEMENT, THE OWNER SHALL BE SUBJECT TO A FINE OF FIVE HUNDRED DOLLARS PER UNREGIS- TERED UNIT FOR EACH MONTH THE REGISTRATION IS DELINQUENT. SUCH A FINE SHALL BE IMPOSED BY ORDER, AND SUCH ORDER IMPOSING A FINE SHALL BE DEEMED A FINAL DETERMINATION FOR THE PURPOSES OF JUDICIAL REVIEW. SUCH FINE MAY, UPON THE EXPIRATION OF THE PERIOD FOR SEEKING REVIEW PURSUANT TO ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES, BE DOCKET- ED AND ENFORCED IN THE MANNER OF A JUDGMENT OF THE SUPREME COURT BY THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL. § 2. Subdivision e of section 12-a of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of nine- teen seventy-four, as amended by chapter 253 of the laws of 1993, is amended to read as follows: e. The failure to file a proper and timely initial or annual rent registration statement shall, until such time as such registration is filed, bar an owner from applying for or collecting any rent in excess of the legal regulated rent in effect on the date of the last preceding registration statement or if no such statements have been filed, the legal regulated rent in effect on the date that the housing accommo- dation became subject to the registration requirements of this section. The filing of a late registration shall result in the prospective elimi- nation of such sanctions and provided that increases in the legal regu- lated rent were lawful except for the failure to file a timely registra- tion, the owner, upon the service and filing of a late registration, shall not be found to have collected an overcharge at any time prior to the filing of the late registration. [If such late registration is filed subsequent to the filing of an overcharge complaint, the owner shall be assessed a late filing surcharge for each late registration in an amount equal to fifty percent of the timely rent registration fee.] IN ADDITION TO ALL OTHER REQUIREMENTS SET FORTH IN THIS SUBDIVISION, IN THE EVENT A TIMELY RENT REGISTRATION IS NOT FILED AND AFTER NOTICE OF SUCH DELIN- QUENCY IS PROVIDED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL TO THE OWNER IN THE FORM OF ELECTRONIC MAIL AND MAIL TO THE ADDRESS LISTED IN THE OWNER'S MOST RECENT REGISTRATION STATEMENT, THE OWNER SHALL BE SUBJECT TO A FINE OF FIVE HUNDRED DOLLARS PER UNREGISTERED UNIT FOR EACH MONTH THE REGISTRATION IS DELINQUENT. SUCH A FINE SHALL BE IMPOSED BY ORDER, AND SUCH ORDER IMPOSING A FINE SHALL BE DEEMED A FINAL DETERMI- NATION FOR THE PURPOSES OF JUDICIAL REVIEW. SUCH FINE MAY, UPON THE EXPIRATION OF THE PERIOD FOR SEEKING REVIEW PURSUANT TO ARTICLE SEVEN- TY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES, BE DOCKETED AND ENFORCED IN THE MANNER OF A JUDGMENT OF THE SUPREME COURT BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL. § 3. Subdivision 1 of section 14 of the public housing law is amended by adding a new paragraph (x) to read as follows: (X) ENFORCE THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY- FOUR, THE EMERGENCY HOUSING RENT CONTROL LAW, THE LOCAL EMERGENCY HOUS- ING RENT CONTROL ACT, THE RENT STABILIZATION LAW OF THE CITY OF NEW YORK S. 2980--B 16 AND ANY REGULATIONS, RULES AND POLICIES ENACTED PURSUANT THERETO, IN ADDITION TO ANY OTHER LAWS, RULES OR REGULATIONS RELATED TO HOUSING THAT IS FINANCED, ADMINISTERED, OVERSEEN OR OTHERWISE REGULATED BY THE AGENCY OR ITS RELATED ENTITIES WHICH CONSTITUTE COMPONENT PARTS OF THE DIVI- SION; SUCH ENFORCEMENT AUTHORITY SHALL INCLUDE, BUT NOT BE LIMITED TO, ALL OF THE POWERS GRANTED BY THE OTHER PROVISIONS OF THIS SUBDIVISION, THE STATUTES, RULES, REGULATIONS AND OTHER DOCUMENTS GOVERNING THE ADMINISTRATION OF HOUSING BY THE DIVISION, AND, WHERE APPLICABLE, THE POWER TO ISSUE ORDERS. § 4. This act shall take effect immediately, provided that the amend- ments to section 26-517 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. § 2. Severability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review, the judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, para- graph, section or part of this act directly involved in the controversy in which the judgment shall have been rendered. § 3. This act shall take effect immediately provided, however, that the applicable effective date of Parts A through E of this act shall be as specifically set forth in the last section of such Parts.
