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A00259 Summary:

COSPNSRTaylor, Davila
Add §238-b, RP L
Establishes security deposit options for certain tenants, including but not limited to, an option to pay any deposit or advance to rent or use residential real property or a dwelling unit.
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A00259 Text:

                STATE OF NEW YORK
                               2023-2024 Regular Sessions
                   IN ASSEMBLY
                                     January 4, 2023
        Introduced  by  M. of A. GONZALEZ-ROJAS -- read once and referred to the
          Committee on Housing
        AN ACT to amend the real property law, in relation to establishing secu-
          rity deposit options for certain tenants
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  The  real property law is amended by adding a new section
     2  238-b to read as follows:
     3    § 238-b. Security deposit. 1.  A  landlord  who  requires  a  security
     4  deposit  to  be  paid  by a tenant which is covered by the provisions of
     5  sections 7-107 and 7-108 of the general obligations law  shall  also  be
     6  required  to  offer  to  accept at least one of the following options in
     7  lieu of such security deposit:
     8    a. Payment of any security deposit over a series of no less  than  six
     9  equal  monthly  installment payments, which installments shall be due on
    10  the same day as the monthly rent payment and which may be paid  together
    11  with the monthly rent payment in a single transaction, absent a separate
    12  agreement between such landlord and tenant;
    13    b.  Payment  of a reduced security deposit which shall be no more than
    14  fifty percent of the amount of one month's rent under such contract; or
    15    c. If such tenant qualifies, payment of any  deposit  pursuant  to  18
    16  NYCRR 352.6.
    17    2.  In  addition  to the options in subdivision one of this section in
    18  lieu of a security deposit, a landlord may accept rental security insur-
    19  ance, defined as a surety bond   or   insurance  policy    issued  by  a
    20  licensed carrier in the state of New York that guarantees or indemnifies
    21  a  tenant  after  default of a   financial   obligation under the rental
    22  agreement. If the landlord wishes to offer or  suggest  rental  security
    23  insurance  that  is provided by itself or a separate company, the rental
    24  security insurance offered must satisfy the following criteria:
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 259                              2
     1    a. the  insurance  provider  is  an approved carrier licensed  by  the
     2  department  of financial services  pursuant  to  article  eleven  of the
     3  insurance law;
     4    b. the  coverage is effective upon the payment of the first premium or
     5  fee and remains effective for the entire lease term;
     6    c. any dispute under the coverage cannot require arbitration and waive
     7  the tenant's right to go to court;
     8    d.  the  amount  paid  by  the  tenant cannot exceed the amount of the
     9  coverage;
    10    e. the tenant cannot be liable  to  the  insurance  provider  for  any
    11  claims paid out to the landlord; and
    12    f.  the  coverage  provided per claim is no less than the amount  such
    13  landlord requires for security deposits.
    14    3. A tenant who elects to provide rental security insurance,  pursuant
    15  to paragraph a of subdivision one of this section, in lieu of a required
    16  security deposit shall not be required to provide additional security or
    17  insurance  coverage  per  claim  in  an  amount  greater than the amount
    18  required for the security deposit.
    19    4. Such landlord shall not impose any additional fees or interest on a
    20  tenant that pays their security deposit in an alternate manner  pursuant
    21  to subdivision one of this section.
    22    5.  Any  agreement  to pay a security deposit in installments shall be
    23  included within such contract, lease or agreement and shall specify  the
    24  total deposit amount due and the amount due for each installment.
    25    6.  Prior  to  entering  into  a contract, lease or rental agreement a
    26  landlord shall provide the tenant written notice of the available  secu-
    27  rity  deposit  alternatives  and  include  the following language: "If a
    28  security deposit is required, tenant has the right to request and  land-
    29  lord is required to accept one of the following three alternatives: a. a
    30  deposit  paid  over  no  less  than six equal monthly installments; b. a
    31  one-time reduced security deposit payment of no more than fifty  percent
    32  of  the  monthly  rental rate charged for the rental unit; or c. if such
    33  tenant qualifies, a  deposit  paid  through  the  department  of  social
    34  services  grant program pursuant to 18 NYCRR 352.6.  Tenant shall not be
    35  required to provide rental security insurance coverage per claim  in  an
    36  amount greater than the amount required for the security deposit".
    37    7.  The  requirements  of  this  section shall be considered source of
    38  income as defined by subdivision thirty-six of section two hundred nine-
    39  ty-two of the executive law and any violation of this section may  be  a
    40  violation of section two hundred ninety-six of the executive law.
    41    §  2.  This  act shall take effect on the thirtieth day after it shall
    42  have become a law. Effective immediately, the addition, amendment and/or
    43  repeal of any rule or regulation necessary  for  the  implementation  of
    44  this  act  on its effective date are authorized to be made and completed
    45  on or before such effective date.
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