Bill Text: NY S07213 | 2021-2022 | General Assembly | Amended


Bill Title: Relates to rent regulations and to the application of the Housing Stability and Tenant Protection Act of 2019; establishes the legal regulated rent for the combination of two or more vacant apartments; defines permanently vacated; relates to exemptions from rent stabilization on the basis of substantial rehabilitation; relates to public hearings by the city rent agency (Part A); relates to major capital improvements (Part B); relates to rent impairing violations; relates to eviction proceedings (Part C); applies the Housing Stability and Tenant Protection Act of 2019 to rent calculations and rent records maintenance and destruction (Part D).

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2022-01-05 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S07213 Detail]

Download: New_York-2021-S07213-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         7213--A

                               2021-2022 Regular Sessions

                    IN SENATE

                                      June 7, 2021
                                       ___________

        Introduced  by Sens. KAVANAGH, RIVERA -- read twice and ordered printed,
          and when printed to be committed to the Committee on Rules --  commit-
          tee  discharged, bill amended, ordered reprinted as amended and recom-
          mitted to said committee

        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:

     1    Section 1. This act enacts into law components of legislation relating
     2  to  rent  regulation  and  tenant  protection.  Each component is wholly
     3  contained within a Part identified as Parts A through D.  The  effective
     4  date  for  each  particular  provision contained within such Part is set
     5  forth in the last section of such Part. Any  provision  in  any  section
     6  contained within a Part, including the effective date of the Part, which

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11064-05-1

        S. 7213--A                          2

     1  makes reference to a section "of this act", when used in connection with
     2  that  particular  component,  shall  be  deemed to mean and refer to the
     3  corresponding section of the Part in which it is found. Section three of
     4  this act sets forth the general effective date of this act.

     5                                   PART A

     6    Section  1.  Paragraph  9  of  subdivision  a of section 26-405 of the
     7  administrative code of the city of New York is REPEALED.
     8    § 2. Subdivision c of section 26-511 of the administrative code of the
     9  city of New York is amended by adding a new  paragraph  15  to  read  as
    10  follows:
    11    (15)  where  an  owner combines two or more vacant apartments formerly
    12  subject to this section, the legal regulated rent for the combined  unit
    13  may  not  exceed  the  sum  of the rents of the formerly separate units.
    14  Where an owner reduces the dimensions of  a  rent  stabilized  unit,  or
    15  combines  part of that unit with a neighboring unit, the legal regulated
    16  rent for the reduced unit shall be the prior rent, reduced in proportion
    17  to the reduction in floor area; the rent for  any  expanded  neighboring
    18  unit may not exceed the former rent for that unit.
    19    §  3.  The  opening  paragraph  of  paragraph  (a) of subdivision 4 of
    20  section 14 of the public housing law, as added by  chapter  116  of  the
    21  laws of 1997, is amended to read as follows:
    22    that  unless otherwise prohibited by occupancy restrictions based upon
    23  income limitations pursuant to federal, state or local law,  regulations
    24  or  other  requirements  of  governmental  agencies,  any  member of the
    25  tenant's family, as defined in paragraph (c) of this subdivision,  shall
    26  succeed  to  the  rights  of a tenant under such acts and laws where the
    27  tenant has permanently vacated the housing accommodation and such family
    28  member has resided with the tenant in the  housing  accommodation  as  a
    29  primary  residence for a period of no less than two years, or where such
    30  person is a "senior citizen" or a "disabled person," as defined in para-
    31  graph (c) of this subdivision, for a period of no less  than  one  year,
    32  immediately prior to the permanent vacating of the housing accommodation
    33  by  the  tenant, or from the inception of the tenancy or commencement of
    34  the relationship, if for less than such periods.   For the  purposes  of
    35  this  paragraph,  "permanently  vacated"  shall  mean  the date when the
    36  tenant of record physically moves out of the housing  accommodation  and
    37  permanently  ceases  to use it as their primary residence, regardless of
    38  subsequent contacts with the unit or the signing of  lease  renewals  or
    39  continuation of rent payments. The minimum periods of required residency
    40  set  forth  in this subdivision shall not be deemed to be interrupted by
    41  any period  during  which  the  "family  member"  temporarily  relocates
    42  because he or she:
    43    § 4. Paragraph 5 of subdivision a of section 5 of section 4 of chapter
    44  576 of the laws of 1974 constituting the emergency tenant protection act
    45  of nineteen seventy-four, is amended to read as follows:
    46    (5)   housing  accommodations  in  buildings  completed  or  buildings
    47  substantially rehabilitated as family units on or after  January  first,
    48  nineteen hundred seventy-four; provided that an owner claiming exemption
    49  from rent stabilization on the basis of substantial rehabilitation shall
    50  seek approval from state division of housing and community renewal with-
    51  in  one year of the completion of the substantial rehabilitation, or for
    52  any building previously alleged to have been substantially rehabilitated
    53  before the effective date of the chapter of the  laws  of  two  thousand
    54  twenty-one that amended this paragraph, within six months of such effec-