co-Sponsors
(D) 30th Senate District
(D, WF) 47th Senate District
(D, WF) 31st Senate District
(D, WF) 28th Senate District
(D) 20th Senate District
(D, WF) 33rd Senate District
2023-S2980C (ACTIVE) - Details
2023-S2980C (ACTIVE) - Summary
Establishes the legal regulated rent for the combination of two or more vacant apartments; defines permanently vacated; relates to exemptions from rent stabilization on the basis of substantial rehabilitation; relates to public hearings by the city rent agency (Part A)
2023-S2980C (ACTIVE) - Sponsor Memo
BILL NUMBER: S2980C SPONSOR: KAVANAGH 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 establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emergency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial rehabilitation; and to repeal paragraph (d) of subdivision 4 of section 14 of the public housing law, in relation thereto (Part A); to define clearly the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents (Part B); and to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four and the public housing law, in relation to the failure of owners to file rent registra- tion statements and the enforcement powers of the commissioner of hous- ing and community renewal (Part C) PURPOSE:
The legislature passed the Housing Stability and Tenant Protection Act of 2019 to transform and strengthen many of our state's laws that protect tenants and provide housing stability. This bill seeks to address certain gaps in these laws that persist after that landmark legislation and to make some technical corrections. SUMMARY OF PROVISIONS: Section 1 of the bill sets forth the structure of the bill, with three components Parts A, B, and C. PART A Section 1 of Part A of the bill amends subdivision c of section 26-511 of the administrative code of the city of New York by adding a new para- graph 15. Part (a) of the new paragraph 15 provides that where a landlord combines two or more vacant rent stabilized apartments, the legal regulated rent for the combined apartment shall be the sum of the rents of the formerly separate apartments. If a non-regulated apartment is combined with a regulated apartment, the resulting apartment shall be subject to rent regulation. Part (b) of the new paragraph 15 provides that where a landlord substan- tially increases the outer dimensions of a unit, the initial legal regu- lated rent for that unit shall be its prior rent plus a percentage of rent that is equal to the percentage by which the unit has increased. Other authorized increases may also apply. Part (c) of the new paragraph 15 provides for the denial of rent increases if vacancy had previously occurred due to harassment, fraud, or other acts of evasion. Part (d) of the new paragraph 15 provides that where the units are combined pursuant to a federal, state, or local regulatory agreement, the rent of the combined units shall be the amount of an initial rent set by the regulatory agency. Part (e) of the new paragraph 15 provides that where a landlord substan- tially reduces the dimensions of a unit, the initial legal regulated rent for the reduced apartment shall be the prior rent reduced in proportion to the reduction in floor area. Other authorized increases may also apply. Part (f) of the new paragraph 15 specifies guidelines as to the manner in which provisions governing individual apartment improvements may apply to the combination of units. Part (g) of the new paragraph 15 requires owners to maintain records and rent histories of all combined apartments before and after combination. Section 2 of Part A amends subdivision (a) of section 10-b of the emer- gency tenant protection act of 1974 by adding a new paragraph 13 in the same manner as Section 1 of the bill amends the New York city adminis- trative code, as described above. Section 3 of Part A of the bill amends the opening paragraph of para- graph (a) of subdivision 4 of section 14 of the public housing law to define the term "permanently vacated" for the purpose of determining succession rights of a member of a tenant's family. Section 4 of Part A of the bill repeals paragraph (d) of subdivision 4 of section 14 of the Public Housing Law relating to the vacancy bonus and references, which were repealed as part of the HSTPA. Section 5 of Part A of the bill amends paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of 1974 to clarify and limit the circumstances in which a landlord may claim exemption from rent stabili- zation on the basis of substantial rehabilitation, and to require approval for such claim by the division of housing and community renewal. Section 6 of Part A of the bill sets forth the effective date for Part A, providing that it shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amend- ments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York 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. PART B Section 1 of Part B of the bill sets forth the legislative findings. Section 2 of Part B of the bill sets forth various provisions regarding the use, retention, and destruction of certain records, the circum- stances in which a landlord shall be deemed to have committed fraud when unlawfully deregulating or failing to register an apartment, and other matters. Section 3 of Part B of the bill sets forth the effective date for Part B, providing that it shall take effect immediately. PART C Sections 1 and 2 of Part C of the bill amends the administrative code of the City of New York and the emergency tenant protection act of nineteen seventy-four, respectively, to establish a penalty for building owners' failure to file a timely rent registration statement with the NYS Divi- sion of Housing and Community Renewal for rent-regulated apartments. An owner shall be fined $500 per unregistered unit for each month a regis- tration is delinquent, and such fine shall be subject to enforcement in court. Section 1 of Part C of the bill amends subdivision e of section 26-517 of the administrative code of the City of New York for that purpose. Section 2 of Part C of the bill amends subdivision e of section 12-a of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, for the same purpose. Section 3 of Part C of the bill amends subdivision 1 of section 14 of the public housing law by adding a new paragraph (x) to specify as powers and duties of the