Amd §§26-405 & 26-511, NYC Ad Cd; amd §6, Emerg Ten Prot Act of 1974; amd §4, Emerg Hous Rent Cont L
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 or the state division of housing and community renewal for consideration in such application's determination.
STATE OF NEW YORK
________________________________________________________________________
1886
2025-2026 Regular Sessions
IN ASSEMBLY
January 14, 2025
___________
Introduced by M. of A. ROSENTHAL, RAGA, TAYLOR -- read once and referred
to the Committee on Housing
AN ACT to amend the administrative code of the city of New York, the
emergency tenant protection act of nineteen seventy-four and the emer-
gency housing rent control law, 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 of chapter 39 of the laws of 2019, is amended to
4 read 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, 2019 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.
LBD04468-01-5
A. 1886 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 for the
15 purpose of conducting an inspection of a major capital improvement for
16 which an application for adjustment of maximum rent has been filed. Such
17 inspection shall be conducted after notice to the landlord and during
18 normal business hours. Such tenant may file the report of the inspection
19 with the city rent agency for consideration in the determination of such
20 application. Notwithstanding any other provision of the law, for any
21 renewal lease commencing on or after June 14, 2019, the collection of
22 any rent increases due to any major capital improvements approved on or
23 after June 16, 2012 and before June 16, 2019 shall not exceed two
24 percent in any year for any tenant in occupancy on the date the major
25 capital improvement was approved, or
26 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
27 tive code of the city of New York, as separately amended by section 12
28 of part K of chapter 36 and section 28 of part Q of chapter 39 of the
29 laws of 2019, is amended to read as follows:
30 (6) provides criteria whereby the commissioner may act upon applica-
31 tions by owners for increases in excess of the level of fair rent
32 increase established under this law provided, however, that such crite-
33 ria shall provide (a) as to hardship applications, for a finding that
34 the level of fair rent increase is not sufficient to enable the owner to
35 maintain approximately the same average annual net income (which shall
36 be computed without regard to debt service, financing costs or manage-
37 ment fees) for the three year period ending on or within six months of
38 the date of an application pursuant to such criteria as compared with
39 annual net income, which prevailed on the average over the period nine-
40 teen hundred sixty-eight through nineteen hundred seventy, or for the
41 first three years of operation if the building was completed since nine-
42 teen hundred sixty-eight or for the first three fiscal years after a
43 transfer of title to a new owner provided the new owner can establish to
44 the satisfaction of the commissioner that [he or she] they acquired
45 title to the building as a result of a bona fide sale of the entire
46 building and that the new owner is unable to obtain requisite records
47 for the fiscal years nineteen hundred sixty-eight through nineteen
48 hundred seventy despite diligent efforts to obtain same from predeces-
49 sors in title and further provided that the new owner can provide finan-
50 cial data covering a minimum of six years under [his or her] their
51 continuous and uninterrupted operation of the building to meet the three
52 year to three year comparative test periods herein provided; and (b) as
53 to completed building-wide major capital improvements, for a finding
54 that such improvements are deemed depreciable under the Internal Revenue
55 Code and that the cost is to be amortized over a twelve-year period for
56 a building with thirty-five or fewer housing accommodations, or a twelve
A. 1886 3
1 and one-half-year period for a building with more than thirty-five hous-
2 ing accommodations, for any determination issued by the division of
3 housing and community renewal after [the effective date of the the chap-
4 ter of the laws of two thousand nineteen that amended this paragraph]
5 June 14, 2019 and shall be removed from the legal regulated rent thirty
6 years from the date the increase became effective inclusive of any
7 increases granted by the applicable rent guidelines board. Temporary
8 major capital improvement increases shall be collectible prospectively
9 on the first day of the first month beginning sixty days from the date
10 of mailing notice of approval to the tenant. Such notice shall disclose
11 the total monthly increase in rent and the first month in which the
12 tenant would be required to pay the temporary increase. An approval for
13 a temporary major capital improvement increase shall not include retro-
14 active payments. The collection of any increase shall not exceed two
15 percent in any year from the effective date of the order granting the
16 increase over the rent set forth in the schedule of gross rents, with
17 collectability of any dollar excess above said sum to be spread forward
18 in similar increments and added to the rent as established or set in
19 future years. Upon vacancy, the landlord may add any remaining balance
20 of the temporary major capital improvement increase to the legal regu-
21 lated rent. No landlord shall deny access to a professional engineer
22 licensed to practice in the state of New York or a registered architect
23 licensed to practice in the state of New York hired by any tenant,
24 tenants or tenant association representing tenants for the purpose of
25 conducting an inspection of a major capital improvement for which an
26 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 state division of housing and community renewal for consider-
30 ation in the determination of such application. Notwithstanding any
31 other provision of the law, for any renewal lease commencing on or after
32 June 14, 2019, the collection of any rent increases due to any major
33 capital improvements approved on or after June 16, 2012 and before June
34 16, 2019 shall not exceed two percent in any year for any tenant in
35 occupancy on the date the major capital improvement was approved or
36 based upon cash purchase price exclusive of interest or service charges.
