Rpld §26-405 sub a ¶9, amd §§26-405 & 26-511, NYC Ad Cd; amd §14, Pub Hous L; amd §4, Emerg Hous Rent Cont L;
amd §302-a, Mult Dwell L; amd §§5 & 6, Emerg Ten Prot Act of 1974; amd §§713 & 732, RPAP L
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).
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.
LBD11064-05-1
S. 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 rent
S. 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 to
S. 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 the
S. 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-
53 months] 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 the
25 clerk of the court in which the action or proceeding is pending at the
26 time of filing of the resident's answer the amount of rent sought to be
27 recovered in the action or upon which the proceeding to recover
28 possession is based, to be held by the clerk of the court until final
29 disposition of the action or proceeding at which time the rent deposited
30 shall be paid to the owner, if the owner prevails, or be returned to the
31 resident if the resident prevails. Such deposit of rent shall vitiate
32 any right on the part of the owner to terminate the lease or rental
33 agreement 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 special
41 proceeding for the recovery of possession because of non-payment of rent
42 it shall appear that the resident has raised a defense under this
43 section in bad faith, or has caused the violation or has refused entry
44 to the owner for the purpose of correcting the condition giving rise to
45 the violation, the court, in its discretion, may impose upon the resi-
46 dent the reasonable costs of the owner, including counsel fees, in main-
47 taining 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 of
S. 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 maintain
20 the 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 in
40 favor 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 enactment
S. 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.