        S. 7213--A                          3

     1  tive date, and ultimately obtain such approval, which shall be denied on
     2  the following grounds:
     3    (a)  the owner or its predecessors in interest have engaged in harass-
     4  ment of tenants in the  five  years  preceding  the  completion  of  the
     5  substantial rehabilitation;
     6    (b) the building was not in a seriously deteriorated condition requir-
     7  ing substantial rehabilitation;
     8    (c) the owner's or its predecessors in interest's acts or omissions in
     9  failing to maintain the building materially contributed to the seriously
    10  deteriorated condition of the premises; or
    11    (d)  the  substantial rehabilitation work was performed in a piecemeal
    12  fashion and was not completed in a reasonable  amount  of  time,  during
    13  which period the building was at least eighty percent vacant;
    14    §  5.  This  act  shall take effect immediately and shall apply to all
    15  pending proceedings on and after such date; provided that the amendments
    16  to section 26-511 of chapter 4 of title 26 of the administrative code of
    17  the city of New York made by section two of this act shall expire on the
    18  same date as such law expires and shall not  affect  the  expiration  of
    19  such law as provided under section 26-520 of such law.

    20                                   PART B

    21    Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
    22  26-405 of the administrative code of the city of New York, as amended by
    23  section  27  of  part Q of chapter 39 of the laws of 2019, is amended to
    24  read as follows:
    25    (g) There has been since July first, nineteen hundred seventy, a major
    26  capital improvement essential for the  preservation  energy  efficiency,
    27  functionality,  or infrastructure of the entire building, improvement of
    28  the structure including heating, windows, plumbing and roofing but shall
    29  not be for operational costs or unnecessary cosmetic  improvements.  The
    30  temporary  increase  based  upon  a major capital improvement under this
    31  subparagraph for any order of the commissioner issued after  the  effec-
    32  tive  date  of  the  chapter  of  the laws of two thousand nineteen that
    33  amended this subparagraph shall be in an amount sufficient  to  amortize
    34  the  cost  of  the improvements pursuant to this subparagraph (g) over a
    35  twelve-year period for buildings with thirty-five or fewer  units  or  a
    36  twelve and one-half year period for buildings with more than thirty-five
    37  units,  and  shall be removed from the legal regulated rent thirty years
    38  from the date the increase became effective inclusive of  any  increases
    39  granted by the applicable rent guidelines board. Temporary major capital
    40  improvement  increases  shall  be collectible prospectively on the first
    41  day of the first month beginning sixty days from  the  date  of  mailing
    42  notice  of  approval to the tenant. Such notice shall disclose the total
    43  monthly increase in rent and the first month in which the  tenant  would
    44  be  required  to pay the temporary increase. An approval for a temporary
    45  major  capital  improvement  increase  shall  not  include   retroactive
    46  payments. The collection of any increase shall not exceed two percent in
    47  any year from the effective date of the order granting the increase over
    48  the  rent  set forth in the schedule of gross rents, with collectability
    49  of any dollar excess above said sum to  be  spread  forward  in  similar
    50  increments  and added to the rent as established or set in future years.
    51  Upon vacancy, the landlord may add any remaining balance of  the  tempo-
    52  rary  major  capital  improvement  increase to the legal regulated rent.
    53  Notwithstanding any other provision of the law, for  any  renewal  lease
    54  commencing  on  or  after  June  14,  2019,  the  collection of any rent

