S T A T E O F N E W Y O R K
________________________________________________________________________
8011
I N S E N A T E
January 5, 2024
___________
Introduced by Sen. KAVANAGH -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
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 emergency tenant protection act
of nineteen seventy-four, in relation to exemptions from rent stabili-
zation on the basis of substantial rehabilitation; to define clearly
the scope of the fraud exception to the pre-HSTPA four-year rule for
calculating rents; and to amend part B of a chapter of the laws of
2023 relating to defining clearly the scope of the fraud exception to
the pre-HSTPA four-year rule for calculating rents, as proposed in
legislative bills numbers S. 2980-C and A. 6216-B, in relation to
claims of fraudulent schemes and determination relating thereto and in
relation to the effectiveness thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraph (d) of paragraph 15 of subdivision c of
section 26-511 of the administrative code of the city of New York, as
added by part A of a chapter of the laws of 2023 amending the adminis-
trative code of the city of New York and the emergency tenant protection
act of nineteen seventy-four relating to establishing the legal regu-
lated rent for the combination of two or more vacant apartments, as
proposed in legislative bills numbers S. 2980-C and A. 6216-B, is
amended to read as follows:
(d) where the vacant housing accommodations are combined, modified,
divided or the dimension of such housing accommodation otherwise altered
and these changes are being made pursuant to a preservation regulatory
agreement with a federal, state or local governmental agency or instru-
mentality, the rent stabilized rents charged thereafter shall be based
on an initial rent set by such agency or instrumentality[, provided such
initial rent shall not be higher than if the initial rent was calculated
in accordance with subparagraphs (a), (b), (e) or (f) of this para-
graph].
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07250-13-4
S. 8011 2
§ 2. Subparagraph (iv) of paragraph 13 of 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, as added by
part A of a chapter of the laws of 2023 amending the administrative code
of the city of New York and the emergency tenant protection act of nine-
teen seventy-four relating to establishing the legal regulated rent for
the combination of two or more vacant apartments, as proposed in legis-
lative bills numbers S. 2980-C and A. 6216-B, is amended to read as
follows:
(iv) where the vacant housing accommodations are combined, modified,
divided or the dimension of such housing accommodation otherwise altered
and these changes are being made pursuant to a preservation regulatory
agreement with a federal, state or local governmental agency or instru-
mentality, the rent stabilized rents charged thereafter shall be based
on an initial rent set by such agency or instrumentality[, provided such
initial rent shall not be higher than if the initial rent was calculated
in accordance with subparagraphs (i), (ii), (v) or (vi) of this para-
graph].
§ 3. 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, as amended by part A of a chapter of the
laws of 2023 amending the administrative code of the city of New York
and the emergency tenant protection act of nineteen seventy-four relat-
ing to establishing the legal regulated rent for the combination of two
or more vacant apartments, as proposed in legislative bills numbers S.
2980-C and A. 6216-B, 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 A substantial rehabilitation,
WHERE THE WORK FOR SUCH REHABILITATION WAS INITIATED ON OR AFTER THE
FIRST DAY OF JANUARY, TWO THOUSAND TWENTY-FOUR, shall seek approval from
state division of housing and community renewal within 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:
(a) the owner or its predecessors in interest have engaged in harass-
ment of tenants in the five years preceding the completion of the
substantial rehabilitation;
(b) the building was not in a substandard or seriously deteriorated
condition requiring substantial rehabilitation; OR
(C) ANY ADDITIONAL GROUNDS AS SET FORTH BY REGULATION;
§ 4. Section 2 of part B of a chapter of the laws of 2023 relating to
defining clearly the scope of the fraud exception to the pre-HSTPA four-
year rule for calculating rents, as proposed in legislative bills
numbers S. 2980-C and A. 6216-B, is amended, and a new section 2-a is
added to read as follows:
§ 2. [(a)] Nothing in this act, or the HSTPA, or prior law, shall be
construed as restricting, impeding or diminishing the use of records of
any age or type, going back to any date that may be relevant, for
purposes of determining the status of any apartment under the rent
stabilization law[;
S. 8011 3
(b) With respect to the calculation of legal rents for the period
either prior to or subsequent to June 14, 2019, an owner shall be deemed
to have committed fraud if the owner shall have committed a material
breach of any duty, arising under statutory, administrative or common
law, to disclose truthfully to any tenant, government agency or judicial
or administrative tribunal, the rent, regulatory status, or lease infor-
mation, for purposes of claiming an unlawful rent or claiming to have
deregulated an apartment, whether or not the owner's conduct would be
considered fraud under the common law, and whether or not a complaining
tenant specifically relied on untruthful or misleading statements in
registrations, leases, or other documents. The following conduct shall
be presumed to have been the product of such fraud: (1) the unlawful
deregulation of any apartment, including such deregulation as results
from claiming an unlawful increase such as would have brought the rent
over the deregulation threshold that existed under prior law, unless the
landlord can prove good faith reliance on a directive or ruling by an
administrative agency or court; or (2) beginning October 1, 2011, fail-
ing to register, as rent stabilized, any apartment in a building receiv-
ing J-51 or 421-a benefits.] OR FOR SUCH OTHER PURPOSES PERMITTED UNDER
LAW OR THE REGULATIONS OF THE NEW YORK STATE DIVISION OF HOUSING AND
COMMUNITY RENEWAL.
