Senate Bill S7029

                                 
BILL NUMBER: S7029

SPONSOR: CLEARE
 
TITLE OF BILL:

An act to amend the multiple dwelling law and the multiple residence
law, in relation to the collection of charges for heat-related residen-
tial utility service

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would amend section 79 of the Multiple Dwelling Law to elimi-
nate the practice of building owners charging residential rental tenants
for electricity, natural gas, and other fuel used for space heating in
the dwelling unit.

 
SUMMARY OF SPECIFIC PROVISIONS:

Subdivision 1 of section 79 of the multiple dwelling law is amended to
prohibit an owner or agent of any owner from separately charging tenants
or occupants for any electricity, electric service, natural gas or
natural gas service or other fuel utilized to heat living quarters.
              

Section 173 of the multiple residence law is amended to do the same.

 
JUSTIFICATION:

Shifting heating costs to tenants reduces economic incentives for land-
lords to improve the thermal efficiency of their structures, through
measures such as insulation, window replacement with high efficiency
glass, and provide more efficient heating systems, fixtures, and smart
controls. This is contrary to state policy to promote energy efficiency
and to reduce greenhouse gas emissions. As utility costs rise, some
building owners have begun to shift their costs for fuel and electricity
onto their tenants, by requiring tenants to pay heating surcharges,
separate and apart from rent, for fuel or electricity used to heat their
dwelling units. These surcharges are based on consumption measured by
either landlord-owned meters, or based on apartment square footage allo-
cations. These surcharges, typically for natural gas or electricity, are
inherently unpredictable, are not quantified in tenant leases, and are
not knowable in advance. As such, they cause great hardship to tenants
living on fixed incomes from social security, disability and pensions,
who lack significant savings. Frequently, heating surcharges imposed by
owners are not subject to outside audit or verification by the tenant
and are therefore inherently prone to abuse.

Shifting building owners' heating costs to tenants through unpredictable
and continually varying surcharges renders these costs not transparent
to tenants, because owners are not obligated to reveal the energy inef-
ficiencies of their buildings or the amount of energy wasted by the
heating equipment they operate. In contrast, if building owners retain
direct responsibility for heating costs, they will recover those costs
in the rent they charge and they will have the incentive to adopt cost
effective efficiency measures. The charge for rent is fixed and trans-
parent, and can be understood by existing and prospective tenants. The
Multiple Dwelling Law already imposes upon landlords the obligation to
provide heat or heating fixtures to tenants. This bill prevents owners
of multiple dwellings from imposing charges for natural gas, electric-
ity, or other fuel used for space heating separate from the stated rent.
It does not affect situations where a tenant has directly metered gas or
electric service from a franchised gas corporation or electric corpo-
ration.  Requiring tenants to pay surcharges to building owners for fuel
and electricity for heating denies them the protections of programs
designed by the legislature to protect low income utility customers from
abuse, such as the Home Energy Fair Practices Act (HEFPA), and the
legislatively-created safety nets for the needy including the emergency
utility assistance program under Social Services Law § 131-s and the
energy crisis provisions of the home energy assistance program under
Social Services Law § 97 (HEAP).  Customer remedies and assistance in
these programs are triggered by a notice of termination of utility
service, and is not available when surcharges for heating costs are
deemed to be "added rent," allowing landlords to evict tenants for
nonpayment. Tenants who encounter temporary difficulty in meeting their
obligations to pay for fluctuating charges heat-related utility service
are in a far worse position than direct utility company over unpaid or
disputed charges; they are given the opportunity to pay arrears over
time in affordable installments through deferred payment plans, which
must be offered as an alternative to termination of utility service, and
they have the opportunity to obtain emergency HEAP or Social Services
Law section 131-s assistance. Such assistance is not available when the
landlord imposes a rent surcharge for a utility service it provides
through its own meters or for the cost of utility service which the
landlord uses to heat the premises and allocates based on square footage
or other factors.

 
PRIOR LEGISLATIVE HISTORY:

A.739 of 2011-12;

A.7354-A of 2009-10,

A2329 2015/16;

A660 2017-referred to Housing

 
FISCAL IMPLICATIONS:

None anticipated

 
EFFECTIVE DATE:
Immediately