        S. 7213--A                          4

     1  increases due to any major capital improvements  approved  on  or  after
     2  June  16,  2012 and before June 16, 2019 shall not exceed two percent in
     3  any year for any tenant in occupancy  on  the  date  the  major  capital
     4  improvement  was  approved[,];  provided,  however, no application for a
     5  major capital improvement rent increase shall be approved by  the  divi-
     6  sion  of  housing and community renewal unless the owner of the property
     7  has filed all copies of permits pertaining to the major capital improve-
     8  ment work with such application.  Any application submitted with fraudu-
     9  lent permits or without required permits shall be denied; or
    10    § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
    11  tive code of the city of New York, as separately amended by  section  12
    12  of  part  K  of chapter 36 and section 28 of part Q of chapter 39 of the
    13  laws of 2019, is amended to read as follows:
    14    (6) provides criteria whereby the commissioner may act  upon  applica-
    15  tions  by  owners  for  increases  in  excess  of the level of fair rent
    16  increase established under this law provided, however, that such  crite-
    17  ria  shall  provide  (a) as to hardship applications, for a finding that
    18  the level of fair rent increase is not sufficient to enable the owner to
    19  maintain approximately the same average annual net income  (which  shall
    20  be  computed  without regard to debt service, financing costs or manage-
    21  ment fees) for the three year period ending on or within six  months  of
    22  the  date  of  an application pursuant to such criteria as compared with
    23  annual net income, which prevailed on the average over the period  nine-
    24  teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
    25  first three years of operation if the building was completed since nine-
    26  teen hundred sixty-eight or for the first three  fiscal  years  after  a
    27  transfer of title to a new owner provided the new owner can establish to
    28  the  satisfaction  of  the commissioner that he or she acquired title to
    29  the building as a result of a bona fide sale of the entire building  and
    30  that  the new owner is unable to obtain requisite records for the fiscal
    31  years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
    32  despite  diligent  efforts to obtain same from predecessors in title and
    33  further provided that the new owner can provide financial data  covering
    34  a  minimum  of  six  years under his or her continuous and uninterrupted
    35  operation of the building to meet the three year to three  year  compar-
    36  ative  test  periods  herein provided; and (b) as to completed building-
    37  wide major capital improvements, for a finding  that  such  improvements
    38  are deemed depreciable under the Internal Revenue Code and that the cost
    39  is  to  be amortized over a twelve-year period for a building with thir-
    40  ty-five or fewer housing accommodations, or a twelve  and  one-half-year
    41  period for a building with more than thirty-five housing accommodations,
    42  for  any  determination  issued by the division of housing and community
    43  renewal after the effective date of the [the] chapter of the laws of two
    44  thousand nineteen that amended this paragraph and shall be removed  from
    45  the  legal regulated rent thirty years from the date the increase became
    46  effective inclusive of any increases  granted  by  the  applicable  rent
    47  guidelines board. Temporary major capital improvement increases shall be
    48  collectible  prospectively on the first day of the first month beginning
    49  sixty days from the date of mailing notice of approval  to  the  tenant.
    50  Such  notice  shall  disclose the total monthly increase in rent and the
    51  first month in which the tenant would be required to pay  the  temporary
    52  increase. An approval for a temporary major capital improvement increase
    53  shall  not  include retroactive payments. The collection of any increase
    54  shall not exceed two percent in any year from the effective date of  the
    55  order  granting  the increase over the rent set forth in the schedule of
    56  gross rents, with collectability of any dollar excess above said sum  to

        S. 7213--A                          5

     1  be  spread forward in similar increments and added to the rent as estab-
     2  lished or set in future years.  Upon vacancy, the landlord may  add  any
     3  remaining balance of the temporary major capital improvement increase to
     4  the  legal  regulated  rent.  Notwithstanding any other provision of the
     5  law, for any renewal lease commencing on or after  June  14,  2019,  the
     6  collection  of  any rent increases due to any major capital improvements
     7  approved on or after June 16, 2012 and before June 16,  2019  shall  not
     8  exceed  two  percent in any year for any tenant in occupancy on the date
     9  the major capital improvement was approved or based upon  cash  purchase
    10  price exclusive of interest or service charges. Where an application for
    11  a  temporary major capital improvement increase has been filed, a tenant
    12  shall have sixty days from the date of mailing of a notice of a proceed-
    13  ing in which to answer or reply.  The  state  division  of  housing  and
    14  community  renewal  shall provide any responding tenant with the reasons
    15  for the division's approval or denial of such application. The  division
    16  of  housing and community renewal shall require the submission of copies
    17  of all permits pertaining to major capital  improvement  work  with  any
    18  application  for a major capital improvement rent increase. Any applica-
    19  tion submitted with fraudulent permits or without required permits shall
    20  be denied. Notwithstanding anything to the contrary contained herein, no
    21  hardship increase granted pursuant to this paragraph shall,  when  added
    22  to the annual gross rents, as determined by the commissioner, exceed the
    23  sum of, (i) the annual operating expenses, (ii) an allowance for manage-
    24  ment  services  as  determined  by the commissioner, (iii) actual annual
    25  mortgage debt service (interest and amortization) on its indebtedness to
    26  a lending institution,  an  insurance  company,  a  retirement  fund  or
    27  welfare  fund  which is operated under the supervision of the banking or
    28  insurance laws of the state of New York or the United States,  and  (iv)
    29  eight  and  one-half percent of that portion of the fair market value of
    30  the property which exceeds the unpaid principal amount of  the  mortgage
    31  indebtedness  referred  to in subparagraph (iii) of this paragraph. Fair
    32  market value for the purposes of this paragraph shall be six  times  the
    33  annual gross rent. The collection of any increase in the stabilized rent
    34  for  any  apartment  pursuant  to  this  paragraph  shall not exceed six
    35  percent in any year from the effective date of the  order  granting  the
    36  increase  over  the  rent set forth in the schedule of gross rents, with
    37  collectability of any dollar excess above said sum to be spread  forward
    38  in similar increments and added to the stabilized rent as established or
    39  set in future years;
    40    § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
    41  576  of  the  laws of 1974, constituting the emergency tenant protection
    42  act of nineteen seventy-four, as amended by section  26  of  part  Q  of
    43  chapter 39 of the laws of 2019, is amended to read as follows:
    44    (3)  there has been since January first, nineteen hundred seventy-four
    45  a major capital improvement essential for the preservation, energy effi-
    46  ciency,  functionality,  or  infrastructure  of  the  entire   building,
    47  improvement  of  the  structure including heating, windows, plumbing and
    48  roofing, but shall not be for operation costs  or  unnecessary  cosmetic
    49  improvements.  An  adjustment under this paragraph shall be in an amount
    50  sufficient to amortize the cost of the  improvements  pursuant  to  this
    51  paragraph  over  a twelve-year period for a building with thirty-five or
    52  fewer housing accommodations, or a twelve  and  one-half  period  for  a
    53  building  with more than thirty-five housing accommodations and shall be
    54  removed from the legal regulated rent thirty years  from  the  date  the
    55  increase  became  effective  inclusive  of  any increases granted by the
    56  applicable rent guidelines board, for any determination  issued  by  the

