A10988 Summary:

Add Title 26 Chap 21 §§26-2101 - 26-2108, NYC Ad Cd
Establishes commercial rent stabilization in the city of New York.
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A10988 Actions:

05/29/2018referred to cities
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A10988 Committee Votes:

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A10988 Floor Votes:

There are no votes for this bill in this legislative session.
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A10988 Text:

                STATE OF NEW YORK
                   IN ASSEMBLY
                                      May 29, 2018
        Introduced by M. of A. MOSLEY -- read once and referred to the Committee
          on Cities
        AN  ACT  to  amend  the  administrative code of the city of New York, in
          relation to the regulation of commercial rents
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section 1. Title 26 of the administrative code of the city of New York
     2  is amended by adding a new chapter 21 to read as follows:
     3                                 CHAPTER 21
     4                        COMMERCIAL RENT STABILIZATION
     5  Section 26-2101 Scope.
     6          26-2102 Definitions.
     7          26-2103 Rental guidelines.
     8          26-2104 Security deposits.
     9          26-2105 Retaliation.
    10          26-2106 Waiver.
    11          26-2107 Manner of service.
    12          26-2108 Inconsistency with other laws.
    13    § 26-2101 Scope. This chapter shall apply only to all commercial lease
    14  renewals for commercial premises. On any occasion wherein a landlord and
    15  tenant  are  required  to  negotiate  the  terms  of a lease renewal for
    16  commercial  uses  the  provisions  of  this  chapter  shall  apply.  The
    17  provisions  of  this  chapter  shall  apply  to any landlord and current
    18  tenant whose lease expired on or after July first,  two  thousand  eigh-
    19  teen.
    20    § 26-2102 Definitions. As used in this chapter:
    21    a.  "Commercial  premises" shall mean a building or space occupied for
    22  non-residential purposes including, but not limited  to,  manufacturing,
    23  retail, professional services, offices, assembling, processing, cultural
    24  and  not-for-profit  entities  that are present in the city of New York,
    25  who have a valid commercial lease.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 10988                            2
     1    b. "Landlord" shall mean any owner, lessor, sublessor or other  person
     2  entitled  to  receive  rent  for  the use or occupancy of any commercial
     3  premises, or an agent thereof.
     4    c.  "Rent"  shall  mean  any  and all consideration, including but not
     5  limited to pass-alongs, received by the landlord in connection with  the
     6  use or occupancy of any commercial premises.
     7    d.  "Tenant"  shall  mean tenant, subtenant, lessee, sublessee, or any
     8  other persons lawfully entitled to use or occupancy  of  any  commercial
     9  premises.
    10    §  26-2103 Rental guidelines. a. The rent guidelines board established
    11  pursuant to section 26-510 of this title shall establish annually guide-
    12  lines for the maximum increase in rent for  a  renewal  of  a  lease  of
    13  commercial premises, and in determining such maximum rent increase shall
    14  consider,  among  other things (1) the economic condition of the commer-
    15  cial real estate industry in the affected area including such factors as
    16  the prevailing and projected (i) real estate taxes and sewer  and  water
    17  rates,  (ii)  gross  operating  maintenance  costs  (including insurance
    18  rates, governmental fees, cost of fuel and labor costs), (iii) costs and
    19  availability of financing (including effective rates of interest),  (iv)
    20  over-all  supply  of commercial premises and over-all vacancy rates, (2)
    21  relevant data from the current and projected cost of  operating  indices
    22  for  the  affected area, (3) such other data as may be made available to
    23  it. Not later than July first of each year, the  rent  guidelines  board
    24  shall  file  with the city clerk its findings for the preceding calendar
    25  year, and shall accompany such findings with a statement of the  maximum
    26  increase  in rent for a renewal of a lease, if any, for commercial prem-
    27  ises subject to this law, authorized for leases or other  rental  agree-
    28  ments  commencing  on  the  next  succeeding October first or within the
    29  twelve months thereafter. Such findings and statement shall be published
    30  in the City Record.
    31    b. All leases of a commercial premises may be renewed at the option of
    32  a tenant who did not lose the right to renew a lease under  the  grounds
    33  described in subdivision c of this section.
    34    c.  A tenant shall lose the right of renewal and a landlord may refuse
    35  to renew a lease only on the following grounds:
    36    (1) The tenant has persistently delayed rent payments  without  cause.
    37  For the purpose of this subdivision, "cause" is defined as the withhold-
    38  ing  of  rental  payments by the tenant due to the alleged violations of
    39  the rental agreement by the landlord.  In order for the landlord  to  be
    40  excused  from  renewal on this ground, the landlord must have served the
    41  tenant at least three prior notices during the term of the lease to  the
    42  tenant  for demand of payment within thirty days, and then show that the
    43  lessee has not paid within such thirty day period.  The  landlord  shall
    44  not serve such notice unless the rent payment was in arrears for a mini-
    45  mum of fifteen days;
    46    (2)  The tenant uses the commercial premises in a manner substantially
    47  different from that described in the lease;
    48    (3) The tenant conducts or permits any form of illegal activity on the
    49  premises;
    50    (4) The tenant has substantially breached any  substantive  obligation
    51  under the current lease and has failed to cure such breach within thirty
    52  days following written notice to cure by the landlord;
    53    (5) Upon the termination of the current tenancy, the landlord intends,
    54  in  good faith, to demolish or substantially reconstruct the premises or
    55  a substantial  part  thereof,  or  to  carry  out  substantial  work  or
    56  construction  on  the  commercial  premises  or substantial part thereof