commissioner of the Division of Housing and Community Renewal their enforcement authority over all the laws, rules, and regulations related to housing that is financed, administered, over- seen, or otherwise regulated by the agency. Section 4 of Part C of the bill sets forth the effective date for Part C, providing that it shall take effect immediately, provided that the amendments to section 26-517 of chapter 4 of title 26 of the administra- tive 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. Section 2 of the bill sets forth a severability clause. Section 3 of the bill sets forth the effective date. JUSTIFICATION: The Housing Stability and Tenant Protection Act of 2019 (HSTPA) trans- formed and strengthened many of the state's laws that protect tenants and provide housing stability. This bill seeks to address certain gaps in these laws that persist after that landmark legislation in the vari- ous ways detailed in the summary of provisions above and to make some technical corrections. Part A Section 1 and Section 2 On August 31, 2022, NYS Homes and Community Renewal (HCR) released proposed updates to the regulations authorized under the rent stabiliza- tion laws, including language that would address the combination of rent-regulated units (a practice sometimes popularly known as "franken- steining"), which has enabled owners to set a new first rent for the combined unit, often at a much higher level than the rents of the once separate apartments. Adopting HCR's proposed regulations in statute would address this issue and ensure combined units remain at a level of affordability that matches the increases or reductions in unit size. Section 3 This part also defines what constitutes "permanently vacated," with the goal of providing clarity on instances where a tenant's move-out may not correspond with the end of a lease or the termination of rent payments. This is needed to address the fact that courts have differed in their interpretation of current law, with the first and second appellate divi- sions holding different views. The provisions of this bill would conform the rule to the second department's position, to ensure that family members eligible for succession do not lose their rights because of a delay in reporting vacatur to the landlord. Section 4 The HSTPA repealed vacancy bonuses for rent regulated units in all sections of law referenced in this paragraph. Section 5 By requiring owners to seek and secure approval from HCR prior to claim- ing rent stabilization exemption on the basis of substantial rehabili- tation, the added level of agency oversight would prevent the destabili- zation of units where owners fail to substantiate their claims of having substantial work performed that merits exemption from rent stabiliza- tion. Part B Part F of the HSTPA allowed HCR or a court to review six years of rent history when determining rent overcharges. Since then, the Court of Appeals limited the retroactive application of these provisions when it comes to overcharges and the requirement that property owners reimburse tenants for illegally charged rents. This amendment will help clarify the purpose of Part F of HSTPA in order to effectuate the legislature's original intent in enacting the provision. These amendments will address the Court of Appeals' concerns regarding constitutional limitations and will make litigation less necessary with regard to certain issues that have not been settled by the courts. In particular, this bill will clarify the prospective reach of certain provisions of Part F, in light of recent court decisions including Regina Metro v. DHCR. PART C Sections 1 and 2 Owners of rent-regulated housing are required to submit annual registra- tion statements for each regulated unit under their ownership by no later than July 31 of each year. However, the current penalty for fail- ure to submit a timely registration is half of the rent registration filing fee of $20, or a mere $10 per apartment -- hardly a deterrent for noncompliance. Increasing the late- registration fee to $500 per unit per month of delinquency would prescribe a level of penalty that owners would be more likely to avoid and would result in more on-time rent registrations filings. Section 3 HCR is the agency designated in numerous laws and regulations to promul- gate rules, administer, supervise, and enforce housing-related policies, programs, and financing activities. This section grants the HCR commis- sioner the necessary enforcement powers to carry out the duties required of the agency. LEGISLATIVE HISTORY: 2021-2022: S7213A (Kavanagh) - referred to Housing FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Minimal. EFFECTIVE DATE: This act shall take effect immediately provided, however, that the applicable effective date of Parts A through C of this act shall be as specifically set forth in the last section of such Parts.
2023-S2980C (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 2980--C Cal. No. 747 2023-2024 Regular Sessions I N S E N A T E January 26, 2023 ___________ Introduced by Sens. KAVANAGH, CLEARE, HOYLMAN-SIGAL, JACKSON, KRUEGER, MYRIE, RIVERA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading 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 establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the public housing law, in relation to defining permanently vacated; to amend the emergency tenant protection act of nineteen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial reha- bilitation; and to repeal paragraph (d) of subdivision 4 of section 14 of the public housing law, in relation thereto (Part A); to define clearly the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents (Part B); and to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four and the public housing law, in relation to the failure of owners to file rent registration statements and the enforcement powers of the commissioner of housing and community renewal (Part C) THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act enacts into law components of legislation relating to rent regulation and tenant protection. Each component is wholly contained within a Part identified as Parts A through C. The effective date for each particular provision contained within such Part is set EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted.