        S. 7213--A                          6

     1  division  of  housing  and community renewal after the effective date of
     2  the chapter of the laws of two thousand nineteen that amended this para-
     3  graph. Temporary major capital improvement increases shall be  collecta-
     4  ble  prospectively  on  the first day of the first month beginning sixty
     5  days from the date of mailing notice of approval to the  tenant.    Such
     6  notice  shall  disclose the total monthly increase in rent and the first
     7  month in which the  tenant  would  be  required  to  pay  the  temporary
     8  increase. An approval for a temporary major capital improvement increase
     9  shall  not  include retroactive payments. The collection of any increase
    10  shall not exceed two percent in any year from the effective date of  the
    11  order  granting  the increase over the rent set forth in the schedule of
    12  gross rents, with collectability of any dollar excess above said sum  to
    13  be  spread forward in similar increments and added to the rent as estab-
    14  lished or set in future years. Upon vacancy, the landlord  may  add  any
    15  remaining balance of the temporary major capital improvement increase to
    16  the  legal  regulated  rent.  Notwithstanding any other provision of the
    17  law, the collection of any rent increases for any renewal lease commenc-
    18  ing on or after June 14, 2019, due to  any  major  capital  improvements
    19  approved  on  or  after June 16, 2012 and before June 16, 2019 shall not
    20  exceed two percent in any year for any tenant in occupancy on  the  date
    21  the  major  capital  improvement  was approved[,]; provided, however, no
    22  application for a major  capital  improvement  rent  increase  shall  be
    23  approved  by  the  division  of housing and community renewal unless the
    24  owner of the property has filed all copies of permits pertaining to  the
    25  major  capital  improvement work with such application.  Any application
    26  submitted with fraudulent permits or without required permits  shall  be
    27  denied; or
    28    §  4. Subparagraph 7 of the second undesignated paragraph of paragraph
    29  (a) of subdivision 4 of section 4 of chapter 274 of the  laws  of  1946,
    30  constituting  the  emergency  housing  rent  control  law, as separately
    31  amended by section 25 of part Q of chapter 39 and section 14 of  part  K
    32  of chapter 36 of the laws of 2019, is amended to read as follows:
    33    (7)  there has been since March first, nineteen hundred fifty, a major
    34  capital improvement essential for the preservation,  energy  efficiency,
    35  functionality,  or infrastructure of the entire building, improvement of
    36  the structure including heating,  windows,  plumbing  and  roofing,  but
    37  shall not be for operational costs or unnecessary cosmetic improvements;
    38  which  for any order of the commissioner issued after the effective date
    39  of the chapter of the laws of two thousand nineteen  that  amended  this
    40  paragraph the cost of such improvement shall be amortized over a twelve-
    41  year  period  for  buildings with thirty-five or fewer units or a twelve
    42  and one-half year period for buildings with more than thirty-five units,
    43  and shall be removed from the legal regulated rent thirty years from the
    44  date the increase became effective inclusive of any increases granted by
    45  the applicable rent guidelines board. Temporary major  capital  improve-
    46  ment  increases  shall  be collectible prospectively on the first day of
    47  the first month beginning sixty days from the date of mailing notice  of
    48  approval  to  the  tenant.  Such notice shall disclose the total monthly
    49  increase in rent and the first  month  in  which  the  tenant  would  be
    50  required  to  pay  the  temporary  increase. An approval for a temporary
    51  major  capital  improvement  increase  shall  not  include   retroactive
    52  payments. The collection of any increase shall not exceed two percent in
    53  any year from the effective date of the order granting the increase over
    54  the  rent  set forth in the schedule of gross rents, with collectability
    55  of any dollar excess above said sum to  be  spread  forward  in  similar
    56  increments  and added to the rent as established or set in future years.

