A08506 Summary:

BILL NOA08506
 
SAME ASSAME AS S08011
 
SPONSORRosenthal L
 
COSPNSR
 
MLTSPNSR
 
Amd §26-511, NYC Ad Cd; amd §§10-b & 5, Emerg Ten Prot Act of 1974; amd Part B §§2 & 3, add §2-a, Chap of 2023 (as proposed in S.2980-C & A.6216-B)
 
Establishes the legal regulated rent for the combination of two or more vacant apartments; relates to exemptions from rent stabilization on the basis of substantial rehabilitation; relates to clearly defining the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents and relates to the effectiveness thereof.
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A08506 Actions:

BILL NOA08506
 
01/04/2024referred to housing
01/17/2024reported referred to codes
01/23/2024reported
01/25/2024advanced to third reading cal.276
01/29/2024substituted by s8011
 S08011 AMEND= KAVANAGH
 01/05/2024REFERRED TO RULES
 01/08/2024ORDERED TO THIRD READING CAL.20
 01/09/2024PASSED SENATE
 01/09/2024DELIVERED TO ASSEMBLY
 01/09/2024referred to housing
 01/29/2024substituted for a8506
 01/29/2024ordered to third reading cal.276
 02/13/2024passed assembly
 02/13/2024returned to senate
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A08506 Committee Votes:

HOUSING Chair:Rosenthal L DATE:01/17/2024AYE/NAY:16/8 Action: Favorable refer to committee Codes
RosenthalAyeFitzpatrickExcused
CookAyeByrnesNay
KimExcusedBrown K Nay
WalkerAyeGallahanNay
Bichotte HermelAyeBrown EANay
DavilaExcusedBrook-KrasnyNay
TaylorAyeChangNay
EpsteinAyeNovakhovNay
EichensteinNay
MeeksAye
BurdickAye
RiveraAye
JacksonAye
KellesAye
TapiaAye
LucasAye
Chandler-WatermAye
LeeAye
LevenbergAye

CODES Chair:Dinowitz DATE:01/23/2024AYE/NAY:15/7 Action: Favorable
DinowitzAyeMorinelloNay
PretlowAyeReillyNay
CookAyeMikulinNay
O'DonnellAyeTannousisNay
LavineAyeCurranNay
WeprinAyeAngelinoNay
HevesiAyeFloodNay
SeawrightAye
RosenthalAye
WalkerAye
VanelAye
CruzAye
CarrollAye
SimonAye
EpsteinAye

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A08506 Floor Votes:

There are no votes for this bill in this legislative session.
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A08506 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8506
 
