Bill Text: NY S03373 | 2017-2018 | General Assembly | Introduced
Bill Title: Creates the New York City department of housing preservation and development homeowners improvement trust fund and the HPD homeowner standard warranty.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Engrossed - Dead) 2018-06-18 - referred to housing [S03373 Detail]
Download: New_York-2017-S03373-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3373 2017-2018 Regular Sessions IN SENATE January 23, 2017 ___________ Introduced by Sen. SANDERS -- 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 private housing finance law, in relation to creating the New York City department of housing preservation and development homeowners improvement trust fund and the HPD homeowner standard warranty The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The private housing finance law is amended by adding a new 2 article 28 to read as follows: 3 ARTICLE XXVIII 4 NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND 5 DEVELOPMENT HOMEOWNERS IMPROVEMENT TRUST FUND 6 Section 1233. Definitions. 7 1234. New York City department of housing preservation and 8 development homeowners improvement trust fund. 9 1235. Written warranty; contents. 10 1236. Powers of the commissioner. 11 1237. Resolution of disputes regarding HPD projects. 12 1238. Penalties for violation of this article. 13 § 1233. Definitions. For the purposes of this article the following 14 terms shall have the following meanings: 15 1. "Business entity" means a corporation, association, partnership, 16 limited liability company, limited liability partnership, or other legal 17 entity. 18 2. "Delivered condition" means the physical condition of the home 19 after delivery and installation at the home site has been completed. 20 3. "Department" means the New York State Community Homes & Renewal 21 program. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01173-01-7S. 3373 2 1 4. "Fund" means the New York City department of housing preservation 2 and development homeowners improvement trust fund created pursuant to 3 the provisions of section twelve hundred thirty-four of this article. 4 5. "Sponsor" means any person or business entity, including, but not 5 limited to, a sponsor, developer, mortgagor, applicant, or general 6 contractor as defined in section 1-16, 29-01, 30-01, 34-01, and 35-01 of 7 title twenty-eight of the rules of the city of New York who develops a 8 home through an HPD project for sale to a buyer. 9 6. "HPD project" means any construction of rehabilitation of any resi- 10 dential dwelling, in whole or in part, through the programs set forth in 11 chapters twenty-nine, thirty, thirty-four and thirty-five of title twen- 12 ty-eight of the rules of the city of New York. 13 7. "Commissioner" means the commissioner of the New York State Commu- 14 nity Homes & Renewal. 15 8. "Service" means the construction, rehabilitation, modification, 16 alteration, or repair of an HPD project. 17 9. "State administrative agency" or "SAA" means the New York State 18 Community Homes & Renewal. 19 10. "Building code" means the uniform fire prevention and building 20 code promulgated under section three hundred seventy-seven of the execu- 21 tive law, local building code standards approved by the uniform fire 22 prevention and building code council under section three hundred seven- 23 ty-nine of the executive law, and the building code of the city of New 24 York, as defined in title twenty-seven of the administrative code of the 25 city of New York. 26 11. "Constructed in a skillful manner" means that workmanship and 27 materials meet or exceed the specific standards of the applicable build- 28 ing code. When the applicable building code does not provide a relevant 29 specific standard, such term means that workmanship and materials meet 30 or exceed the standards of locally accepted building practices. 31 12. "Material defect" means actual physical damage to the following 32 load-bearing portions of the home caused by failure of such load-bearing 33 portions which affects their load-bearing functions to the extent that 34 the home becomes unsafe, unsanitary or otherwise unliveable: foundation 35 systems and footings, beams, girders, lintels, columns, walls and parti- 36 tions, floor systems, and roof framing systems. 37 13. "New home" or "home" means any single family house or for-sale 38 unit in a multi-unit residential structure constructed or rehabilitated 39 through an HPD project in which title to the individual units is trans- 40 ferred to owners under a condominium, cooperative, or individual owner- 41 ship regime. Such terms do not include dwellings constructed solely for 42 lease. 43 14. "Owner" means the first person to whom the home is sold and, 44 during the unexpired portion of the warranty period, each successor in 45 title to the home and any mortgagee in possession. Owner does not 46 include the builder of the home or any firm under common control of the 47 builder. 48 15. "Plumbing, electrical, heating, cooling and ventilation systems" 49 shall mean: 50 a. in the case of plumbing systems: gas supply lines and fittings; 51 water supply, waste and vent pipes and their fittings; septic tanks and 52 their drain fields; water, gas and sewer service piping, and their 53 extensions to the tie-in of a public utility connection, or on-site well 54 and sewage disposal system;S. 3373 3 1 b. in the case of electrical systems: all wiring, electrical boxes, 2 switches, outlets and connections up to the public utility connection; 3 and 4 c. in the case of heating, cooling and ventilation systems: all duct 5 work, steam, water and refrigerant lines, registers, convectors, radi- 6 ation elements and dampers. 