37 Where an application for a temporary major capital improvement increase
38 has been filed, a tenant shall have sixty days from the date of mailing
39 of a notice of a proceeding in which to answer or reply. The state divi-
40 sion of housing and community renewal shall provide any responding
41 tenant with the reasons for the division's approval or denial of such
42 application. Notwithstanding anything to the contrary contained herein,
43 no hardship increase granted pursuant to this paragraph shall, when
44 added to the annual gross rents, as determined by the commissioner,
45 exceed the sum of, (i) the annual operating expenses, (ii) an allowance
46 for management services as determined by the commissioner, (iii) actual
47 annual mortgage debt service (interest and amortization) on its indebt-
48 edness to a lending institution, an insurance company, a retirement fund
49 or welfare fund which is operated under the supervision of the banking
50 or insurance laws of the state of New York or the United States, and
51 (iv) eight and one-half percent of that portion of the fair market value
52 of the property which exceeds the unpaid principal amount of the mort-
53 gage indebtedness referred to in subparagraph (iii) of this paragraph.
54 Fair market value for the purposes of this paragraph shall be six times
55 the annual gross rent. The collection of any increase in the stabilized
56 rent for any apartment pursuant to this paragraph shall not exceed six
A. 1886 4
1 percent in any year from the effective date of the order granting the
2 increase over the rent set forth in the schedule of gross rents, with
3 collectability of any dollar excess above said sum to be spread forward
4 in similar increments and added to the stabilized rent as established or
5 set in future years;
6 § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
7 576 of the laws of 1974, constituting the emergency tenant protection
8 act of nineteen seventy-four, as amended by section 26 of part Q of
9 chapter 39 of the laws of 2019, is amended to read as follows:
10 (3) there has been since January first, nineteen hundred seventy-four
11 a major capital improvement essential for the preservation, energy effi-
12 ciency, functionality, or infrastructure of the entire building,
13 improvement of the structure including heating, windows, plumbing and
14 roofing, but shall not be for operation costs or unnecessary cosmetic
15 improvements. An adjustment under this paragraph shall be in an amount
16 sufficient to amortize the cost of the improvements pursuant to this
17 paragraph over a twelve-year period for a building with thirty-five or
18 fewer housing accommodations, or a twelve and one-half period for a
19 building with more than thirty-five housing accommodations and shall be
20 removed from the legal regulated rent thirty years from the date the
21 increase became effective inclusive of any increases granted by the
22 applicable rent guidelines board, for any determination issued by the
23 division of housing and community renewal after [the effective date of
24 the chapter of the laws of two thousand nineteen that amended this para-
25 graph] June 14, 2019. Temporary major capital improvement increases
26 shall be collectable prospectively on the first day of the first month
27 beginning sixty days from the date of mailing notice of approval to the
28 tenant. Such notice shall disclose the total monthly increase in rent
29 and the first month in which the tenant would be required to pay the
30 temporary increase. An approval for a temporary major capital improve-
31 ment increase shall not include retroactive payments. The collection of
32 any increase shall not exceed two percent in any year from the effective
33 date of the order granting the increase over the rent set forth in the
34 schedule of gross rents, with collectability of any dollar excess above
35 said sum to be spread forward in similar increments and added to the
36 rent as established or set in future years. Upon vacancy, the landlord
37 may add any remaining balance of the temporary major capital improvement
38 increase to the legal regulated rent. No landlord shall deny access to
39 a professional engineer licensed to practice in the state of New York or
40 a registered architect licensed to practice in the state of New York
41 hired by any tenant, tenants or tenant association representing tenants
42 for the purpose of conducting an inspection of a major capital improve-
43 ment for which an application for adjustment of maximum rent has been
44 filed. Such inspection shall be conducted after notice to the landlord
45 and during normal business hours. Such tenant may file the report of the
46 inspection with the state division of housing and community renewal for
47 consideration in the determination of such application. Notwithstanding
48 any other provision of the law, the collection of any rent increases for
49 any renewal lease commencing on or after June 14, 2019, due to any major
