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.

                             
                     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.

                             
                     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.