7 16. "Warranty date" means the date of the passing of title to the 8 first owner for occupancy by such owner or such owner's family as a 9 residence, or the date of first occupancy of the home as a residence, 10 whichever first occurs. 11 17. "HPD owner warranty" means the warranty required to be provided to 12 each owner of a home. 13 § 1234. New York City department of housing preservation and develop- 14 ment homeowners improvement trust fund. 1. A New York City department of 15 housing preservation and development homeowners improvement trust fund 16 (hereinafter, "the fund") is hereby established to provide for the 17 payment of approved repairs to aggrieved homeowners who are victims of 18 substandard housing built by a sponsor on an HPD project. The fund shall 19 be administered by the commissioner of New York State Community Homes & 20 Renewal. 21 2. a. A sponsor of an HPD project shall be required to participate in 22 the fund unless a sponsor provides a bond or otherwise meets the warran- 23 ties set forth in section twelve hundred thirty-five of this article. 24 b. Any sponsor who is granted or receives the right to develop an HPD 25 project must participate in the fund by submitting to the commissioner a 26 check in the amount of not less than five percent of the total value of 27 the HPD project before an HPD project may be awarded to a sponsor. 28 c. The commissioner may, from time to time, amend this section to 29 require such additional contributions by participants in the fund as the 30 commissioner determines to be necessary to maintain an amount in the 31 fund which is adequate to fulfill its purposes and to counteract 32 depletion of the fund resulting from payments made out of the fund 33 pursuant to subdivision three of this section. 34 d. Fund participants may discontinue their participation in the fund 35 at any time by filing a bond in accordance with regulations promulgated 36 by the commissioner and in effect. 37 e. The funds will be returned to the sponsor as follows: (1) fifty 38 percent returned after thirty months after completion of the project so 39 long as there are no unresolved warranty issues; and (2) fifty percent 40 returned after sixty months after completion of the project so long as 41 there are no unresolved warranty issues. Under no circumstances shall 42 funds be returned if there are any outstanding unresolved warranty 43 issues. 44 f. Participation in the fund does not relieve a sponsor of any obli- 45 gation to pay awards or fines imposed by the department or judgments or 46 arbitration awards rendered against a sponsor by a court of competent 47 jurisdiction. 48 3. a. The commissioner may require that disbursements be made from the 49 fund to pay outstanding awards to an owner, on behalf of an owner when: 50 (1) the department has conducted an administrative hearing that 51 results in a decision that a sponsor is in violation of a law, ordinance 52 or regulation enforced by the department or the HPD owner warranty; 53 (2) the sponsor is ordered by the department to pay an award to an 54 owner; 55 (3) the sponsor has failed to pay such award to an owner within thirty 56 days of the date of the department's order; andS. 3373 4 1 (4) the sponsor has conducted an administrative hearing that results 2 in a decision that a sponsor has not remedied material defects in 3 construction or rehabilitation of an HPD project and is in violation of 4 the HPD owner warranty. 5 b. Disbursements from the fund will be made at the discretion of the 6 commissioner or his or her designee. 7 c. The commissioner or his or her designee may order that partial 8 payment of awards be made from the fund. 9 d. Nothing contained in this subdivision shall be construed to: 10 (1) limit the rights and remedies of any party, including the depart- 11 ment, to pursue a cause of action against a sponsor who is a participant 12 in the fund; 13 (2) create a right of any person to a portion of any of the fund, 14 except in the case of an award duly made by the commissioner pursuant to 15 the provisions herein; or 16 (3) provide for the payment of awards or judgments rendered against 17 fund participants in personal injury actions. 18 4. The commissioner shall, by January thirty-first of each year, cause 19 an accounting to be made of all of the fund's activities during the 20 preceding calendar year. 21 § 1235. Written warranty; contents. 1. The HPD owner warranty shall be 22 provided to the owner that accords with the provisions of article thir- 23 ty-six-B of the general business law, including the following: 24 a. One year from and after the warranty date the home will be free 25 from defects due to a failure to have been constructed in a skillful 26 manner; 27 b. Two years from and after the warranty date the plumbing, elec- 28 trical, heating, cooling and ventilation systems of the home will be 29 free from defects due to a failure by the builder to have installed such 30 systems in a skillful manner; and 31 c. Six years from and after the warranty date the home will be free 32 from material defects, including, but not limited to, any construction 33 that is not in compliance with the building code or the zoning resol- 34 ution of the city of New York. 35 2. a. The sponsor shall take appropriate corrective action within 36 sixty days of receipt of written notification at the site of the home in 37 instances of substantial defects in materials or workmanship, which 38 become evident within one year from the date of the delivery of the home 39 to the owner, provided the owner or his transferee gives written notice 40 of such defects to the sponsor at their business address not later than 41 one year and ten days after date of delivery. 42 b. The sponsor will, as a minimum remedy, make repairs or indemnify 43 the owner for the actual cost of repairing any rust damage covered by 44 the warranty. 45 c. The sponsor will honor all valid claims under the warranty regard- 46 less of their number. 