LBD07250-12-3 S. 2980--C 2 forth in the last section of such Part. Any provision in any section contained within a Part, including the effective date of the Part, which makes reference to a section "of this act", when used in connection with that particular component, shall be deemed to mean and refer to the corresponding section of the Part in which it is found. Section three of this act sets forth the general effective date of this act. PART A Section 1. Subdivision c of section 26-511 of the administrative code of the city of New York is amended by adding a new paragraph 15 to read as follows: (15) (A) WHERE AN OWNER COMBINES TWO OR MORE VACANT HOUSING ACCOMMO- DATIONS OR COMBINES A VACANT HOUSING ACCOMMODATION WITH AN OCCUPIED HOUSING ACCOMMODATION, SUCH INITIAL RENT FOR SUCH NEW HOUSING ACCOMMO- DATION SHALL BE THE COMBINED LEGAL RENT FOR BOTH PREVIOUS HOUSING ACCOM- MODATIONS, SUBJECT TO ANY APPLICABLE GUIDELINE INCREASES AND ANY OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY INDIVIDUAL APARTMENT IMPROVEMENT INCREASES APPLICABLE FOR BOTH HOUSING ACCOMMODATIONS. IF AN OWNER COMBINES A RENT REGULATED ACCOMMODATION WITH AN APARTMENT NOT SUBJECT TO RENT REGULATION, THE RESULTING APARTMENT SHALL BE SUBJECT TO THIS CHAPTER. IF AN OWNER INCREASES THE AREA OF AN APARTMENT NOT SUBJECT TO RENT REGULATION BY ADDING SPACE THAT WAS PREVIOUSLY PART OF A RENT REGULATED APARTMENT, EACH APARTMENT SHALL BE SUBJECT TO THIS CHAPTER. (B) WHERE AN OWNER SUBSTANTIALLY INCREASES THE OUTER DIMENSION OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, INCREASED BY A PERCENTAGE THAT IS EQUAL TO THE PERCENTAGE INCREASE IN THE DWELLING SPACE AND SUCH OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE UNIT PRIOR TO THE ALTERATION OF THE OUTER DIMENSIONS. (C) NOTWITHSTANDING SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH, SUCH INCREASES MAY BE DENIED BASED ON THE OCCURRENCE OF SUCH VACANCY DUE TO HARASSMENT, FRAUD, OR OTHER ACTS OF EVASION WHICH MAY REQUIRE THAT SUCH RENT BE SET IN ACCORDANCE WITH SECTION 26-516 OF THIS TITLE. (D) WHERE THE VACANT HOUSING ACCOMMODATIONS ARE COMBINED, MODIFIED, DIVIDED OR THE DIMENSION OF SUCH HOUSING ACCOMMODATION OTHERWISE ALTERED AND THESE CHANGES ARE BEING MADE PURSUANT TO A PRESERVATION REGULATORY AGREEMENT WITH A FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR INSTRU- MENTALITY, THE RENT STABILIZED RENTS CHARGED THEREAFTER SHALL BE BASED ON AN INITIAL RENT SET BY SUCH AGENCY OR INSTRUMENTALITY, PROVIDED SUCH INITIAL RENT SHALL NOT BE HIGHER THAN IF THE INITIAL RENT WAS CALCULATED IN ACCORDANCE WITH SUBPARAGRAPHS (A), (B), (E) OR (F) OF THIS PARAGRAPH. (E) WHERE AN OWNER SUBSTANTIALLY DECREASES THE OUTER DIMENSIONS OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, DECREASED BY THE SAME PERCENTAGE THE SQUARE FOOTAGE OF THE ORIGINAL APARTMENT WAS DECREASED BY AND SUCH OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE APARTMENT PRIOR TO THE ALTERATION OF THE OUTER DIMEN- SIONS. (F)(I) WHEN AN OWNER COMBINES TWO OR MORE RENT REGULATED APARTMENTS, THE OWNER MAY USE EACH OF THE PREVIOUS APARTMENTS' REMAINING INDIVIDUAL APARTMENT IMPROVEMENT ALLOWANCES FOR THE PURPOSES OF A TEMPORARY INDI- VIDUAL APARTMENT IMPROVEMENT RENT INCREASE. THE OWNER SHALL SUBSEQUENTLY DESIGNATE A SURVIVING APARTMENT FOR THE PURPOSES OF REGISTRATION THAT S. 2980--C 3 HAS THE SAME APARTMENT NUMBER AS ONE OF THE PRIOR APARTMENTS. IF THAT PRIOR APARTMENT HAS ANY REIMBURSABLE INDIVIDUAL APARTMENT IMPROVEMENT MONEY REMAINING AFTER THE COMBINATION, THAT MONEY MAY BE REIMBURSED FOR FUTURE INDIVIDUAL APARTMENT IMPROVEMENTS UNDERTAKEN WITHIN THE SUBSE- QUENT FIFTEEN YEARS FOLLOWING THE COMBINATION. (II) IN ORDER FOR AN OWNER TO QUALIFY FOR A TEMPORARY INDIVIDUAL APARTMENT IMPROVEMENT RENT INCREASE WHEN APARTMENTS ARE COMBINED, THE REQUIREMENTS FOR AN INDIVIDUAL APARTMENT IMPROVEMENT, INCLUDING ALL NOTIFICATION REQUIREMENTS UNDER THIS CHAPTER SHALL BE MET. (G) OWNERS