Amd 26-405 & 26-511, NYC Ad Cd; amd 6, Emerg Ten Prot Act of 1974
Provides that no landlord shall deny access to a licensed professional engineer or licensed registered architect hired by any tenant or tenant association representing tenants of a multiple dwelling of six units or more for the purpose of conducting an inspection of a major capital improvement for which an application for a maximum rent adjustment has been filed by the landlord; provides that such inspection shall be conducted after notice to the landlord and during normal business hours; provides for the filing of such inspection report by such tenants with the New York city rent agency for consideration in such application's determination.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4711
SPONSOR: Rosenthal L TITLE OF BILL:
An act to amend the administrative code of the city of New York and the
emergency tenant protection act of nineteen seventy-four, in relation to
inspection of major capital improvements for which rent increases are
requested and in relation to extending the provisions of the rent
stabilization law
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to grant tenants in rent-
stabilized/controlled apartments the ability to hire a private engineer
or architect in order to conduct an independent inspection of a Major
Capital Improvement (MCI) completed by the landlord.
SUMMARY OF PROVISIONS:
This bill would require landlords of rent stabilized and rent controlled
apartment buildings who are applying for MCI increases to allow access
to a professional engineer or architect hired by the tenant, tenants or
tenants' association to inspect the improvements done by the landlord.
In turn, the report filed by the engineer or architect can be submitted
with the NYC rent agency or the State Division of Housing and Community
Renewal by the tenants in objection to the major capital improvement
increase.
JUSTIFICATION:
In order to receive a major capital improvement rent increase, a land-
lord must file a report with the Division of Housing and Community
Renewal (DHCR) which sends a copy of that report to the tenants of the
building. The DHCR then gives the tenants an opportunity to verify the
information in the report, and, if the tenants disagree with the land-
lord's claims, to object to the proposed rent increase. In order for
tenants to verify what is stated in the landlord's report, they must be
able to hire experts to inspect the improvements described in the
report. Presently, landlords can deny access to engineers or architects
hired by the tenants. This legislation requires landlords to allow
access to engineers or architects hired by the tenants to inspect build-
ing improvements, and enables tenants to use reports prepared by their
experts to object to the proposed rent increase.
PRIOR LEGISLATIVE HISTORY:
2021-22: A.3974 (Cymbrowitz) - Housing; S.5387 (Parker) - Housing,
Construction and Community Development
2019-20: A3241 Referred to Housing/S.4818 Parker Referred to Housing,
Construction & Community Development
2018: A3700 - Referred to Housing/ 5.3643 - Referred to Housing,
Construction & Community Development Parker
2017: A.5700 - Referred to Housing/ S.3643 - Referred to Housing,
Construction & Community Development Parker
2016: A.1763-A - Ordered to third reading.
2015: A.1763 - Referred to Housing.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
This legislation will have no significant implications for the State.
EFFECTIVE DATE:
This act shall take effect on the 120th day after its enactment, except
that any rules and regulations necessary for the timely implementation
of this act on its effective date shall be promulgated on or before such
date; provided that the amendment to section 26-405 of the city Rent and
Rehabilitation Law made by section one of this act shall remain in full
force and effect only so long as the public emergency requiring the
regulation and control of residential rents and evictions continues, as
provided in subdivision 3 of section 1 of the Local Emergency Housing
Rent Control Act and provided further that the amendment to section
26-511 of the Rent Stabilization Law of 1969 made by section two of this
act shall expire on the same date as such law expires and shall not
affect the expiration of such law as provided under section 26-520 of
such law and provided further that the amendment to section 6 of the
Emergency Tenant Protection Act of 1974 made by section three of this
act shall expire on the same date as such act expires and shall not
affect the expiration of such act as provided in section 17 of chapter
576 of the laws of 1974, as amended.