§ 2-A. WHEN A COLORABLE CLAIM THAT AN OWNER HAS ENGAGED IN A FRAUDU-
LENT SCHEME TO DEREGULATE A UNIT IS PROPERLY RAISED AS PART OF A
PROCEEDING BEFORE A COURT OF COMPETENT JURISDICTION OR THE STATE DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL, A COURT OF COMPETENT JURISDICTION
OR THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL ISSUE A
DETERMINATION AS TO WHETHER THE OWNER KNOWINGLY ENGAGED IN SUCH FRAUDU-
LENT SCHEME AFTER A CONSIDERATION OF THE TOTALITY OF THE CIRCUMSTANCES.
IN MAKING SUCH DETERMINATION, THE COURT OR THE DIVISION SHALL CONSIDER
ALL OF THE RELEVANT FACTS AND ALL APPLICABLE STATUTORY AND REGULATORY
LAW AND CONTROLLING AUTHORITIES, PROVIDED THAT THERE NEED NOT BE A FIND-
ING THAT ALL OF THE ELEMENTS OF COMMON LAW FRAUD, INCLUDING EVIDENCE OF
A MISREPRESENTATION OF MATERIAL FACT, FALSITY, SCIENTER, RELIANCE AND
INJURY, WERE SATISFIED IN ORDER TO MAKE A DETERMINATION THAT A FRAUDU-
LENT SCHEME TO DEREGULATE A UNIT WAS COMMITTED IF THE TOTALITY OF THE
CIRCUMSTANCES NONETHELESS INDICATE THAT SUCH FRAUDULENT SCHEME TO DEREG-
ULATE A UNIT WAS COMMITTED.
§ 5. Section 3 of part B of a chapter of the laws of 2023 relating to
defining clearly the scope of the fraud exception to the pre-HSTPA four-
year rule for calculating rents, as proposed in legislative bills
numbers S. 2980-C and A. 6216-B, is amended to read as follows:
§ 3. This act shall take effect immediately AND SHALL APPLY TO ANY
ACTION OR PROCEEDING IN ANY COURT OR ANY APPLICATION, COMPLAINT OR
PROCEEDING BEFORE AN ADMINISTRATIVE AGENCY ON THE EFFECTIVE DATE OF THIS
ACT.
§ 6. This act shall take effect immediately; provided, however that
sections one, two, and three of this act shall take effect on the same
date and in the same manner as part A of a chapter of the laws of 2023
amending the administrative code of the city of New York and the emer-
gency tenant protection act of nineteen seventy-four relating to estab-
lishing the legal regulated rent for the combination of two or more
vacant apartments, as proposed in legislative bills numbers S. 2980-C
and A. 6216-B, takes effect; and provided further, however, that
sections four and five of this act shall take effect on the same date
and in the same manner as part B of a chapter of the laws of 2023 relat-
ing to defining clearly the scope of the fraud exception to the
S. 8011 4
pre-HSTPA four-year rule for calculating rents, as proposed in legisla-
tive bills numbers S. 2980-C and A. 6216-B, takes effect; and provided
further, however, that the amendments to section 26-511 of chapter 4 of
title 26 of the administrative code of the city of New York made by
section one of this act shall expire on the same date as such law
expires and shall not affect the expiration of such law provided under
section 26-520 of such law.