SPONSOR: Rosenthal L
  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 establishing the legal regulated rent for the combination of two or more vacant apartments; to amend the emergency tenant protection act of nine- teen seventy-four, in relation to exemptions from rent stabilization on the basis of substantial rehabilitation; to define clearly the scope of the fraud exception to the pre-HSTPA four-year rule for calculating rents; and to amend part B of a chapter of the laws of 2023 relating to defining clearly the scope of the fraud exception to the pre-HSTPA four- year rule for calculating rents, as proposed in legislative bills numbers S. 2980-C and A. 6216-B, in relation to claims of fraudulent schemes and determination relating thereto and in relation to the effec- tiveness thereof   PURPOSE OR GENERAL IDEA OF BILL:. The purpose of this bill is to make amendments to Chapter 760 of the Laws of 2023.   SUMMARY OF PROVISIONS: Section one of the bill amends parameters within the rent stabilization law for setting a new legal regulated rent when a regulated unit has been combined with regulated or unregulated unit(s) to remove a provision that required when vacant units are altered pursuant to a regulatory agreement, the initial rent cannot be higher than how the initial rent would have otherwise been calculated. Section two of the bill amends parameters within the emergency tenant protection act for setting a new legal regulated rent when a regulated unit has been combined with regulated or unregulated unit(s) to remove a provision that required when vacant units are altered pursuant to a regulatory agreement, the initial rent cannot be higher than how the initial rent would have otherwise been calculated. Section three of the bill amends the emergency tenant protection act to clarify that an owner claiming exemption from rent stabilization on the basis of a substantial rehabilitation, where the work for such rehabili- tation was initiated on or after 1/1/24, shall seek approval from the division of housing and community renewal within one year of the completion of the substantial rehabilitation and provides that DHCR may deny approval of deregulated units due to substantial rehabilitation on any additional grounds as set forth in regulations. Section four of the bill clarifies the fraud exception to the look back period in overcharge cases by providing that when a colorable claim that an owner has engaged in a fraudulent scheme to deregulate a unit is properly raised before a court of competent jurisdiction or the DHCR, a court of competent jurisdiction or the DHCR shall issue a determination as to whether the owner knowingly engaged in such fraudulent scheme after a consideration of the totality of the circumstances. Section five of the bill amends the prior effective date to clarify the fraud exception applies to pending actions and proceedings. Section six of the bill relates to the effective date.   JUSTIFICATION: The Housing Stability and Tenant Protection Act of 2019 (HSTPA) trans- formed and strengthened many of the state's laws that protect tenants and provide housing stability. This bill seeks to address certain gaps in these laws that persist after that landmark legislation in the vari- ous ways detailed in the summary of provisions above and to make some technical corrections.   PRIOR LEGISLATIVE HISTORY: This is a new bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be determined.   EFFECTIVE DATE: This act shall take effect immediately; provided, however that sections one, two, and three of this act shall take effect on the same date and in the same manner as part A of a chapter of the laws of 2023 amending the administrative code of the city of New York and the emergency tenant protection act of nineteen seventy-four relating to establishing the legal regulated rent for the combination of two or more vacant apart- ments, as proposed in legislative bills numbers S. 2980C and A. 6216-B, takes effect; and provided further, however, that sections four and five of this act shall take effect on the same date and in the same manner as part B of a chapter of the laws of 2023 relating to defining clearly the scope of the fraud exception to the pre-HSTPA four-year rule for calcu- lating rents, as proposed in legislative bills numbers S. 2980-C and A. 6216-B, takes effect; and provided further, however, that the amendments to section 26-511 of chapter 4 of title 26 of the administrative code of the city of New York made by section one of this act shall expire on the same date as such law expires and shall not affect the expiration of such law provided under section 26-520 of such law.
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A08506 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8506
 
                   IN ASSEMBLY
 
                                     January 4, 2024
                                       ___________
 
        Introduced  by  M.  of  A. L. ROSENTHAL -- 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 establishing the legal regulated rent for the combination of two or
          more vacant apartments; to amend the emergency tenant  protection  act
          of nineteen seventy-four, in relation to exemptions from rent stabili-
          zation  on  the basis of substantial rehabilitation; to define clearly
          the scope of the fraud exception to the pre-HSTPA four-year  rule  for
          calculating  rents;  and  to  amend part B of a chapter of the laws of
          2023 relating to defining clearly the scope of the fraud exception  to
          the  pre-HSTPA  four-year  rule  for calculating rents, as proposed in
          legislative bills numbers S. 2980-C and  A.  6216-B,  in  relation  to
          claims of fraudulent schemes and determination relating thereto and in
          relation to the effectiveness thereof
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subparagraph (d)  of  paragraph  15  of  subdivision  c  of
     2  section  26-511  of  the administrative code of the city of New York, as
     3  added by part A of a chapter of the laws of 2023 amending  the  adminis-
     4  trative code of the city of New York and the emergency tenant protection
     5  act  of  nineteen  seventy-four relating to establishing the legal regu-
     6  lated rent for the combination of two  or  more  vacant  apartments,  as
     7  proposed  in  legislative  bills  numbers  S.  2980-C  and A. 6216-B, is
     8  amended to read as follows:
     9    (d) where the vacant housing accommodations  are  combined,  modified,
    10  divided or the dimension of such housing accommodation otherwise altered
    11  and  these  changes are being made pursuant to a preservation regulatory
    12  agreement with a federal, state or local governmental agency or  instru-
    13  mentality,  the  rent stabilized rents charged thereafter shall be based
    14  on an initial rent set by such agency or instrumentality[, provided such
    15  initial rent shall not be higher than if the initial rent was calculated
    16  in accordance with subparagraphs (a), (b), (e)  or  (f)  of  this  para-
    17  graph].
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07250-13-4

