Bill Text: NY A04711 | 2023-2024 | General Assembly | Amended

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Bill Title: 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.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2024-05-28 - reported referred to rules [A04711 Detail]

Download: New_York-2023-A04711-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         4711--A

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    February 22, 2023
                                       ___________

        Introduced  by  M. of A. L. ROSENTHAL, RAGA -- read once and referred to
          the Committee on Housing -- recommitted to the Committee on Housing in
          accordance with Assembly Rule 3, sec. 2 -- committee discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee

        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-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07976-02-4
        A. 4711--A                          2

     1  rary  major  capital improvement increases shall be collectible prospec-
     2  tively on the first day of the first month beginning sixty days from the
     3  date of mailing notice of approval to  the  tenant.  Such  notice  shall
     4  disclose the total monthly increase in rent and the first month in which
     5  the  tenant would be required to pay the temporary increase. An approval
     6  for a temporary major capital improvement  increase  shall  not  include
     7  retroactive  payments.  The  collection of any increase shall not exceed
     8  two percent in any year from the effective date of  the  order  granting
     9  the  increase  over  the  rent set forth in the schedule of gross rents,
    10  with collectability of any dollar excess above said  sum  to  be  spread
    11  forward  in  similar  increments and added to the rent as established or
    12  set in future years.  Upon vacancy, the landlord may add  any  remaining
    13  balance of the temporary major capital improvement increase to the legal
    14  regulated  rent.   No landlord shall deny access to a professional engi-
    15  neer licensed to practice in the state  of  New  York  or  a  registered
    16  architect  licensed  to  practice  in the state of New York hired by any
    17  tenant, tenants or  tenant  association  representing  tenants  for  the
    18  purpose  of  conducting an inspection of a major capital improvement for
    19  which an application for adjustment of maximum rent has been filed. Such
    20  inspection shall be conducted after notice to the  landlord  and  during
    21  normal business hours. Such tenant may file the report of the inspection
    22  with the city rent agency for consideration in the determination of such
    23  application.  Notwithstanding  any  other  provision of the law, for any
    24  renewal lease commencing on or after June 14, 2019,  the  collection  of
    25  any  rent increases due to any major capital improvements approved on or
    26  after June 16, 2012 and before  June  16,  2019  shall  not  exceed  two
    27  percent  in  any  year for any tenant in occupancy on the date the major
    28  capital improvement was approved, or
    29    § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
    30  tive code of the city of New York, as separately amended by  section  12
    31  of  part  K  of chapter 36 and section 28 of part Q of chapter 39 of the
    32  laws of 2019, is amended to read as follows:
    33    (6) provides criteria whereby the commissioner may act  upon  applica-
    34  tions  by  owners  for  increases  in  excess  of the level of fair rent
    35  increase established under this law provided, however, that such  crite-
    36  ria  shall  provide  (a) as to hardship applications, for a finding that
    37  the level of fair rent increase is not sufficient to enable the owner to
    38  maintain approximately the same average annual net income  (which  shall
    39  be  computed  without regard to debt service, financing costs or manage-
    40  ment fees) for the three year period ending on or within six  months  of
    41  the  date  of  an application pursuant to such criteria as compared with
    42  annual net income, which prevailed on the average over the period  nine-
    43  teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
    44  first three years of operation if the building was completed since nine-
    45  teen hundred sixty-eight or for the first three  fiscal  years  after  a
    46  transfer of title to a new owner provided the new owner can establish to
    47  the  satisfaction  of  the commissioner that he or she acquired title to
    48  the building as a result of a bona fide sale of the entire building  and
    49  that  the new owner is unable to obtain requisite records for the fiscal
    50  years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
    51  despite  diligent  efforts to obtain same from predecessors in title and
    52  further provided that the new owner can provide financial data  covering
    53  a  minimum  of  six  years under his or her continuous and uninterrupted
    54  operation of the building to meet the three year to three  year  compar-
    55  ative  test  periods  herein provided; and (b) as to completed building-
    56  wide major capital improvements, for a finding  that  such  improvements
        A. 4711--A                          3

