§ 778. Appointment of administrator. 1. The court is authorized and
empowered, in implementation of a judgment rendered pursuant to section
seven hundred seventy-six or seven hundred seventy-seven of this
article, to appoint a person other than the owner, a mortgagee or
lienor, to receive and administer the rent moneys or security deposited
with such owner, mortgagee or lienor, subject to the court's direction.
The court may appoint the commissioner of the department of the city of
New York charged with enforcement of the housing maintenance code of
such city or the commissioner's designee as such administrator, provided
that the commissioner or the commissioner's designee shall consent, in
writing, to such appointment. Any administrator is authorized and
empowered in accordance with the direction of the court, to order the
necessary materials, labor and services to remove or remedy the
conditions specified in the judgment, and to make disbursements in
payment thereof; and to demand, collect and receive the rents from the
tenants; and to institute all necessary legal proceedings including, but
not limited to, summary proceedings for the removal of any tenant or
tenants; and to rent or lease for terms not exceeding three years any
part of said premises, however, the court may direct the administrator
to rent or lease commercial parts of said premises for terms that the
court may approve. In addition, such administrator is authorized and
empowered in accordance with the direction of the court to accept and
repay such moneys as may be received from the department charged with
enforcement of the housing maintenance code of the city of New York for
the purpose of managing the premises, replacing or substantially
rehabilitating systems or making other repairs or capital improvements
authorized by the court. All moneys expended by the department pursuant
to the foregoing shall constitute a debt recoverable from the owner and
a lien upon the building and lot, and upon the rents and other income
thereof. Such lien shall be enforced in accordance with the provisions
of article eight of subchapter five of the housing maintenance code of
the city of New York. Such administrator, shall, upon completion of the
work prescribed in such judgment, file with the court a full accounting
of all receipts and expenditures for such work. Such administrator shall
dispose of the rents and other monies deposited with such administrator
according to the following order of priority:

(a) Payment in full for all of the work specified in the judgment.
Until all of the work specified in the judgment has been completed and
payment for such work has been made, no other disbursements shall be
permitted, except for fuel bills, fire and liability insurance, and
bills for ordinary repairs and maintenance.

(b) Payment of a reasonable amount for the services of such
administrator, including reimbursement of any legal fees incurred by
such administrator in connection with management of the building.

(c) Payment of outstanding real property tax liens claimed by the city
of New York.

(d) Payment of outstanding emergency repair liens filed and recorded
by the city of New York and outstanding liens filed and recorded by the
city pursuant to this section.

(e) Payment to the owner of any surplus remaining after payments of
paragraphs (a) through (d) of this subdivision have been made.

2. Unless the administrator is the city of New York, the court may
allow from the rent moneys or security on deposit a reasonable amount
for services of such administrator.

3. Unless such administrator is the city of New York, the
administrator so appointed shall furnish a bond, the amount and form of
which shall be approved by the court. In its discretion and for good
cause shown, the court may dispense with the necessity for a bond. The
cost of a required bond shall be paid from the moneys so deposited.

4. Such administrator shall file a transcript of the judgment
appointing him with the county clerk within fifteen days of his
appointment.

5. The duties of such administrator shall not be affected by the
appointment of a receiver in an action to foreclose a mortgage on the
premises, except that the rights of the owner, including the right to
any surplus, pursuant to paragraph (e) of subdivision one of this
section, shall pass to the receiver. The court in which the action to
foreclose a mortgage on the premises is pending may appoint such
administrator to serve as receiver in that action in addition to his
duties as administrator pursuant to this article.

6. Such administrator shall be liable only in his or her official
capacity for injury to persons and property by reason of conditions of
the premises in a case where an owner would have been liable; he or she
shall not have any liability in his or her personal capacity.
Appointment of an administrator pursuant to subdivision one of this
section shall not relieve an owner of liability for injury to persons
and property in such case.

7. No city or county specified in section seven hundred sixty-nine of
this article shall be liable to any party, including such administrator
or the owner, for injury to persons or property by reason of conditions
of the premises or the acts or omissions of such administrator, except
that when the city of New York is appointed administrator, liability
shall be determined in accordance with subdivision six of this section.

8. The commissioner of the department of the city of New York charged
with the enforcement of the housing maintenance code of such city shall
promulgate rules and regulations regarding criteria for the selection of
administrators to be appointed pursuant to this section and shall
establish and maintain a list of persons approved by such department.
Unless the administrator is the city of New York, any person appointed
as an administrator within such city shall be selected from among the
persons approved as administrators pursuant to such list.

9. Such administrator shall, within thirty days of appointment, file
with the court a plan for the provision of essential services and for
the correction of such other hazardous conditions as may exist at the
premises, specifying dates by which such services shall be provided and
such conditions corrected. If such administrator cannot provide such
services and correct such conditions by the dates specified in the plan,
he shall be required to file with the court an amendment to the plan
setting forth the reasons why such services and corrections could not be
provided by such date and specifying new dates for such services and
corrections. Such plan and any amendments to such plan shall be provided
to the tenants by mail or by posting in a common area of the building
and to the owner of record by mail.

* 10. (a) Where a building for which an administrator has been
appointed pursuant to this section is transferred to a new owner at any
time following the appointment of such administrator, whether or not
such building remains subject to such administrator, the department
charged with enforcement of the housing maintenance code of the city of
New York may enter into a regulatory agreement with such new owner. Such
regulatory agreement may impose such terms and conditions upon the
operation and repair of such building as such department may determine.
Notwithstanding any general, special or local law to the contrary, such
regulatory agreement may provide that, upon transfer of such building to
the new owner, any outstanding liens filed with and recorded by the city
pursuant to this section or pursuant to section three hundred nine of
the multiple dwelling law shall immediately be reduced to zero, provided
that such regulatory agreement shall require, in consideration for such
reduction to zero, the provision of adequate, safe and sanitary housing
accommodations for persons of low income for a period of not less than
thirty years. Any regulatory agreement pursuant to this subdivision
shall include a certification by the new owner of the real property that
(i) the prior owner has no direct or indirect interest in such real
property, and (ii) the prior owner has no direct or indirect interest in
such new owner.

(b) On or about June thirtieth, two thousand nine and for every three
years thereafter for as long as the program continues to be in effect,
the city shall submit a report to the governor, the temporary president
of the senate, the speaker of the assembly, the minority leader of the
senate and the minority leader of the assembly. Each report following
the initial report shall describe the program activities carried out
during the three prior calendar years pursuant to this subdivision.

* NB Repealed June 30, 2024

11. The court may only discharge an administrator if the owner has
paid in full or entered into a payment agreement to pay in full all
outstanding real property tax liens claimed by the city of New York, all
outstanding emergency repair liens filed and recorded by the city of New
York, all outstanding charges and liens assessed in connection to the
alternative enforcement program authorized by section 27-2153 of the
administrative code of the city of New York, and outstanding liens filed
and recorded by the city pursuant to this section. The provisions of
this subdivision shall not apply to buildings transferred pursuant to
subdivision ten of this section.