        A. 8506                             2
 
     1    §  2.  Subparagraph (iv) of paragraph 13 of subdivision (a) of section
     2  10-b of section 4 of chapter 576 of the laws of 1974,  constituting  the
     3  emergency  tenant  protection  act of nineteen seventy-four, as added by
     4  part A of a chapter of the laws of 2023 amending the administrative code
     5  of the city of New York and the emergency tenant protection act of nine-
     6  teen  seventy-four relating to establishing the legal regulated rent for
     7  the combination of two or more vacant apartments, as proposed in  legis-
     8  lative  bills  numbers  S.  2980-C  and A. 6216-B, is amended to read as
     9  follows:
    10    (iv) where the vacant housing accommodations are  combined,  modified,
    11  divided or the dimension of such housing accommodation otherwise altered
    12  and  these  changes are being made pursuant to a preservation regulatory
    13  agreement with a federal, state or local governmental agency or  instru-
    14  mentality,  the  rent stabilized rents charged thereafter shall be based
    15  on an initial rent set by such agency or instrumentality[, provided such
    16  initial rent shall not be higher than if the initial rent was calculated
    17  in accordance with subparagraphs (i), (ii), (v) or (vi)  of  this  para-
    18  graph].
    19    § 3. Paragraph 5 of subdivision a of section 5 of section 4 of chapter
    20  576  of  the  laws of 1974, constituting the emergency tenant protection
    21  act of nineteen seventy-four, as amended by part A of a chapter  of  the
    22  laws  of  2023  amending the administrative code of the city of New York
    23  and the emergency tenant protection act of nineteen seventy-four  relat-
    24  ing  to establishing the legal regulated rent for the combination of two
    25  or more vacant apartments, as proposed in legislative bills  numbers  S.
    26  2980-C and A. 6216-B, is amended to read as follows:
    27    (5)   housing  accommodations  in  buildings  completed  or  buildings
    28  substantially rehabilitated as family units on or after  January  first,
    29  nineteen hundred seventy-four; provided that an owner claiming exemption
    30  from  rent  stabilization  on the basis of a substantial rehabilitation,
    31  where the work for such rehabilitation was initiated  on  or  after  the
    32  first day of January, two thousand twenty-four, shall seek approval from
    33  state  division  of housing and community renewal within one year of the
    34  completion of the  substantial  rehabilitation,  [or  for  any  building
    35  previously  alleged  to have been substantially rehabilitated before the
    36  effective date of the chapter of the laws of two  thousand  twenty-three
    37  that  amended this paragraph, within six months of such effective date,]
    38  and ultimately obtain such  approval,  which  shall  be  denied  on  the
    39  following grounds:
    40    (a)  the owner or its predecessors in interest have engaged in harass-
    41  ment of tenants in the  five  years  preceding  the  completion  of  the
    42  substantial rehabilitation;
    43    (b)  the  building  was not in a substandard or seriously deteriorated
    44  condition requiring substantial rehabilitation; or
    45    (c) any additional grounds as set forth by regulation;
    46    § 4. Section 2 of part B of a chapter of the laws of 2023 relating  to
    47  defining clearly the scope of the fraud exception to the pre-HSTPA four-
    48  year  rule  for  calculating  rents,  as  proposed  in legislative bills
    49  numbers S. 2980-C and A. 6216-B, is amended, and a new  section  2-a  is
    50  added to read as follows:
    51    §  2.  [(a)] Nothing in this act, or the HSTPA, or prior law, shall be
    52  construed as restricting, impeding or diminishing the use of records  of
    53  any  age  or  type,  going  back  to  any date that may be relevant, for
    54  purposes of determining the status  of  any  apartment  under  the  rent
    55  stabilization law[;

