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A05700 Summary:

BILL NOA05700
 
SAME ASSAME AS S03643
 
SPONSORCymbrowitz
 
COSPNSR
 
MLTSPNSR
 
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.
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A05700 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5700
 
SPONSOR: Cymbrowitz
  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.   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):   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: 2016: A.1763-A - Ordered to third reading. 2015: A.1763 - Referred to Housing. 2014: A.2817 - Referred to Housing. 2013: Advanced to third reading. 2012: A.1784 - Referred to Housing. 2011: A.1784 Referred to Housing. 2010: A.1357 - Reported Referred to codes. 2009: A.1357 - Referred to Housing. 2008: A.5693- Advanced to third reading. 2007: - Referred to Housing.A.5693 2006: A.9363- Referred to Housing. 2005: A.858 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 1979 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.
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A05700 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5700
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 14, 2017
                                       ___________
 
        Introduced  by  M.  of  A.  CYMBROWITZ  -- 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  31  of  part A of chapter 20 of the laws of 2015, is amended to
     4  read as follows:
     5    (g) There has been since July first, nineteen hundred seventy, a major
     6  capital improvement required for the operation, preservation or  mainte-
     7  nance  of the structure. An adjustment under this subparagraph [(g)] for
     8  any order of the commissioner issued after the  effective  date  of  the
     9  rent  act  of 2015 shall be in an amount sufficient to amortize the cost
    10  of the improvements pursuant to this subparagraph [(g)] over  an  eight-
    11  year period for buildings with thirty-five or fewer units or a nine year
    12  period  for  buildings  with  more than [thiry-five] thirty-five units[,
    13  or].  No landlord shall deny access to a professional engineer  licensed
    14  to  practice in the state of New York or a registered architect licensed
    15  to practice in the state of New York hired by  any  tenant,  tenants  or
    16  tenant  association  representing  tenants of a multiple dwelling of six
    17  units or more for the purpose of conducting an  inspection  of  a  major
    18  capital  improvement  for which an application for adjustment of maximum
    19  rent has been filed. Such inspection shall be conducted after notice  to
    20  the  landlord and during normal business hours. Such tenant may file the
    21  report of the inspection with the city rent agency for consideration  in
    22  the determination of such application; or
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06610-01-7

        A. 5700                             2
 
     1    § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
     2  tive code of the city of New York, as amended by section 29 of part A of
     3  chapter 20 of the laws of 2015, is amended to read as follows:
     4    (6)  provides  criteria whereby the commissioner may act upon applica-
     5  tions by owners for increases in  excess  of  the  level  of  fair  rent
     6  increase  established under this law provided, however, that such crite-
     7  ria shall provide (a) as to hardship applications, for  a  finding  that
     8  the level of fair rent increase is not sufficient to enable the owner to
     9  maintain  approximately  the same average annual net income (which shall
    10  be computed without regard to debt service, financing costs  or  manage-
    11  ment  fees)  for the three year period ending on or within six months of
    12  the date of an application pursuant to such criteria  as  compared  with
    13  annual  net income, which prevailed on the average over the period nine-
    14  teen hundred sixty-eight through nineteen hundred seventy,  or  for  the
    15  first three years of operation if the building was completed since nine-
    16  teen  hundred  sixty-eight  or  for the first three fiscal years after a
    17  transfer of title to a new owner provided the new owner can establish to
    18  the satisfaction of the commissioner that he or she  acquired  title  to
    19  the  building as a result of a bona fide sale of the entire building and
    20  that the new owner is unable to obtain requisite records for the  fiscal
    21  years  nineteen  hundred  sixty-eight  through  nineteen hundred seventy
    22  despite diligent efforts to obtain same from predecessors in  title  and
    23  further  provided that the new owner can provide financial data covering
    24  a minimum of six years under his or  her  continuous  and  uninterrupted
    25  operation  of  the building to meet the three year to three year compar-
    26  ative test periods herein provided; and (b) as  to  completed  building-
    27  wide  major  capital  improvements, for a finding that such improvements
    28  are deemed depreciable under the Internal Revenue Code and that the cost
    29  is to be amortized over an eight-year period for a building  with  thir-
    30  ty-five  or  fewer  housing  accommodations, or a nine-year period for a
    31  building with more than  thirty-five  housing  accommodations,  for  any
    32  determination  issued  by  the division of housing and community renewal
    33  after the effective date of the  rent  act  of  2015,  based  upon  cash
    34  purchase  price  exclusive  of interest or service charges.  No landlord
    35  shall deny access to a professional engineer licensed to practice in the
    36  state of New York or a registered architect licensed to practice in  the
    37  state  of  New  York  hired by any tenant, tenants or tenant association
    38  representing tenants of a multiple dwelling of six units or more for the
    39  purpose of conducting an inspection of a major capital  improvement  for
    40  which an application for adjustment of maximum rent has been filed. Such
    41  inspection  shall  be  conducted after notice to the landlord and during
    42  normal business hours. Such tenant may file the report of the inspection
    43  with the city rent agency for consideration in the determination of such
    44  application. Notwithstanding anything to the contrary contained  herein,
    45  no  hardship  increase  granted  pursuant  to this paragraph shall, when
    46  added to the annual gross rents,  as  determined  by  the  commissioner,
    47  exceed  the sum of, (i) the annual operating expenses, (ii) an allowance
    48  for management services as determined by the commissioner, (iii)  actual
    49  annual  mortgage debt service (interest and amortization) on its indebt-
    50  edness to a lending institution, an insurance company, a retirement fund
    51  or welfare fund which is operated under the supervision of  the  banking
    52  or  insurance  laws  of  the state of New York or the United States, and
    53  (iv) eight and one-half percent of that portion of the fair market value
    54  of the property which exceeds the unpaid principal amount of  the  mort-
    55  gage  indebtedness  referred to in subparagraph (iii) of this paragraph.
    56  Fair market value for the purposes of this paragraph shall be six  times

