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. LBD11064-05-1S. 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 rentS. 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 toS. 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 theS. 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-53months] 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 the25clerk of the court in which the action or proceeding is pending at the26time of filing of the resident's answer the amount of rent sought to be27recovered in the action or upon which the proceeding to recover28possession is based, to be held by the clerk of the court until final29disposition of the action or proceeding at which time the rent deposited30shall be paid to the owner, if the owner prevails, or be returned to the31resident if the resident prevails. Such deposit of rent shall vitiate32any right on the part of the owner to terminate the lease or rental33agreement 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 special41proceeding for the recovery of possession because of non-payment of rent42it shall appear that the resident has raised a defense under this43section in bad faith, or has caused the violation or has refused entry44to the owner for the purpose of correcting the condition giving rise to45the violation, the court, in its discretion, may impose upon the resi-46dent the reasonable costs of the owner, including counsel fees, in main-47taining 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 ofS. 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 maintain20the 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 in40favor 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 enactmentS. 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.