STATE OF NEW YORK
________________________________________________________________________
4711
2023-2024 Regular Sessions
IN ASSEMBLY
February 22, 2023
___________
Introduced by M. of A. L. ROSENTHAL -- read once and referred to the
Committee on Housing
AN ACT to amend the administrative code of the city of New York and the
emergency tenant protection act of nineteen seventy-four, in relation
to inspection of major capital improvements for which rent increases
are requested and in relation to extending the provisions of the rent
stabilization law
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
2 26-405 of the administrative code of the city of New York, as amended by
3 section 27 of part Q chapter 39 of the laws of 2019, is amended to read
4 as follows:
5 (g) There has been since July first, nineteen hundred seventy, a major
6 capital improvement essential for the preservation energy efficiency,
7 functionality, or infrastructure of the entire building, improvement of
8 the structure including heating, windows, plumbing and roofing but shall
9 not be for operational costs or unnecessary cosmetic improvements. The
10 temporary increase based upon a major capital improvement under this
11 subparagraph for any order of the commissioner issued after [the effec-
12 tive date of the chapter of the laws of two thousand nineteen that
13 amended this subparagraph] June 14, 2014 shall be in an amount suffi-
14 cient to amortize the cost of the improvements pursuant to this subpara-
15 graph [(g)] over a twelve-year period for buildings with thirty-five or
16 fewer units or a twelve and one-half year period for buildings with more
17 than thirty-five units, and shall be removed from the legal regulated
18 rent thirty years from the date the increase became effective inclusive
19 of any increases granted by the applicable rent guidelines board. Tempo-
20 rary major capital improvement increases shall be collectible prospec-
21 tively on the first day of the first month beginning sixty days from the
22 date of mailing notice of approval to the tenant. Such notice shall
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07976-01-3
A. 4711 2
1 disclose the total monthly increase in rent and the first month in which
2 the tenant would be required to pay the temporary increase. An approval
3 for a temporary major capital improvement increase shall not include
4 retroactive payments. The collection of any increase shall not exceed
5 two percent in any year from the effective date of the order granting
6 the increase over the rent set forth in the schedule of gross rents,
7 with collectability of any dollar excess above said sum to be spread
8 forward in similar increments and added to the rent as established or
9 set in future years. Upon vacancy, the landlord may add any remaining
10 balance of the temporary major capital improvement increase to the legal
11 regulated rent. No landlord shall deny access to a professional engi-
12 neer licensed to practice in the state of New York or a registered
13 architect licensed to practice in the state of New York hired by any
14 tenant, tenants or tenant association representing tenants of a multiple
15 dwelling of six units or more for the purpose of conducting an
16 inspection of a major capital improvement for which an application for
17 adjustment of maximum rent has been filed. Such inspection shall be
18 conducted after notice to the landlord and during normal business hours.
19 Such tenant may file the report of the inspection with the city rent
20 agency for consideration in the determination of such application.
21 Notwithstanding any other provision of the law, for any renewal lease
22 commencing on or after June 14, 2019, the collection of any rent
23 increases due to any major capital improvements approved on or after
24 June 16, 2012 and before June 16, 2019 shall not exceed two percent in
25 any year for any tenant in occupancy on the date the major capital
26 improvement was approved, or
27 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
28 tive code of the city of New York, as separately amended by section 12
29 of part K of chapter 36 and section 28 of part Q of chapter 39 of the
30 laws of 2019, is amended to read as follows:
31 (6) provides criteria whereby the commissioner may act upon applica-
32 tions by owners for increases in excess of the level of fair rent
33 increase established under this law provided, however, that such crite-
34 ria shall provide (a) as to hardship applications, for a finding that
35 the level of fair rent increase is not sufficient to enable the owner to
36 maintain approximately the same average annual net income (which shall
37 be computed without regard to debt service, financing costs or manage-
38 ment fees) for the three year period ending on or within six months of
39 the date of an application pursuant to such criteria as compared with
40 annual net income, which prevailed on the average over the period nine-
41 teen hundred sixty-eight through nineteen hundred seventy, or for the
