Bill Text: NY S08431 | 2019-2020 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Establishes rental security insurance and the security deposit guarantee program to give tenants an option to pay any deposit or advance to rent or use residential real property or a dwelling unit.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-06-26 - PRINT NUMBER 8431A [S08431 Detail]

Download: New_York-2019-S08431-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          8431

                    IN SENATE

                                      May 29, 2020
                                       ___________

        Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
          printed to be committed to the Committee on Judiciary

        AN ACT to amend the real property law, in relation to establishing secu-
          rity deposit options for certain tenants;  and  to  amend  the  public
          housing  law, in relation to establishing the security deposit guaran-
          tee program

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  The  real property law is amended by adding a new section
     2  238-b to read as follows:
     3    § 238-b. Security deposit. 1.  A  landlord  who  requires  a  security
     4  deposit  to  be  paid  by a tenant which is covered by the provisions of
     5  section 7-108 of the general obligations law, at  the  request  of  such
     6  tenant,  shall  offer to accept at least one of the following options in
     7  lieu of such security deposit:
     8    a. Rental security insurance that satisfies the following criteria:
     9    (i) the insurance provider is an approved carrier licensed by  depart-
    10  ment  of  financial services pursuant to article eleven of the insurance
    11  law;
    12    (ii) the coverage is effective upon the payment of the  first  premium
    13  and remains effective for the entire lease term; and
    14    (iii)  the coverage provided per claim is no less than the amount such
    15  landlord requires for security deposits;
    16    b. Payment of any security deposit over a series of no less  than  six
    17  equal  monthly installments payments, which installments shall be due on
    18  the same day as the monthly rent payment and which may be paid  together
    19  with the monthly rent payment in a single transaction, absent a separate
    20  agreement between such landlord and tenant;
    21    c.  Payment  of a reduced security deposit which shall be no more than
    22  fifty percent of the amount of one month's rent under such contract; or
    23    d. If such tenant qualifies, payment of any deposit through the  secu-
    24  rity  deposit guarantee program established by section fourteen-a of the
    25  public housing law.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15573-01-0
        S. 8431                             2

     1    2. A tenant who elects to provide rental security insurance,  pursuant
     2  to paragraph a of subdivision one of this section, in lieu of a required
     3  security deposit shall not be required to provide additional security or
     4  insurance  coverage  per  claim  in  an  amount  greater than the amount
     5  required for the security deposit.
     6    3. Such landlord shall not impose any additional fees or interest on a
     7  tenant  that  pays  his  or  her security deposit in an alternate manner
     8  pursuant to subdivision one of this section.
     9    4. Any agreement to pay a security deposit in  installments  shall  be
    10  included  within such contract, lease or agreement and shall specify the
    11  total deposit amount due and the amount due for each installment.
    12    5. Prior to entering into a contract,  lease  or  rental  agreement  a
    13  landlord  shall provide the tenant written notice of the available secu-
    14  rity deposit alternatives and include  the  following  language:  "If  a
    15  security  deposit is required, tenant has the right to request and land-
    16  lord is required to accept one of the following  four  alternatives:  a.
    17  rental security insurance; b. a deposit paid over no less than six equal
    18  monthly  installments; c. a one-time reduced security deposit payment of
    19  no more than fifty percent of the monthly rental rate  charged  for  the
    20  rental  unit;  or if such tenant qualifies d. a deposit paid through the
    21  security deposit guarantee program. Tenant  shall  not  be  required  to
    22  provide rental security insurance coverage per claim in an amount great-
    23  er than the amount required for the security deposit".
    24    § 2. The public housing law is amended by adding a new section 14-a to
    25  read as follows:
    26    § 14-a. The security deposit guarantee program. 1. (a) The commission-
    27  er  shall  establish  within  available appropriations, and administer a
    28  security deposit guarantee program for any person who:
    29    (i) (A) is a  recipient  of:  the  supplemental  nutrition  assistance
    30  program  pursuant  to  section  ninety-five  of the social services law,
    31  safety net assistance pursuant to title three of  article  five  of  the
    32  social  services  law,  or  any other qualifying federal or state public
    33  assistance program as determined by the commissioner;
    34    (B) has a documented showing of financial need; and
    35    (ii)(A) is residing in an emergency shelter or homeless housing estab-
    36  lished under article two-A of the social services law; or
    37    (B) have a certification, voucher or allowance from the public assist-
    38  ance shelter allowance established by section one  hundred  thirty-one-a
    39  of  the  social  services  law,  the  federal  Section 8 housing voucher
    40  program or the Section 8 housing certificate program (42 U.S.C. 1437  et
    41  seq.).
    42    (b) The commissioner shall provide security deposit guarantees for use
    43  by  such  persons  in  lieu  of a security deposit on residential rental
    44  property or rental dwelling unit.
    45    (c) Eligible persons shall receive a security deposit guarantee in  an
    46  amount not to exceed the equivalent of one month's rent on such residen-
    47  tial rental property or rental dwelling unit.
    48    (d) No person shall apply for and receive a security deposit guarantee
    49  more than once in any eighteen-month period without the express authori-
    50  zation  of  the  commissioner,  except as provided in subdivision two of
    51  this section.
    52    2. (a) In the case of a person who  qualifies  for  a  guarantee,  the
    53  commissioner  or  any  local or regional nonprofit corporation or social
    54  service organization under contract with the  division  of  housing  and
    55  community renewal to assist in the administration of the security depos-
    56  it  program  established  pursuant  to  subdivision one of this section,
        S. 8431                             3