     1  are deemed depreciable under the Internal Revenue Code and that the cost
     2  is  to  be amortized over a twelve-year period for a building with thir-
     3  ty-five or fewer housing accommodations, or a twelve  and  one-half-year
     4  period for a building with more than thirty-five housing accommodations,
     5  for  any  determination  issued by the division of housing and community
     6  renewal after [the effective date of the the chapter of the laws of  two
     7  thousand  nineteen  that amended this paragraph] June 14, 2019 and shall
     8  be removed from the legal regulated rent thirty years from the date  the
     9  increase  became  effective  inclusive  of  any increases granted by the
    10  applicable rent guidelines board. Temporary  major  capital  improvement
    11  increases  shall  be  collectible  prospectively on the first day of the
    12  first month beginning sixty days from the  date  of  mailing  notice  of
    13  approval  to  the  tenant.  Such notice shall disclose the total monthly
    14  increase in rent and the first  month  in  which  the  tenant  would  be
    15  required  to  pay  the  temporary  increase. An approval for a temporary
    16  major  capital  improvement  increase  shall  not  include   retroactive
    17  payments. The collection of any increase shall not exceed two percent in
    18  any year from the effective date of the order granting the increase over
    19  the  rent  set forth in the schedule of gross rents, with collectability
    20  of any dollar excess above said sum to  be  spread  forward  in  similar
    21  increments  and added to the rent as established or set in future years.
    22  Upon vacancy, the landlord may add any remaining balance of  the  tempo-
    23  rary major capital improvement increase to the legal regulated rent.  No
    24  landlord  shall deny access to a professional engineer licensed to prac-
    25  tice in the state of New York or  a  registered  architect  licensed  to
    26  practice in the state of New York hired by any tenant, tenants or tenant
    27  association  representing  tenants  for  the  purpose  of  conducting an
    28  inspection of a major capital improvement for which an  application  for
    29  adjustment  of  maximum  rent  has  been filed. Such inspection shall be
    30  conducted after notice to the landlord and during normal business hours.
    31  Such tenant may file the report of the inspection with the  state  divi-
    32  sion  of housing and community renewal for consideration in the determi-
    33  nation of such application. Notwithstanding any other provision  of  the
    34  law,  for  any  renewal  lease commencing on or after June 14, 2019, the
    35  collection of any rent increases due to any major  capital  improvements
    36  approved  on  or  after June 16, 2012 and before June 16, 2019 shall not
    37  exceed two percent in any year for any tenant in occupancy on  the  date
    38  the  major  capital improvement was approved or based upon cash purchase
    39  price exclusive of interest or service charges. Where an application for
    40  a temporary major capital improvement increase has been filed, a  tenant
    41  shall have sixty days from the date of mailing of a notice of a proceed-
    42  ing  in  which  to  answer  or  reply. The state division of housing and
    43  community renewal shall provide any responding tenant with  the  reasons
    44  for the division's approval or denial of such application. Notwithstand-
    45  ing  anything  to  the  contrary  contained herein, no hardship increase
    46  granted pursuant to this paragraph shall, when added to the annual gross
    47  rents, as determined by the commissioner, exceed the  sum  of,  (i)  the
    48  annual  operating expenses, (ii) an allowance for management services as
    49  determined by  the  commissioner,  (iii)  actual  annual  mortgage  debt
    50  service  (interest  and  amortization)  on its indebtedness to a lending
    51  institution, an insurance company, a retirement  fund  or  welfare  fund
    52  which is operated under the supervision of the banking or insurance laws
    53  of  the  state of New York or the United States, and (iv) eight and one-
    54  half percent of that portion of the fair market value  of  the  property
    55  which  exceeds  the unpaid principal amount of the mortgage indebtedness
    56  referred to in subparagraph (iii) of this paragraph. Fair  market  value
        A. 4711--A                          4