SHALL MAINTAIN THE RECORDS AND RENT HISTORIES OF ALL COMBINED APARTMENTS, BOTH PRIOR TO AND POST COMBINATION, FOR THE PURPOSES OF RENT SETTING, OVERCHARGE AND ALL OTHER PROCEEDINGS TO WHICH THE RECORDS ARE APPLICABLE. § 2. Subdivision (a) of section 10-b of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, is amended by adding a new paragraph 13 to read as follows: 13. (I) WHERE AN OWNER COMBINES TWO OR MORE VACANT HOUSING ACCOMMO- DATIONS OR COMBINES A VACANT HOUSING ACCOMMODATION WITH AN OCCUPIED HOUSING ACCOMMODATION, SUCH INITIAL RENT FOR SUCH NEW HOUSING ACCOMMO- DATION SHALL BE THE COMBINED LEGAL RENT FOR BOTH PREVIOUS HOUSING ACCOM- MODATIONS, SUBJECT TO ANY APPLICABLE GUIDELINE INCREASES AND ANY OTHER INCREASES AUTHORIZED BY THIS CHAPTER INCLUDING ANY INDIVIDUAL APARTMENT IMPROVEMENT INCREASES APPLICABLE FOR BOTH HOUSING ACCOMMODATIONS. IF AN OWNER COMBINES A RENT REGULATED ACCOMMODATION WITH AN APARTMENT NOT SUBJECT TO RENT REGULATION, THE RESULTING APARTMENT SHALL BE SUBJECT TO THIS ACT. IF AN OWNER INCREASES THE AREA OF AN APARTMENT NOT SUBJECT TO RENT REGULATION BY ADDING SPACE THAT WAS PREVIOUSLY PART OF A RENT REGU- LATED APARTMENT, EACH APARTMENT SHALL BE SUBJECT TO THIS ACT. (II) WHERE AN OWNER SUBSTANTIALLY INCREASES THE OUTER DIMENSION OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, INCREASED BY A PERCENTAGE THAT IS EQUAL TO THE PERCENTAGE INCREASE IN THE DWELLING SPACE AND SUCH OTHER INCREASES AUTHORIZED BY THIS ACT INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE AUTHORIZED FOR THE UNIT PRIOR TO THE ALTERATION OF THE OUTER DIMENSIONS. (III) NOTWITHSTANDING SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH, SUCH INCREASES MAY BE DENIED BASED ON THE OCCURRENCE OF SUCH VACANCY DUE TO HARASSMENT, FRAUD, OR OTHER ACTS OF EVASION WHICH MAY REQUIRE THAT SUCH RENT BE SET IN ACCORDANCE WITH SECTION TWELVE OF THIS ACT. (IV) WHERE THE VACANT HOUSING ACCOMMODATIONS ARE COMBINED, MODIFIED, DIVIDED OR THE DIMENSION OF SUCH HOUSING ACCOMMODATION OTHERWISE ALTERED AND THESE CHANGES ARE BEING MADE PURSUANT TO A PRESERVATION REGULATORY AGREEMENT WITH A FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR INSTRU- MENTALITY, THE RENT STABILIZED RENTS CHARGED THEREAFTER SHALL BE BASED ON AN INITIAL RENT SET BY SUCH AGENCY OR INSTRUMENTALITY, PROVIDED SUCH INITIAL RENT SHALL NOT BE HIGHER THAN IF THE INITIAL RENT WAS CALCULATED IN ACCORDANCE WITH SUBPARAGRAPHS (I), (II), (V) OR (VI) OF THIS PARA- GRAPH. (V) WHERE AN OWNER SUBSTANTIALLY DECREASES THE OUTER DIMENSIONS OF A VACANT HOUSING ACCOMMODATION, SUCH INITIAL RENT SHALL BE THE PRIOR RENT OF SUCH HOUSING ACCOMMODATION, DECREASED BY THE SAME PERCENTAGE THE SQUARE FOOTAGE OF THE ORIGINAL APARTMENT WAS DECREASED BY AND SUCH OTHER INCREASES AUTHORIZED BY THIS ACT INCLUDING ANY APPLICABLE GUIDELINE INCREASE AND INDIVIDUAL APARTMENT IMPROVEMENT INCREASE THAT COULD BE S. 2980--C 4 AUTHORIZED FOR THE APARTMENT PRIOR TO THE ALTERATION OF THE OUTER DIMEN- SIONS. (VI)(1) WHEN AN OWNER COMBINES TWO OR MORE RENT REGULATED APARTMENTS, THE OWNER MAY USE EACH OF THE PREVIOUS APARTMENTS' REMAINING INDIVIDUAL APARTMENT IMPROVEMENT ALLOWANCES FOR THE PURPOSES OF A TEMPORARY INDI- VIDUAL APARTMENT IMPROVEMENT RENT INCREASE. THE OWNER SHALL SUBSEQUENTLY DESIGNATE A SURVIVING APARTMENT FOR THE PURPOSES OF REGISTRATION THAT HAS THE SAME APARTMENT NUMBER AS ONE OF THE PRIOR APARTMENTS. IF THAT PRIOR APARTMENT HAS ANY REIMBURSABLE INDIVIDUAL APARTMENT IMPROVEMENT MONEY REMAINING AFTER THE COMBINATION, THAT MONEY MAY BE REIMBURSED FOR FUTURE INDIVIDUAL APARTMENT IMPROVEMENTS UNDERTAKEN WITHIN THE SUBSE- QUENT FIFTEEN YEARS FOLLOWING THE COMBINATION. (2) IN ORDER FOR AN OWNER TO QUALIFY FOR A TEMPORARY INDIVIDUAL APART- MENT IMPROVEMENT RENT INCREASE WHEN APARTMENTS ARE COMBINED, THE REQUIREMENTS FOR AN INDIVIDUAL APARTMENT IMPROVEMENT, INCLUDING ALL NOTIFICATION REQUIREMENTS UNDER THIS ACT SHALL BE MET. (VII) OWNERS SHALL