42 first three years of operation if the building was completed since nine-
43 teen hundred sixty-eight or for the first three fiscal years after a
44 transfer of title to a new owner provided the new owner can establish to
45 the satisfaction of the commissioner that he or she acquired title to
46 the building as a result of a bona fide sale of the entire building and
47 that the new owner is unable to obtain requisite records for the fiscal
48 years nineteen hundred sixty-eight through nineteen hundred seventy
49 despite diligent efforts to obtain same from predecessors in title and
50 further provided that the new owner can provide financial data covering
51 a minimum of six years under his or her continuous and uninterrupted
52 operation of the building to meet the three year to three year compar-
53 ative test periods herein provided; and (b) as to completed building-
54 wide major capital improvements, for a finding that such improvements
55 are deemed depreciable under the Internal Revenue Code and that the cost
56 is to be amortized over a twelve-year period for a building with thir-
A. 4711 3
1 ty-five or fewer housing accommodations, or a twelve and one-half-year
2 period for a building with more than thirty-five housing accommodations,
3 for any determination issued by the division of housing and community
4 renewal after [the effective date of the the chapter of the laws of two
5 thousand nineteen that amended this paragraph] June 14, 2019 and shall
6 be removed from the legal regulated rent thirty years from the date the
7 increase became effective inclusive of any increases granted by the
8 applicable rent guidelines board. Temporary major capital improvement
9 increases shall be collectible prospectively on the first day of the
10 first month beginning sixty days from the date of mailing notice of
11 approval to the tenant. Such notice shall disclose the total monthly
12 increase in rent and the first month in which the tenant would be
13 required to pay the temporary increase. An approval for a temporary
14 major capital improvement increase shall not include retroactive
15 payments. The collection of any increase shall not exceed two percent in
16 any year from the effective date of the order granting the increase over
17 the rent set forth in the schedule of gross rents, with collectability
18 of any dollar excess above said sum to be spread forward in similar
19 increments and added to the rent as established or set in future years.
20 Upon vacancy, the landlord may add any remaining balance of the tempo-
21 rary major capital improvement increase to the legal regulated rent. No
22 landlord shall deny access to a professional engineer licensed to prac-
23 tice in the state of New York or a registered architect licensed to
24 practice in the state of New York hired by any tenant, tenants or tenant
25 association representing tenants of a multiple dwelling of six units or
26 more for the purpose of conducting an inspection of a major capital
27 improvement for which an application for adjustment of maximum rent has
28 been filed. Such inspection shall be conducted after notice to the land-
29 lord and during normal business hours. Such tenant may file the report
30 of the inspection with the city rent agency for consideration in the
31 determination of such application. Notwithstanding any other provision
32 of the law, for any renewal lease commencing on or after June 14, 2019,
33 the collection of any rent increases due to any major capital improve-
34 ments approved on or after June 16, 2012 and before June 16, 2019 shall
35 not exceed two percent in any year for any tenant in occupancy on the
36 date the major capital improvement was approved or based upon cash
37 purchase price exclusive of interest or service charges. Where an appli-
38 cation for a temporary major capital improvement increase has been
39 filed, a tenant shall have sixty days from the date of mailing of a
40 notice of a proceeding in which to answer or reply. The state division
41 of housing and community renewal shall provide any responding tenant
42 with the reasons for the division's approval or denial of such applica-
43 tion. Notwithstanding anything to the contrary contained herein, no
44 hardship increase granted pursuant to this paragraph shall, when added
45 to the annual gross rents, as determined by the commissioner, exceed the
46 sum of, (i) the annual operating expenses, (ii) an allowance for manage-
47 ment services as determined by the commissioner, (iii) actual annual
48 mortgage debt service (interest and amortization) on its indebtedness to
49 a lending institution, an insurance company, a retirement fund or
50 welfare fund which is operated under the supervision of the banking or
51 insurance laws of the state of New York or the United States, and (iv)
52 eight and one-half percent of that portion of the fair market value of
53 the property which exceeds the unpaid principal amount of the mortgage
54 indebtedness referred to in subparagraph (iii) of this paragraph. Fair