        A. 5700                             3
 
     1  the  annual gross rent. The collection of any increase in the stabilized
     2  rent for any apartment pursuant to this paragraph shall not  exceed  six
     3  percent  in  any  year from the effective date of the order granting the
     4  increase  over  the  rent set forth in the schedule of gross rents, with
     5  collectability of any dollar excess above said sum to be spread  forward
     6  in similar increments and added to the stabilized rent as established or
     7  set in future years;
     8    § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
     9  576  of  the  laws of 1974, constituting the emergency tenant protection
    10  act of nineteen seventy-four, as amended by section  30  of  part  A  of
    11  chapter 20 of the laws of 2015, is amended to read as follows:
    12    (3)  there has been since January first, nineteen hundred seventy-four
    13  a major capital improvement required for the operation, preservation  or
    14  maintenance  of  the structure. An adjustment under this paragraph shall
    15  be in an amount sufficient to amortize  the  cost  of  the  improvements
    16  pursuant to this paragraph over an eight-year period for a building with
    17  thirty-five or fewer housing accommodations, or a nine-year period for a
    18  building  with  more  than  thirty-five  housing accommodations, for any
    19  determination issued by the division of housing  and  community  renewal
    20  after  the  effective  date  of the rent act of 2015[, or].  No landlord
    21  shall deny access to a professional engineer licensed to practice in the
    22  state of New York or a registered architect licensed to practice in  the
    23  state  of  New  York  hired by any tenant, tenants or tenant association
    24  representing tenants of a multiple dwelling of six units or more for the
    25  purpose of conducting an inspection of a major capital  improvement  for
    26  which an application for adjustment of maximum rent has been filed. Such
    27  inspection  shall  be  conducted after notice to the landlord and during
    28  normal business hours. Such tenant may file the report of the inspection
    29  with the city rent agency for consideration in the determination of such
    30  application, or
    31    § 4. This act shall take effect on the one hundred twentieth day after
    32  it shall have become a law, except that any rules and regulations neces-
    33  sary for the timely implementation of this act  on  its  effective  date
    34  shall be promulgated on or before such date; provided that the amendment
    35  to  section  26-405  of  the  city  rent  and rehabilitation law made by
    36  section one of this act shall remain in full force and  effect  only  so
    37  long  as  the  public  emergency requiring the regulation and control of
    38  residential rents and evictions continues, as provided in subdivision  3
    39  of  section  1  of  the  local  emergency  housing  rent control act and
    40  provided further that the  amendment  to  section  26-511  of  the  rent
    41  stabilization  law of nineteen hundred sixty-nine made by section two of
    42  this act shall expire on the same date as such law expires and shall not
    43  affect the expiration of such law as provided under  section  26-520  of
    44  such  law  and  provided  further that the amendment to section 6 of the
    45  emergency tenant protection act of nineteen seventy-four made by section
    46  three of this act shall expire on the same date as such act expires  and
    47  shall not affect the expiration of such act as provided in section 17 of
    48  chapter 576 of the laws of 1974, as amended.
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