50 capital improvements approved on or after June 16, 2012 and before June
51 16, 2019 shall not exceed two percent in any year for any tenant in
52 occupancy on the date the major capital improvement was approved, or
53 § 4. Subparagraph 7 of the second undesignated paragraph of para-
54 graph (a) of subdivision 4 of section 4 of chapter 274 of the laws
55 of 1946, constituting the emergency housing rent control law as sepa-
A. 1886 5
1 rately amended by section 14 of part K of chapter 36 and section 25 of
2 part Q of chapter 39 of the laws of 2019, is amended to read as follows:
3 (7) there has been since March first, nineteen hundred fifty, a major
4 capital improvement essential for the preservation, energy efficiency,
5 functionality, or infrastructure of the entire building, improvement of
6 the structure including heating, windows, plumbing and roofing, but
7 shall not be for operational costs or unnecessary cosmetic improvements;
8 which for any order of the commissioner issued after [the effective date
9 of the chapter of the laws of two thousand nineteen that amended this
10 paragraph] June 14, 2019 the cost of such improvement shall be amortized
11 over a twelve-year period for buildings with thirty-five or fewer units
12 or a twelve and one-half year period for buildings with more than thir-
13 ty-five units, and shall be removed from the legal regulated rent thirty
14 years from the date the increase became effective inclusive of any
15 increases granted by the applicable rent guidelines board. Temporary
16 major capital improvement increases shall be collectible prospectively
17 on the first day of the first month beginning sixty days from the date
18 of mailing notice of approval to the tenant. Such notice shall disclose
19 the total monthly increase in rent and the first month in which the
20 tenant would be required to pay the temporary increase. An approval for
21 a temporary major capital improvement increase shall not include retro-
22 active payments. The collection of any increase shall not exceed two
23 percent in any year from the effective date of the order granting the
24 increase over the rent set forth in the schedule of gross rents, with
25 collectability of any dollar excess above said sum to be spread forward
26 in similar increments and added to the rent as established or set in
27 future years. Upon vacancy, the landlord may add any remaining balance
28 of the temporary major capital improvement increase to the legal regu-
29 lated rent. No landlord shall deny access to a professional engineer
30 licensed to practice in the state of New York or a registered architect
31 licensed to practice in the state of New York hired by any tenant,
32 tenants or tenant association representing tenants for the purpose of
33 conducting an inspection of a major capital improvement for which an
34 application for adjustment of maximum rent has been filed. Such
35 inspection shall be conducted after notice to the landlord and during
36 normal business hours. Such tenant may file the report of the inspection
37 with the state division of housing and community renewal for consider-
38 ation in the determination of such application. Notwithstanding any
39 other provision of the law, for any renewal lease commencing on or after
40 June 14, 2019, the collection of any rent increases due to any major
41 capital improvements approved on or after June 16, 2012 and before June
42 16, 2019 shall not exceed two percent in any year for any tenant in
43 occupancy on the date the major capital improvement was approved;
44 provided, however, where an application for a temporary major capital
45 improvement increase has been filed, a tenant shall have sixty days from
46 the date of mailing of a notice of a proceeding in which to answer or
47 reply. The state division of housing and community renewal shall provide
48 any responding tenant with the reasons for the division's approval or
49 denial of such application; or
50 § 5. This act shall take effect on the one hundred twentieth day
51 after it shall have become a law; provided, however, that the amendments
52 to section 26-405 of the city rent and rehabilitation law made by
53 section one of this act shall remain in full force and effect only so
54 long as the public emergency requiring the regulation and control of
55 residential rents and evictions continues, as provided in subdivision 3
56 of section 1 of the local emergency housing rent control act; and
A. 1886 6
1 provided further that the amendments to section 26-511 of the rent
2 stabilization law of nineteen hundred sixty-nine made by section two of
3 this act shall expire on the same date as such law expires and shall not
4 affect the expiration of such law as provided under section 26-520 of
5 such law. Effective immediately, the addition, amendment and/or repeal
6 of any rule and regulation necessary for the implementation of this act
7 on its effective date are authorized to be made on or before such effec-
8 tive date.