MAINTAIN THE RECORDS AND RENT HISTORIES OF ALL COMBINED APARTMENTS, BOTH PRIOR TO AND POST COMBINATION, FOR THE PURPOSES OF RENT SETTING, OVERCHARGE AND ALL OTHER PROCEEDINGS TO WHICH THE RECORDS ARE APPLICABLE. § 3. The opening paragraph of paragraph (a) of subdivision 4 of section 14 of the public housing law, as added by chapter 116 of the laws of 1997, is amended to read as follows: that unless otherwise prohibited by occupancy restrictions based upon income limitations pursuant to federal, state or local law, regulations or other requirements of governmental agencies, any member of the tenant's family, as defined in paragraph (c) of this subdivision, shall succeed to the rights of a tenant under such acts and laws where the tenant has permanently vacated the housing accommodation and such family member has resided with the tenant in the housing accommodation as a primary residence for a period of no less than two years, or where such person is a "senior citizen" or a "disabled person," as defined in para- graph (c) of this subdivision, for a period of no less than one year, immediately prior to the permanent vacating of the housing accommodation by the tenant, or from the inception of the tenancy or commencement of the relationship, if for less than such periods. FOR THE PURPOSES OF THIS PARAGRAPH, "PERMANENTLY VACATED" SHALL MEAN THE DATE WHEN THE TENANT OF RECORD PERMANENTLY STOPS RESIDING IN THE HOUSING ACCOMMODATION REGARDLESS OF SUBSEQUENT CONTACTS WITH THE UNIT OR THE SIGNING OF LEASE RENEWALS OR CONTINUATION OF RENT PAYMENTS. The minimum periods of required residency set forth in this subdivision shall not be deemed to be interrupted by any period during which the "family member" temporar- ily relocates because he or she: § 4. Paragraph (d) of subdivision 4 of section 14 of the public hous- ing law is REPEALED. § 5. Paragraph 5 of subdivision a of section 5 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, is amended to read as follows: (5) housing accommodations in buildings completed or buildings substantially rehabilitated as family units on or after January first, nineteen hundred seventy-four; PROVIDED THAT AN OWNER CLAIMING EXEMPTION FROM RENT STABILIZATION ON THE BASIS OF SUBSTANTIAL REHABILITATION SHALL SEEK APPROVAL FROM STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL WITH- IN ONE YEAR OF THE COMPLETION OF THE SUBSTANTIAL REHABILITATION, OR FOR ANY BUILDING PREVIOUSLY ALLEGED TO HAVE BEEN SUBSTANTIALLY REHABILITATED BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND S. 2980--C 5 TWENTY-THREE THAT AMENDED THIS PARAGRAPH, WITHIN SIX MONTHS OF SUCH EFFECTIVE DATE, AND ULTIMATELY OBTAIN SUCH APPROVAL, WHICH SHALL BE DENIED ON THE FOLLOWING GROUNDS: (A) THE OWNER OR ITS PREDECESSORS IN INTEREST HAVE ENGAGED IN HARASS- MENT OF TENANTS IN THE FIVE YEARS PRECEDING THE COMPLETION OF THE SUBSTANTIAL REHABILITATION; (B) THE BUILDING WAS NOT IN A SUBSTANDARD OR SERIOUSLY DETERIORATED CONDITION REQUIRING SUBSTANTIAL REHABILITATION; § 6. This act shall take effect immediately and shall apply to all pending proceedings on and after such date; provided that the amendments to section 26-511 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. PART B Section 1. Legislative findings. The legislature hereby finds and declares that in light of court decisions arising under the Housing Stability and Tenant Protection Act of 2019 (HSTPA), including REGINA METRO V. DHCR, it is public policy that the legislature define clearly the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents which remains unsettled and the subject of litigation where courts have diverged from the controlling authority of THORNTON V. BARON and GRIMM V. DHCR to impose a common law fraud standard that is not found in these cases and is inconsistent with the intent of the legislature to discourage and penalize fraud against the rent regulatory system itself, as well as against individual