     1  for  the  purposes of this paragraph shall be six times the annual gross
     2  rent. The collection of any increase in  the  stabilized  rent  for  any
     3  apartment pursuant to this paragraph shall not exceed six percent in any
     4  year from the effective date of the order granting the increase over the
     5  rent  set  forth  in the schedule of gross rents, with collectability of
     6  any dollar excess above said sum to be spread forward in similar  incre-
     7  ments  and  added to the stabilized rent as established or set in future
     8  years;
     9    § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
    10  576 of the laws of 1974, constituting the  emergency  tenant  protection
    11  act  of  nineteen  seventy-four,  as  amended by section 26 of part Q of
    12  chapter 39 of the laws of 2019, is amended to read as follows:
    13    (3) there has been since January first, nineteen hundred  seventy-four
    14  a major capital improvement essential for the preservation, energy effi-
    15  ciency,   functionality,  or  infrastructure  of  the  entire  building,
    16  improvement of the structure including heating,  windows,  plumbing  and
    17  roofing,  but  shall  not be for operation costs or unnecessary cosmetic
    18  improvements. An adjustment under this paragraph shall be in  an  amount
    19  sufficient  to  amortize  the  cost of the improvements pursuant to this
    20  paragraph over a twelve-year period for a building with  thirty-five  or
    21  fewer  housing  accommodations,  or  a  twelve and one-half period for a
    22  building with more than thirty-five housing accommodations and shall  be
    23  removed  from  the  legal  regulated rent thirty years from the date the
    24  increase became effective inclusive of  any  increases  granted  by  the
    25  applicable  rent  guidelines  board, for any determination issued by the
    26  division of housing and community renewal after [the effective  date  of
    27  the chapter of the laws of two thousand nineteen that amended this para-
    28  graph]  June  14,  2019.  Temporary  major capital improvement increases
    29  shall be collectable prospectively on the first day of the  first  month
    30  beginning  sixty days from the date of mailing notice of approval to the
    31  tenant.  Such notice shall disclose the total monthly increase  in  rent
    32  and  the  first  month  in which the tenant would be required to pay the
    33  temporary increase. An approval for a temporary major  capital  improve-
    34  ment  increase shall not include retroactive payments. The collection of
    35  any increase shall not exceed two percent in any year from the effective
    36  date of the order granting the increase over the rent set forth  in  the
    37  schedule  of gross rents, with collectability of any dollar excess above
    38  said sum to be spread forward in similar increments  and  added  to  the
    39  rent  as  established or set in future years. Upon vacancy, the landlord
    40  may add any remaining balance of the temporary major capital improvement
    41  increase to the legal regulated rent.  No landlord shall deny access  to
    42  a professional engineer licensed to practice in the state of New York or
    43  a  registered  architect  licensed  to practice in the state of New York
    44  hired by any tenant, tenants or tenant association representing  tenants
    45  for  the purpose of conducting an inspection of a major capital improve-
    46  ment for which an application for adjustment of maximum  rent  has  been
    47  filed.  Such  inspection shall be conducted after notice to the landlord
    48  and during normal business hours. Such tenant may file the report of the
    49  inspection with the state division of housing and community renewal  for
    50  consideration  in the determination of such application. Notwithstanding
    51  any other provision of the law, the collection of any rent increases for
    52  any renewal lease commencing on or after June 14, 2019, due to any major
    53  capital improvements approved on or after June 16, 2012 and before  June
    54  16,  2019  shall  not  exceed  two percent in any year for any tenant in
    55  occupancy on the date the major capital improvement was approved, or
        A. 4711--A                          5