        S. 7213--A                          7

     1  Upon vacancy, the landlord may add any remaining balance of  the  tempo-
     2  rary  major  capital  improvement  increase to the legal regulated rent.
     3  Notwithstanding any other provision of the law, for  any  renewal  lease
     4  commencing  on  or  after  June  14,  2019,  the  collection of any rent
     5  increases due to any major capital improvements  approved  on  or  after
     6  June  16,  2012 and before June 16, 2019 shall not exceed two percent in
     7  any year for any tenant in occupancy  on  the  date  the  major  capital
     8  improvement  was approved; provided, however, where an application for a
     9  temporary major capital improvement increase has been  filed,  a  tenant
    10  shall have sixty days from the date of mailing of a notice of a proceed-
    11  ing  in  which  to  answer  or  reply. The state division of housing and
    12  community renewal shall provide any responding tenant with  the  reasons
    13  for  the  division's  approval  or denial of such application; provided,
    14  however, no application for a major capital  improvement  rent  increase
    15  shall  be  approved  by  the  division  of housing and community renewal
    16  unless the owner of  the  property  has  filed  all  copies  of  permits
    17  pertaining  to the major capital improvement work with such application.
    18  Any application submitted with fraudulent permits  or  without  required
    19  permits shall be denied; or
    20    §  5. This act shall take effect immediately; provided that the amend-
    21  ments to section 26-405 of the city rent and rehabilitation law made  by
    22  section  one  of  this act shall remain in full force and effect only as
    23  long as the public emergency requiring the  regulation  and  control  of
    24  residential  rents and evictions continues, as provided in subdivision 3
    25  of section 1 of the local emergency housing rent control act;  provided,
    26  further, that the amendments to section 26-511 of the rent stabilization
    27  law of nineteen hundred sixty-nine made by section two of this act shall
    28  expire  on  the  same  date as such law expires and shall not affect the
    29  expiration of such law as provided under section 26-520 of such law,  as
    30  from time to time amended.

    31                                   PART C

    32    Section  1.  Subdivision  3  of section 302-a of the multiple dwelling
    33  law, as added by chapter 911 of the laws of 1965, is amended to read  as
    34  follows:
    35    3.  a. If (i) the official records of the department shall note that a
    36  rent impairing violation exists or existed  in  respect  to  a  multiple
    37  dwelling and that notice of such violation has been given by the depart-
    38  ment, by mail, to the owner last registered with the department and (ii)
    39  such  note  of the violation [is] was not cancelled or removed of record
    40  within [six] three  months  after  the  date  of  such  notice  of  such
    41  violation,  then  for the period that such violation remains uncorrected
    42  after the expiration of said [six] three months, no rent shall be recov-
    43  ered by any owner for any premises in such multiple dwelling used  by  a
    44  resident  thereof for human habitation in which the condition constitut-
    45  ing such rent impairing violation exists, provided, however, that if the
    46  violation is one that requires approval of plans by the  department  for
    47  the  corrective  work  and  if plans for such corrective work shall have
    48  been duly filed within [three months] one month from the date of  notice
    49  of  such  violation  by the department to the owner last registered with
    50  the department, the [six-months] three month period aforementioned shall
    51  not begin to run until the date that plans for the corrective  work  are
    52  approved  by  the department; if plans are not filed within said [three-
    53  months] one month period or if so filed, they are disapproved and amend-
    54  ments are not duly filed within thirty days after the date of  notifica-

        S. 7213--A                          8

     1  tion of the disapproval by the department to the person having filed the
     2  plans,  the  [six-months]  three month period shall be computed as if no
     3  plans whatever had been filed under this proviso. If a condition consti-
     4  tuting  a  rent  impairing  violation  exists  in the part of a multiple
     5  dwelling used in common by the  residents  or  in  the  part  under  the
     6  control  of the owner thereof, the violation shall be deemed to exist in
     7  the respective premises of each resident of the multiple dwelling.
     8    b. The provisions of subparagraph a shall not apply if (i) the  condi-
     9  tion referred to in the department's notice to the owner last registered
    10  with  the department did not in fact exist, notwithstanding the notation
    11  thereof in the records of the department; (ii) the  condition  which  is
    12  the subject of the violation has in fact been corrected within the three
    13  month  period required by subparagraph a of this subdivision, though the
    14  note thereof in the department has not been removed or cancelled;  (iii)
    15  the  violation  has been caused by the resident from whom rent is sought
    16  to be collected or by members of his family  or  by  his  guests  or  by
    17  another  resident  of the multiple dwelling or the members of the family
    18  of such other resident or by his guests, or (iv) the resident  proceeded
    19  against  for  rent  has  refused  entry  to the owner for the purpose of
    20  correcting the condition giving rise to the violation.
    21    c. To raise a defense under subparagraph a in any  action  to  recover
    22  rent or in any special proceeding for the recovery of possession because
    23  of  non-payment of rent, the resident must affirmatively plead and prove
    24  the material facts under subparagraph a[, and must also deposit with the
    25  clerk of the court in which the action or proceeding is pending  at  the
    26  time  of filing of the resident's answer the amount of rent sought to be
    27  recovered in  the  action  or  upon  which  the  proceeding  to  recover
    28  possession  is  based,  to be held by the clerk of the court until final
    29  disposition of the action or proceeding at which time the rent deposited
    30  shall be paid to the owner, if the owner prevails, or be returned to the
    31  resident if the resident prevails. Such deposit of  rent  shall  vitiate
    32  any  right  on  the  part  of the owner to terminate the lease or rental
    33  agreement of the resident because of nonpayment of rent].
    34    d. If a resident voluntarily pays rent or an installment of rent  when
    35  he or she would be privileged to withhold the same under subparagraph a,
    36  he  or  she shall [not thereafter] have [any] a claim or cause of action
    37  to recover back the rent or installment of rent so paid.    A  voluntary
    38  payment within the meaning hereof shall mean payment other than one made
    39  pursuant to a judgment in an action or special proceeding.
    40    e.  [If  upon  the  trial of any action to recover rent or any special
    41  proceeding for the recovery of possession because of non-payment of rent
    42  it shall appear that the  resident  has  raised  a  defense  under  this
    43  section  in  bad faith, or has caused the violation or has refused entry
    44  to the owner for the purpose of correcting the condition giving rise  to
    45  the  violation,  the court, in its discretion, may impose upon the resi-
    46  dent the reasonable costs of the owner, including counsel fees, in main-
    47  taining the action or proceeding not to exceed one hundred dollars.] The
    48  department shall notify the resident and owner  when  a  rent  impairing
    49  violation  has  been  placed  in their apartment. The notification shall
    50  include a list of the rent impairing violations placed and  an  explana-
    51  tion of the resident's right to raise the rent impairing violations as a
    52  defense  in  any action to recover rent or in any special proceeding for
    53  the recovery of possession because of non-payment of rent.
    54    § 2. Subdivisions 10 and 11  of  section  713  of  the  real  property
    55  actions and proceedings law, subdivision 10 as amended by chapter 467 of