tenants, and it is there- fore public policy that the legislature codify, without expanding or reducing the liability of landlords under pre-HSTPA law, the standard for applying that exception. § 2. (a) Nothing in this act, or the HSTPA, or prior law, shall be construed as restricting, impeding or diminishing the use of records of any age or type, going back to any date that may be relevant, for purposes of determining the status of any apartment under the rent stabilization law; (b) With respect to the calculation of legal rents for the period either prior to or subsequent to June 14, 2019, an owner shall be deemed to have committed fraud if the owner shall have committed a material breach of any duty, arising under statutory, administrative or common law, to disclose truthfully to any tenant, government agency or judicial or administrative tribunal, the rent, regulatory status, or lease infor- mation, for purposes of claiming an unlawful rent or claiming to have deregulated an apartment, whether or not the owner's conduct would be considered fraud under the common law, and whether or not a complaining tenant specifically relied on untruthful or misleading statements in registrations, leases, or other documents. The following conduct shall be presumed to have been the product of such fraud: (1) the unlawful deregulation of any apartment, including such deregulation as results from claiming an unlawful increase such as would have brought the rent over the deregulation threshold that existed under prior law, unless the landlord can prove good faith reliance on a directive or ruling by an administrative agency or court; or (2) beginning October 1, 2011, fail- ing to register, as rent stabilized, any apartment in a building receiv- ing J-51 or 421-a benefits. § 3. This act shall take effect immediately. S. 2980--C 6 PART C Section 1. Subdivision e of section 26-517 of the administrative code of the city of New York, as amended by chapter 253 of the laws of 1993, is amended to read as follows: e. The failure to file a proper and timely initial or annual rent registration statement shall, until such time as such registration is filed, bar an owner from applying for or collecting any rent in excess of the legal regulated rent in effect on the date of the last preceding registration statement or if no such statements have been filed, the legal regulated rent in effect on the date that the housing accommo- dation became subject to the registration requirements of this section. The filing of a late registration shall result in the prospective elimi- nation of such sanctions and provided that increases in the legal regu- lated rent were lawful except for the failure to file a timely registra- tion, the owner, upon the service and filing of a late registration, shall not be found to have collected an overcharge at any time prior to the filing of the late registration. [If such late registration is filed subsequent to the filing of an overcharge complaint, the owner shall be assessed a late filing surcharge for each late registration in an amount equal to fifty percent of the timely rent registration fee.] IN ADDITION TO ALL OTHER REQUIREMENTS SET FORTH IN THIS SUBDIVISION, IN THE EVENT A TIMELY RENT REGISTRATION IS NOT FILED AND AFTER NOTICE OF SUCH DELIN- QUENCY IS PROVIDED BY THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL TO THE OWNER IN THE FORM OF ELECTRONIC MAIL AND MAIL TO THE ADDRESS LISTED IN THE OWNER'S MOST RECENT REGISTRATION STATEMENT, THE OWNER SHALL BE SUBJECT TO A FINE OF FIVE HUNDRED DOLLARS PER UNREGIS- TERED UNIT FOR EACH MONTH THE REGISTRATION IS DELINQUENT. SUCH A FINE SHALL BE IMPOSED BY ORDER, AND SUCH ORDER IMPOSING A FINE SHALL BE DEEMED A FINAL DETERMINATION FOR THE PURPOSES OF JUDICIAL REVIEW. SUCH FINE MAY, UPON THE EXPIRATION OF THE PERIOD FOR SEEKING REVIEW PURSUANT TO ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES, BE DOCKET- ED AND ENFORCED