        A. 8506                             3

     1    (b)  With  respect  to  the  calculation of legal rents for the period
     2  either prior to or subsequent to June 14, 2019, an owner shall be deemed
     3  to have committed fraud if the owner shall  have  committed  a  material
     4  breach  of  any  duty, arising under statutory, administrative or common
     5  law, to disclose truthfully to any tenant, government agency or judicial
     6  or administrative tribunal, the rent, regulatory status, or lease infor-
     7  mation,  for  purposes  of claiming an unlawful rent or claiming to have
     8  deregulated an apartment, whether or not the owner's  conduct  would  be
     9  considered  fraud under the common law, and whether or not a complaining
    10  tenant specifically relied on untruthful  or  misleading  statements  in
    11  registrations,  leases,  or other documents. The following conduct shall
    12  be presumed to have been the product of such  fraud:  (1)  the  unlawful
    13  deregulation  of  any  apartment, including such deregulation as results
    14  from claiming an unlawful increase such as would have brought  the  rent
    15  over the deregulation threshold that existed under prior law, unless the
    16  landlord  can  prove  good faith reliance on a directive or ruling by an
    17  administrative agency or court; or (2) beginning October 1, 2011,  fail-
    18  ing to register, as rent stabilized, any apartment in a building receiv-
    19  ing  J-51 or 421-a benefits.] or for such other purposes permitted under
    20  law or the regulations of the New York State  division  of  housing  and
    21  community renewal.
    22    §  2-a.  When a colorable claim that an owner has engaged in a fraudu-
    23  lent scheme to deregulate a  unit  is  properly  raised  as  part  of  a
    24  proceeding  before  a court of competent jurisdiction or the state divi-
    25  sion of housing and community renewal, a court of competent jurisdiction
    26  or the state division of housing and community  renewal  shall  issue  a
    27  determination  as to whether the owner knowingly engaged in such fraudu-
    28  lent scheme after a consideration of the totality of the  circumstances.
    29  In  making  such determination, the court or the division shall consider
    30  all of the relevant facts and all applicable  statutory  and  regulatory
    31  law and controlling authorities, provided that there need not be a find-
    32  ing  that all of the elements of common law fraud, including evidence of
    33  a misrepresentation of material fact, falsity,  scienter,  reliance  and
    34  injury,  were  satisfied in order to make a determination that a fraudu-
    35  lent scheme to deregulate a unit was committed if the  totality  of  the
    36  circumstances nonetheless indicate that such fraudulent scheme to dereg-
    37  ulate a unit was committed.
    38    § 5.  Section 3 of part B of a chapter of the laws of 2023 relating to
    39  defining clearly the scope of the fraud exception to the pre-HSTPA four-
    40  year  rule  for  calculating  rents,  as  proposed  in legislative bills
    41  numbers S. 2980-C and A. 6216-B, is amended to read as follows:
    42    § 3. This act shall take effect immediately and  shall  apply  to  any
    43  action  or  proceeding  in  any  court  or any application, complaint or
    44  proceeding before an administrative agency on the effective date of this
    45  act.
    46    § 6. This act shall take effect immediately;  provided,  however  that
    47  sections  one,  two, and three of this act shall take effect on the same
    48  date and in the same manner as part A of a chapter of the laws  of  2023
    49  amending  the  administrative code of the city of New York and the emer-
    50  gency tenant protection act of nineteen seventy-four relating to  estab-
    51  lishing  the  legal  regulated  rent  for the combination of two or more
    52  vacant apartments, as proposed in legislative bills  numbers  S.  2980-C
    53  and  A.  6216-B,  takes  effect;  and  provided  further,  however, that
    54  sections four and five of this act shall take effect on  the  same  date
    55  and in the same manner as part B of a chapter of the laws of 2023 relat-
    56  ing  to  defining  clearly  the  scope  of  the  fraud  exception to the

        A. 8506                             4
 
     1  pre-HSTPA four-year rule for calculating rents, as proposed in  legisla-
     2  tive  bills  numbers S. 2980-C and A. 6216-B, takes effect; and provided
     3  further, however, that the amendments to section 26-511 of chapter 4  of
     4  title  26  of  the  administrative  code of the city of New York made by
     5  section one of this act shall expire  on  the  same  date  as  such  law
     6  expires  and  shall not affect the expiration of such law provided under
     7  section 26-520 of such law.
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A08506 LFIN:

 NO LFIN
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A08506 Chamber Video/Transcript:

1-29-24Video (@ 01:31:22)Transcript pdf Transcript html
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