     1  shall execute a written agreement to pay the landlord  for  any  damages
     2  suffered by the landlord due to the tenant's failure to comply with such
     3  tenant's  obligations  pursuant to the contract for use or rental of the
     4  residential rental property or rental dwelling unit, provided the amount
     5  of any such payment shall not exceed the amount of the requested securi-
     6  ty deposit.
     7    (b) Notwithstanding the provisions of subdivision one of this section,
     8  if  a  person who has previously received a grant for a security deposit
     9  or a security deposit guarantee becomes eligible for a subsequent  secu-
    10  rity  deposit  guarantee  within  eighteen months after a claim has been
    11  paid on a prior security deposit guarantee, such person  may  receive  a
    12  security deposit guarantee. The amount of the subsequent security depos-
    13  it  guarantee  for  which such person would otherwise have been eligible
    14  shall be reduced by any amount of a previous grant which  has  not  been
    15  returned  to  the  department pursuant to this section, or the amount of
    16  any payment made to the landlord for damages pursuant to this section.
    17    3. Any payment made pursuant to this section  to  a  person  receiving
    18  assistance  pursuant to any federal, state or local program shall not be
    19  deducted from the amount of assistance  to  which  the  recipient  would
    20  otherwise be entitled under such program.
    21    4.  The  commissioner may, within available appropriations, on a case-
    22  by-case basis, provide a security deposit grant to a person eligible for
    23  the security deposit guarantee program established pursuant to  subdivi-
    24  sion  one  of this section, in an amount not to exceed the equivalent of
    25  one month's rent on such residential rental property or rental  dwelling
    26  unit,  provided the commissioner determines that emergency circumstances
    27  exist which threaten the health,  safety  or  welfare  of  a  child  who
    28  resides  with  such  person.  Such person shall not be eligible for more
    29  than one such grant without  the  authorization  of  said  commissioner.
    30  Nothing  in  this  section shall preclude the approval of such one-month
    31  security deposit grant in conjunction with a one-month security  deposit
    32  guarantee.
    33    5. Nothing in this section shall preclude the commissioner from enter-
    34  ing  into  a  contract with one or more local or regional not-for-profit
    35  corporations or social service organizations for the purpose of  issuing
    36  security deposit guarantees pursuant to this section.
    37    6.  A  landlord shall submit a claim for damages not later than forty-
    38  five days after the date of termination of the tenancy. Payment shall be
    39  made only for a claim that includes receipts for repairs made. No  claim
    40  shall  be  paid  for a dwelling unit from which a tenant vacated because
    41  substandard conditions made such dwelling unit uninhabitable, as  deter-
    42  mined by a local, state or federal regulatory agency.
    43    7.  Any  person  who  is  found eligible to receive a security deposit
    44  guarantee under this section and for whom the commissioner  has  paid  a
    45  claim  by  a landlord, shall contribute five percent of one month's rent
    46  under such contract to the payment of the security deposit. The  commis-
    47  sioner may waive such payment for good cause.
    48    8.  The commissioner shall promulgate rules and regulations, to admin-
    49  ister the program established pursuant to this section and to set eligi-
    50  bility criteria for such program.
    51    § 3. This act shall take effect on the one hundred twentieth day after
    52  it shall have become a law. Effective immediately, the addition,  amend-
    53  ment and/or repeal of any rule or regulation necessary for the implemen-
    54  tation  of  this act on its effective date are authorized to be made and
    55  completed on or before such effective date.