        S. 7213--A                          9

     1  the  laws of 1981 and subdivision 11 as added by chapter 312 of the laws
     2  of 1962, are amended to read as follows:
     3    10.  The  person  in possession has entered the property or remains in
     4  possession by force or unlawful means and he or she or his or her prede-
     5  cessor in interest was not in quiet possession for  three  years  before
     6  the time of the forcible or unlawful entry or detainer and the petition-
     7  er  was  peaceably  in  actual possession at the time of the forcible or
     8  unlawful entry or in constructive possession at the time of the forcible
     9  or unlawful detainer. Any lawful occupant, physically or  constructively
    10  in  possession,  who  has been evicted or dispossessed without the court
    11  process mandated by section seven hundred eleven of  this  article,  may
    12  commence   a  proceeding  under  this  subdivision  to  be  restored  to
    13  possession, and shall be so restored upon proof that their eviction  was
    14  unlawful;  no  notice  to  quit shall be required in order to maintain a
    15  proceeding under this subdivision.
    16    11. The person in possession entered into possession as an incident to
    17  employment by petitioner, and the time agreed upon for  such  possession
    18  has expired or, if no such time was agreed upon, the employment has been
    19  terminated[;  no  notice  to quit shall be required in order to maintain
    20  the proceeding under this subdivision].
    21    § 3. Subdivisions 2 and 3 of section 732 of the real property  actions
    22  and proceedings law, as amended by section 14 of part M of chapter 36 of
    23  the laws of 2019, are amended to read as follows:
    24    2.  If the respondent answers, the clerk shall fix a date for trial or
    25  hearing not less than three nor more than eight days  after  joinder  of
    26  issue,  and shall immediately notify by mail the parties or their attor-
    27  neys of such date. If the determination be for the petitioner, the issu-
    28  ance of a warrant shall not be stayed for more than five days from  such
    29  determination,  except  as provided in section seven hundred fifty-three
    30  of this article.  If the respondent fails to appear on  such  date,  the
    31  court,  after  making  an assessment, pursuant to section three thousand
    32  two hundred fifteen of the civil practice law and  rules,  may  issue  a
    33  judgment  in  favor  of  the  petitioner and the issuance of the warrant
    34  shall be stayed for a period not to exceed ten days  from  the  date  of
    35  service, except as provided in section seven hundred fifty-three of this
    36  article.
    37    3.  If the respondent fails to answer within ten days from the date of
    38  service, as shown by the affidavit or  certificate  of  service  of  the
    39  notice  of  petition  and  petition, [the judge shall render judgment in
    40  favor of the petitioner and] the petitioner may make an application  for
    41  a  default judgment.   Upon this application, the clerk shall fix a date
    42  for inquest and immediately notify by mail the parties or  their  attor-
    43  neys  of such date.  If the respondent fails to appear on such date, the
    44  court, after making an assessment, pursuant to  section  three  thousand
    45  two  hundred  fifteen  of  the civil practice law and rules, may issue a
    46  judgment in favor of the petitioner and may stay  the  issuance  of  the
    47  warrant for a period of not to exceed ten days from the date of service,
    48  except as provided in section seven hundred fifty-three of this article.
    49    §  4.  This  act  shall take effect immediately and shall apply to all
    50  pending proceedings on and after such date.