55 market value for the purposes of this paragraph shall be six times the
56 annual gross rent. The collection of any increase in the stabilized rent
A. 4711 4
1 for any apartment pursuant to this paragraph shall not exceed six
2 percent in any year from the effective date of the order granting the
3 increase over the rent set forth in the schedule of gross rents, with
4 collectability of any dollar excess above said sum to be spread forward
5 in similar increments and added to the stabilized rent as established or
6 set in future years;
7 § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
8 576 of the laws of 1974, constituting the emergency tenant protection
9 act of nineteen seventy-four, as amended by section 26 of part Q of
10 chapter 39 of the laws of 2019, is amended to read as follows:
11 (3) there has been since January first, nineteen hundred seventy-four
12 a major capital improvement essential for the preservation, energy effi-
13 ciency, functionality, or infrastructure of the entire building,
14 improvement of the structure including heating, windows, plumbing and
15 roofing, but shall not be for operation costs or unnecessary cosmetic
16 improvements. An adjustment under this paragraph shall be in an amount
17 sufficient to amortize the cost of the improvements pursuant to this
18 paragraph over a twelve-year period for a building with thirty-five or
19 fewer housing accommodations, or a twelve and one-half period for a
20 building with more than thirty-five housing accommodations and shall be
21 removed from the legal regulated rent thirty years from the date the
22 increase became effective inclusive of any increases granted by the
23 applicable rent guidelines board, for any determination issued by the
24 division of housing and community renewal after [the effective date of
25 the chapter of the laws of two thousand nineteen that amended this para-
26 graph] June 14, 2019. Temporary major capital improvement increases
27 shall be collectable prospectively on the first day of the first month
28 beginning sixty days from the date of mailing notice of approval to the
29 tenant. Such notice shall disclose the total monthly increase in rent
30 and the first month in which the tenant would be required to pay the
31 temporary increase. An approval for a temporary major capital improve-
32 ment increase shall not include retroactive payments. The collection of
33 any increase shall not exceed two percent in any year from the effective
34 date of the order granting the increase over the rent set forth in the
35 schedule of gross rents, with collectability of any dollar excess above
36 said sum to be spread forward in similar increments and added to the
37 rent as established or set in future years. Upon vacancy, the landlord
38 may add any remaining balance of the temporary major capital improvement
39 increase to the legal regulated rent. No landlord shall deny access to
40 a professional engineer licensed to practice in the state of New York or
41 a registered architect licensed to practice in the state of New York
42 hired by any tenant, tenants or tenant association representing tenants
43 of a multiple dwelling of six units or more for the purpose of conduct-
44 ing an inspection of a major capital improvement for which an applica-
45 tion for adjustment of maximum rent has been filed. Such inspection
46 shall be conducted after notice to the landlord and during normal busi-
47 ness hours. Such tenant may file the report of the inspection with the
48 city rent agency for consideration in the determination of such applica-
49 tion. Notwithstanding any other provision of the law, the collection of
50 any rent increases for any renewal lease commencing on or after June 14,
51 2019, due to any major capital improvements approved on or after June
52 16, 2012 and before June 16, 2019 shall not exceed two percent in any
53 year for any tenant in occupancy on the date the major capital improve-
54 ment was approved, or
55 § 4. This act shall take effect on the one hundred twentieth day after
56 it shall have become a law, provided that the amendments to section
A. 4711 5
1 26-405 of the city rent and rehabilitation law made by section one of
2 this act shall remain in full force and effect only so long as the
3 public emergency requiring the regulation and control of residential
4 rents and evictions continues, as provided in subdivision 3 of section 1
5 of the local emergency housing rent control act; and provided further
6 that the amendments to section 26-511 of the rent stabilization law of
7 nineteen hundred sixty-nine made by section two of this act shall expire
8 on the same date as such law expires and shall not affect the expiration
9 of such law as provided under section 26-520 of such law. Effective
10 immediately, the addition, amendment and/or repeal of any rule and regu-
11 lation necessary for the implementation of this act on its effective
12 date are authorized to be made on or before such date.