IN THE MANNER OF A JUDGMENT OF THE SUPREME COURT BY THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL. § 2. Subdivision e of section 12-a of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of nine- teen seventy-four, as amended by chapter 253 of the laws of 1993, is amended to read as follows: e. The failure to file a proper and timely initial or annual rent registration statement shall, until such time as such registration is filed, bar an owner from applying for or collecting any rent in excess of the legal regulated rent in effect on the date of the last preceding registration statement or if no such statements have been filed, the legal regulated rent in effect on the date that the housing accommo- dation became subject to the registration requirements of this section. The filing of a late registration shall result in the prospective elimi- nation of such sanctions and provided that increases in the legal regu- lated rent were lawful except for the failure to file a timely registra- tion, the owner, upon the service and filing of a late registration, shall not be found to have collected an overcharge at any time prior to the filing of the late registration. [If such late registration is filed subsequent to the filing of an overcharge complaint, the owner shall be assessed a late filing surcharge for each late registration in an amount equal to fifty percent of the timely rent registration fee.] IN ADDITION TO ALL OTHER REQUIREMENTS SET FORTH IN THIS SUBDIVISION, IN THE EVENT A TIMELY RENT REGISTRATION IS NOT FILED AND AFTER NOTICE OF SUCH DELIN- S. 2980--C 7 QUENCY IS PROVIDED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL TO THE OWNER IN THE FORM OF ELECTRONIC MAIL AND MAIL TO THE ADDRESS LISTED IN THE OWNER'S MOST RECENT REGISTRATION STATEMENT, THE OWNER SHALL BE SUBJECT TO A FINE OF FIVE HUNDRED DOLLARS PER UNREGISTERED UNIT FOR EACH MONTH THE REGISTRATION IS DELINQUENT. SUCH A FINE SHALL BE IMPOSED BY ORDER, AND SUCH ORDER IMPOSING A FINE SHALL BE DEEMED A FINAL DETERMI- NATION FOR THE PURPOSES OF JUDICIAL REVIEW. SUCH FINE MAY, UPON THE EXPIRATION OF THE PERIOD FOR SEEKING REVIEW PURSUANT TO ARTICLE SEVEN- TY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES, BE DOCKETED AND ENFORCED IN THE MANNER OF A JUDGMENT OF THE SUPREME COURT BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL. § 3. Subdivision 1 of section 14 of the public housing law is amended by adding a new paragraph (x) to read as follows: (X) ENFORCE THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY- FOUR, THE EMERGENCY HOUSING RENT CONTROL LAW, THE LOCAL EMERGENCY HOUS- ING RENT CONTROL ACT, THE RENT STABILIZATION LAW OF NINETEEN SIXTY-NINE AND ANY REGULATIONS, RULES AND POLICIES ENACTED PURSUANT THERETO, IN ADDITION TO ANY OTHER LAWS, RULES OR REGULATIONS RELATED TO HOUSING THAT IS FINANCED, ADMINISTERED, OVERSEEN OR OTHERWISE REGULATED BY THE AGENCY OR ITS RELATED ENTITIES WHICH CONSTITUTE COMPONENT PARTS OF THE DIVI- SION; SUCH ENFORCEMENT AUTHORITY SHALL INCLUDE, BUT NOT BE LIMITED TO, ALL OF THE POWERS GRANTED BY THE OTHER PROVISIONS OF THIS SUBDIVISION, THE STATUTES, RULES, REGULATIONS AND OTHER DOCUMENTS GOVERNING THE ADMINISTRATION OF HOUSING BY THE DIVISION, AND, WHERE APPLICABLE, THE POWER TO ISSUE ORDERS. § 4. This act shall take effect immediately, provided that the amend- ments to section 26-517 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. § 2. Severability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review, the judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, para- graph, section or part of this act directly involved in the controversy in which the judgment shall have been rendered. § 3. This act shall take effect immediately provided, however, that the applicable effective date of Parts A through C of this act shall be as specifically set forth in the last section of such Parts.
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