    51                                   Part D

    52    Section 1. Legislative findings.  The  legislature  hereby  finds  and
    53  declares that:

        S. 7213--A                         10

     1    (a)  the  pool of rent regulated apartments in New York state contains
     2  an unacceptably high number of apartments in which the current rents are
     3  based on prior rents that exceeded the legal regulated rent at the  time
     4  they  were charged, but for which remedies were limited under the law in
     5  effect  before  the  effective  date of the Housing Stability and Tenant
     6  Protection Act of 2019 (HSTPA);
     7        (b) it is public policy prospectively to reduce, insofar as possi-
     8  ble, those rents to a level in line with what they would  have  been  in
     9  the  absence  of  the  unlawful rent setting and deregulations that were
    10  permitted under prior law to go unremedied, and therefore to impose  the
    11  rent  calculation  standards of the HSTPA prospectively from the date of
    12  its enactment, including in cases where the pre-HSTPA rent  has  already
    13  been established by a court or administrative agency;
    14    (c)  the  purpose  of  the  prospective application of the penalty and
    15  record review provisions of  the  HSTPA  is  to  prevent  the  perpetual
    16  collection  of  unlawful and inflated rents, and to encourage the volun-
    17  tary registration of any rent stabilized apartment for which  any  prior
    18  annual  registration  statement has not been filed, and to encourage the
    19  voluntary recalculation of unreliable pre-HSTPA rents;
    20    (d) in light of court decisions arising  under  the  HSTPA,  including
    21  Regina  Metro  v.  DHCR, it is public policy that the legislature define
    22  clearly the prospective reach of that law,  and  limit,  to  the  extent
    23  required by the constitution, the retroactive reach of that law;
    24    (e)  despite Regina, the scope of the fraud exception to the pre-HSTPA
    25  four-year rule for calculating rents remains unsettled and  the  subject
    26  of  litigation,  and  it is therefore public policy that the legislature
    27  codify, without expanding or reducing the liability of  landlords  under
    28  pre-HSTPA law, the standard for applying that exception;
    29    (f)  the  New  York  state  division  of housing and community renewal
    30  (DHCR) misinterpreted the rent stabilization law for a significant peri-
    31  od of time with respect to the regulatory obligations arising  from  the
    32  receipt of J-51 and 421-a tax benefits resulting in the unlawful deregu-
    33  lation  of  tens of thousands of rent-stabilized apartments, the setting
    34  of unlawful rents, and the collection of millions  of  dollars  of  rent
    35  overcharges,  during  a  housing  emergency.  Both landlords and tenants
    36  relied upon the DHCR's misinterpretation of  the  law.  In  Regina,  the
    37  Court  of  Appeals  settled  many  of the issues arising from overcharge
    38  claims by tenants who were misled into refraining from filing overcharge
    39  cases during the period when DHCR's erroneous interpretation of the  law
    40  was  in  effect, but left open the issue of whether a landlord's ongoing
    41  collection of overcharges and failure to return apartments to  rent-sta-
    42  bilization, after the law was clarified, should be treated as fraud;
    43    (g)  the integrity of the registration system for rent regulated hous-
    44  ing has been eroded by the use of  base  date  rents,  rather  than  the
    45  service  and  filing  of  reliable registration statements, to set rents
    46  under the law in effect between the enactment  of  the  Rent  Regulation
    47  Reform  Act  of  1997  and  the  HSTPA. It is therefore public policy to
    48  impose, prospectively from the date of the enactment  of  the  HSTPA,  a
    49  rent  calculation  formula  that, insofar as possible, derives the legal
    50  regulated rents for apartments  from  reliable  registration  statements
    51  served upon tenants and made available to the public; and
    52    (h) because pre-HSTPA law with respect to the maintenance by landlords
    53  of  rent  records was complex, and has an ongoing impact upon the calcu-
    54  lation of post-HSTPA rents, it is necessary to codify the pre-HSTPA  law
    55  that  applied  to the destruction of rent records prior to the enactment