        A. 10988                            3
     1  which he or she could not reasonably do without obtaining possession  of
     2  the  commercial premises. The landlord shall notify the tenant of his or
     3  her decision to reoccupy the commercial premises at least one year prior
     4  to  the  termination  of the lease. In the event that the lessor fraudu-
     5  lently invokes this justification for a refusal to  renew  a  commercial
     6  lease,  the  defrauded  tenant  may  collect treble damages for any loss
     7  suffered as a result of such action;
     8    (6) The current tenancy was created by the subletting of the property,
     9  whereby the prime tenant did not notify the landlord by  certified  mail
    10  of  the  subtenant's existence and did not obtain the written consent of
    11  the landlord. This ground is void if the landlord and tenant had  agreed
    12  in the lease to allow subleasing rights without the consent of the land-
    13  lord  and  all  obligations  of  the  prime tenant on the issue, were in
    14  compliance;
    15    (7) It has been determined by the rent guidelines board or by a  civil
    16  court  of competent jurisdiction that the tenant is a gross and persist-
    17  ent violator of New York city  tax  laws,  of  any  license  obligations
    18  related  to  the  use  of the premises or of any laws of the city of New
    19  York;
    20    (8) Upon the termination of the current tenancy, the landlord  intends
    21  to  occupy  the  retail premises in order to carry out its own business,
    22  which cannot be the same type of business that  the  current  tenant  is
    23  operating,  unless  the  landlord  compensates the tenant at fair market
    24  value as determined by an arbitrator as restitution for the loss of such
    25  tenant's business. The landlord shall notify the tenant of  his  or  her
    26  decision to reoccupy the premises at least one hundred eighty days prior
    27  to  the termination of the lease. In the event that the landlord fraudu-
    28  lently invokes this justification for a refusal to  renew  a  commercial
    29  lease,  the  defrauded  tenant  may  collect treble damages for any loss
    30  suffered as a result of such action.
    31    § 26-2104 Security deposits. Security deposits  shall  not  exceed  an
    32  amount  equal  to two months rent. All security deposits shall be placed
    33  in escrow in an interest-bearing account at  a  federally  insured  bank
    34  located  in  New  York state. The tenant shall be notified in writing of
    35  the location of such escrow account. Interest paid on the account  shall
    36  be  paid in full to the tenant upon termination of the lease. The amount
    37  of interest paid to the tenant shall equal the  interest  paid  by  such
    38  federally  insured  bank less one percent for the landlord's administra-
    39  tive costs.
    40    § 26-2105 Retaliation. No landlord shall in any way retaliate  against
    41  any  tenant  for  the tenant's assertion or exercise of any rights under
    42  this chapter. Any such retaliation may subject the landlord  to  a  suit
    43  for actual and punitive damages, injunctive relief, and attorney's fees.
    44    §  26-2106  Waiver.  No  provision  in any lease, rental agreement, or
    45  agreement made in connection therewith which waives  or  diminishes  any
    46  right of tenant under this chapter is valid.
    47    §  26-2107  Manner  of  service.  All papers and notices which, by the
    48  terms of this chapter are required to be served, shall be  served  by  a
    49  process server, or shall be sent by first class mail and certified mail,
    50  return receipt requested or by any express mail service.
    51    §  26-2108  Inconsistency  with other laws. In the event of any incon-
    52  sistency with any other laws of the city of New  York,  this  law  shall
    53  take precedence.
    54    § 2. Severability. If any clause, sentence, paragraph, section or part
    55  of  this act shall be adjudged by any court of competent jurisdiction to
    56  be invalid and after exhaustion of  all  further  judicial  review,  the

        A. 10988                            4
     1  judgment  shall  not affect, impair or invalidate the remainder thereof,
     2  but shall be confined in its operation to the  clause,  sentence,  para-
     3  graph,  section or part of this act directly involved in the controversy
     4  in which the judgment shall have been rendered.
     5    § 3. This act shall take effect on the one hundred eightieth day after
     6  it shall have become a law.
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