47 d. Nothing contained in this section shall be deemed to preclude a 48 sponsor from entering into a contract requiring a financially solvent 49 contractor who worked on the home to be initially responsible for the 50 cost of any corrective action as a result of the negligence of the 51 contractor. 52 3. a. The warranty under this article shall be in addition to and not 53 in derogation of all other rights and privileges which such owner may 54 have under any other law or instrument. Waiver of any rights by the 55 owner under this article shall be deemed contrary to public policy and 56 shall be unenforceable and void.S. 3373 5 1 b. The provisions of this article shall preempt any local law incon- 2 sistent with the provisions of this article. This article shall not 3 preempt any builder subject to its provisions from complying with any 4 local law with respect to the regulation of sponsors except as expressly 5 provided herein. 6 c. Nothing in this article shall be construed to repeal, invalidate, 7 supersede or restrict any right, liability or remedy provided by any 8 other statute of the state, except where such construction would, as a 9 matter of law, be unreasonable. 10 § 1236. Powers of the commissioner. The commissioner shall have the 11 following powers and duties with respect to HPD projects: 12 1. To create and maintain a registry accessible to the public which 13 shall include, but not be limited to the following information: 14 a. a listing of all pre-approved, pre-qualified, or approved sponsors 15 for HPD projects and all sponsors awarded HPD projects; and 16 b. records of all violations issued, disciplinary action taken and 17 penalties paid and levied pursuant to this article; 18 2. To retain records and all application materials submitted to it; 19 3. To receive complaints, conduct investigations and establish proce- 20 dures for the resolution of disputes relating to the construction of HPD 21 projects and to resolve such complaints and disputes pursuant to section 22 twelve hundred thirty-four of this article; 23 4. To promulgate rules and regulations relating to the provisions of 24 this article; 25 5. To conduct adjudicatory hearings, pursuant to the state administra- 26 tive procedure act to resolve violations of this article and the rules 27 and regulations promulgated thereunder; 28 6. To seek injunctive relief in the supreme court in the county where 29 the complainant resides; and 30 7. To promulgate rules and regulations to require bonding, minimum 31 capital requirements or other reasonable methods to ensure that sponsors 32 are financially responsible to fully comply with this article and have 33 the financial resources to meet their warranty, contractual and other 34 obligations required under this section. In connection therewith, the 35 commissioner may require the posting of surety bonds to ensure the 36 satisfactory completion of HPD projects. 37 § 1237. Resolution of disputes regarding HPD projects. 1. Any owner 38 may file a complaint with the commissioner as a state administrative 39 agency seeking resolution of an allegation that a substantial defect 40 exists in the delivered condition, installation, service or construction 41 of an HPD project. The commissioner shall promulgate forms for such 42 complaints and such forms shall also be available on the department's 43 web-site. For the purpose of this article, a substantial defect shall be 44 a defect or a number of defects or other conditions which collectively 45 can reasonably be expected to cost one thousand dollars or more to cure. 46 2. Complaints filed with the commissioner relating to the delivered 47 condition or construction of an HPD project shall be made within one 48 year and ten days after the date of the delivery of title, or of a 49 certificate of occupancy, or the expiration of any applicable provision 50 of a contract or warranty, whichever is later. 51 3. a. Upon the department's determination that a complaint, on its 52 face, alleges a substantial defect in the delivered condition or 53 construction of an HPD project, the department shall notify the owner 54 and sponsor. 55 b. Initially, the department may attempt to informally resolve the 56 complaint. If informal resolution of the complaint is unsuccessful, theS. 3373 6 1 department shall resolve such complaints and disputes by administrative 2 hearing, pursuant to the state administrative procedure act. 3 c. The decision shall provide compensation to the aggrieved party in 4 an amount which shall include, but not be limited to: 5 (1) Filing and recording fees, inspection fees and other required 6 costs that the aggrieved party would not have incurred had the home met 7 applicable standards; and 8 (2) The cost of conforming repairs or replacements. 9 d. The department may apportion liability between two or more parties 10 or business entities where appropriate. 11 e. The decision resolving the complaint shall be in writing and shall 12 provide the reason therefor, a copy of the decision shall be provided to 13 all interested parties, including the sponsor and owner. 14 f. Any party may seek judicial review of the administrative determi- 15 nation pursuant to article seventy-eight of the civil practice law and 16 rules. 17 § 1238. Penalties for violation of this article. Any person or busi- 18 ness entity found guilty, after a hearing, of a violation of this arti- 19 cle, may be required to pay a civil penalty of not more than ten thou- 20 sand dollars for each such violation, but not more than fifty thousand 21 dollars for more than one violation relating to each HPD project. Such 22 fine shall be collected and deposited in the fund. 23 § 2. This act shall take effect on the first of January next succeed- 24 ing the date upon which it shall have become a law.