        S. 7213--A                         11

     1  of the HSTPA, and to define clearly the impact  of  such  law  upon  the
     2  prospective calculation of rents under the HSTPA.
     3    §  2.  (a)  The  legal rent for all rent stabilized apartments for the
     4  period from July 1, 2019 and thereafter shall be determined  in  accord-
     5  ance with Part F of the HSTPA. Where the legal regulated rent for a rent
     6  stabilized  apartment  for  the  period  prior to June 14, 2019 has been
     7  determined by any court or  administrative  agency,  that  determination
     8  shall  not foreclose a recalculation of the post-HSTPA rent, except that
     9  any pre-HSTPA rent that, as of June 14, 2019, is  lower  than  the  rent
    10  that  would  be permitted to be charged under the HSTPA, shall be deemed
    11  to be the lawful rent under the HSTPA on June 15,  2019,  and  shall  be
    12  used as the basis for calculating subsequent rents under the HSTPA;
    13    (b)  Subdivision (a) of this section shall apply to all cases, includ-
    14  ing those pending as of June 14, 2019 before any court, appellate tribu-
    15  nal, or administrative agency in which a claim for rent  overcharges  or
    16  rent  arrears has been asserted with respect to rent stabilized housing,
    17  the legal regulated rent for the period from June 14, 2019 and thereaft-
    18  er shall be determined in accordance with Part F of the HSTPA. The legal
    19  regulated rent for the portion of any overcharge claim  involving  rents
    20  paid  prior  to  June  14, 2019 shall be determined under pre-HSTPA law,
    21  including the default formula in cases of fraud, as codified herein.
    22    (c) Nothing in this  act,  or  the  HSTPA,  or  prior  law,  shall  be
    23  construed  as restricting, impeding or diminishing the use of records of
    24  any age or type, going back to  any  date  that  may  be  relevant,  for
    25  purposes  of  determining  the  status  of  any apartment under the rent
    26  stabilization law;
    27    (d) The legal regulated rent payable for the period prior to June  14,
    28  2019  shall  be calculated in accordance with the law in effect prior to
    29  the HSTPA, including the prior four-year limitation on the consideration
    30  of rent records, and including the fraud exception  to  such  limitation
    31  and such other exceptions as existed under prior law and under the regu-
    32  lations of the New York state division of housing and community renewal.
    33  Nothing in this act shall be construed as limiting such exceptions or as
    34  limiting the application of any equitable doctrine that extends statutes
    35  of limitations generally. With respect to the calculation of legal rents
    36  for  the period prior to June 14, 2019, an owner shall be deemed to have
    37  committed fraud if the owner shall have committed a material  breach  of
    38  any  duty,  arising  under  statutory,  administrative or common law, to
    39  disclose truthfully to any tenant,  government  agency  or  judicial  or
    40  administrative  tribunal, the rent, regulatory status, or lease informa-
    41  tion, for purposes of claiming an unlawful  rent  or  claiming  to  have
    42  deregulated  an  apartment.  The  following conduct shall be presumed to
    43  have been the product of such fraud: (1) the  unlawful  deregulation  of
    44  any  apartment,  including such deregulation as results from claiming an
    45  unlawful increase such as would have brought the rent over  the  deregu-
    46  lation  threshold  that existed under prior law, unless the landlord can
    47  prove good faith reliance on a directive or ruling by an  administrative
    48  agency  or court; or (2) beginning October 1, 2011, failing to register,
    49  as rent stabilized, any apartment in a building receiving J-51 or  421-a
    50  benefits;
    51    (e)  In accordance with the practice of the New York state division of
    52  housing and community renewal prior to June 14, 2019, where fraud is not
    53  established, base rents of apartments unlawfully  deregulated  shall  be
    54  calculated as the average of rents for comparable rent stabilized apart-
    55  ments  in  the  building,  rather than the default formula applicable to
    56  cases involving fraud;

        S. 7213--A                         12

     1    (f) For the period prior to June 14,  2019,  neither  the  version  of
     2  subdivision  g  of section 26-516 of the administrative code of the city
     3  of New York then in effect, nor the version of  section  2523.7  of  the
     4  rent  stabilization  code  (9  NYCRR  2523.7)  then  in  effect shall be
     5  construed  as  permitting the destruction of rent records for units that
     6  have not been properly and timely registered. Where  records  have  been
     7  permitted to be destroyed by virtue of proper registration, and no other
     8  law  required  the  maintenance of such records, and where the owner has
     9  proven that such records were  actually  destroyed  in  accordance  with
    10  prior  law  and that such destruction took place prior to June 15, 2019,
    11  the registration served and filed prior to such  lawful  destruction  of
    12  records shall be presumed to be reliable, for purposes of any post-HSTPA
    13  calculation  of  the rent, but that presumption shall be rebuttable. The
    14  parties shall be entitled to discovery  of  any  evidence  found  to  be
    15  reasonably  necessary  to  demonstrate  the  legal rent. Nothing in this
    16  subdivision shall be interpreted as authorizing the destruction  of  any
    17  record, that under prior law was relevant to establishing (1) the status
    18  of an apartment as regulated or unregulated; (2) the presence or absence
    19  of  fraud  with  respect  to  renting any housing accommodation; (3) the
    20  presence or absence of willfulness in the collection of overcharges; (4)
    21  the useful life of any item, the replacement of which is claimed by  the
    22  owner  to  qualify an apartment for a rent increase; (5) the duration of
    23  any tenancy, such as would establish whether an owner was entitled under
    24  prior law to a longevity increase; or (6) compliance with any law  that,
    25  independently  of  the  rent stabilization law, required or requires the
    26  maintenance of such records.  Where  the  calculation  of  the  rent  is
    27  dependent  upon records that the owner has improperly destroyed, includ-
    28  ing where the records were destroyed without the apartment  having  been
    29  registered,  the rent shall be calculated in accordance with the default
    30  formula.
    31    § 3. This act shall take effect immediately.
    32    § 2. Severability. If any clause, sentence, paragraph, section or part
    33  of this act shall be adjudged by any court of competent jurisdiction  to
    34  be  invalid  and  after  exhaustion  of all further judicial review, the
    35  judgment shall not affect, impair, or invalidate the remainder  thereof,
    36  but  shall  be  confined in its operation to the clause, sentence, para-
    37  graph, section or part of this act directly involved in the  controversy
    38  in which the judgment shall have been rendered.
    39    §  3.  This  act shall take effect immediately provided, however, that
    40  the applicable effective date of Parts A through D of this act shall  be
    41  as specifically set forth in the last section of such Parts.
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