     1    § 4.  Subparagraph 7 of the second undesignated paragraph  of    para-
     2  graph    (a) of  subdivision  4  of section 4 of chapter 274 of the laws
     3  of 1946, constituting the emergency housing  rent  control law as  sepa-
     4  rately  amended  by section 14 of part K of chapter 36 and section 25 of
     5  part Q of chapter 39 of the laws of 2019, is amended to read as follows:
     6    (7)  there has been since March first, nineteen hundred fifty, a major
     7  capital improvement essential for the preservation,  energy  efficiency,
     8  functionality,  or infrastructure of the entire building, improvement of
     9  the structure including heating,  windows,  plumbing  and  roofing,  but
    10  shall not be for operational costs or unnecessary cosmetic improvements;
    11  which for any order of the commissioner issued after [the effective date
    12  of  the  chapter  of the laws of two thousand nineteen that amended this
    13  paragraph] June 14, 2019 the cost of such improvement shall be amortized
    14  over a twelve-year period for buildings with thirty-five or fewer  units
    15  or  a twelve and one-half year period for buildings with more than thir-
    16  ty-five units, and shall be removed from the legal regulated rent thirty
    17  years from the date the  increase  became  effective  inclusive  of  any
    18  increases  granted  by  the  applicable rent guidelines board. Temporary
    19  major capital improvement increases shall be  collectible  prospectively
    20  on  the  first day of the first month beginning sixty days from the date
    21  of mailing notice of approval to the tenant. Such notice shall  disclose
    22  the  total  monthly  increase  in  rent and the first month in which the
    23  tenant would be required to pay the temporary increase. An approval  for
    24  a  temporary major capital improvement increase shall not include retro-
    25  active payments. The collection of any increase  shall  not  exceed  two
    26  percent  in  any  year from the effective date of the order granting the
    27  increase over the rent set forth in the schedule of  gross  rents,  with
    28  collectability  of any dollar excess above said sum to be spread forward
    29  in similar increments and added to the rent as  established  or  set  in
    30  future  years.  Upon vacancy, the landlord may add any remaining balance
    31  of the temporary major capital improvement increase to the  legal  regu-
    32  lated  rent.    No landlord shall deny access to a professional engineer
    33  licensed to practice in the state of New York or a registered  architect
    34  licensed  to  practice  in  the  state  of New York hired by any tenant,
    35  tenants or tenant association representing tenants for  the  purpose  of
    36  conducting  an  inspection  of  a major capital improvement for which an
    37  application  for  adjustment  of  maximum  rent  has  been  filed.  Such
    38  inspection  shall  be  conducted after notice to the landlord and during
    39  normal business hours. Such tenant may file the report of the inspection
    40  with the state division of housing and community renewal  for  consider-
    41  ation  in  the  determination  of  such application. Notwithstanding any
    42  other provision of the law, for any renewal lease commencing on or after
    43  June 14, 2019, the collection of any rent increases  due  to  any  major
    44  capital  improvements approved on or after June 16, 2012 and before June
    45  16, 2019 shall not exceed two percent in any  year  for  any  tenant  in
    46  occupancy  on  the  date  the  major  capital  improvement was approved;
    47  provided, however, where an application for a  temporary  major  capital
    48  improvement increase has been filed, a tenant shall have sixty days from
    49  the  date  of  mailing of a notice of a proceeding in which to answer or
    50  reply. The state division of housing and community renewal shall provide
    51  any responding tenant with the reasons for the  division's  approval  or
    52  denial of such application; or
    53    §  5.    This  act  shall take effect on the one hundred twentieth day
    54  after it shall have become a law; provided, however, that the amendments
    55  to section 26-405 of the  city  rent  and  rehabilitation  law  made  by
    56  section  one  of  this act shall remain in full force and effect only so
        A. 4711--A                          6

     1  long as the public emergency requiring the  regulation  and  control  of
     2  residential  rents and evictions continues, as provided in subdivision 3
     3  of section 1 of the  local  emergency  housing  rent  control  act;  and
     4  provided  further  that  the  amendments  to  section 26-511 of the rent
     5  stabilization law of nineteen hundred sixty-nine made by section two  of
     6  this act shall expire on the same date as such law expires and shall not
     7  affect  the  expiration  of such law as provided under section 26-520 of
     8  such law.  Effective immediately, the addition, amendment and/or  repeal
     9  of  any rule and regulation necessary for the implementation of this act
    10  on its effective date are authorized to be made on or before such date.