A7467A-2011 Actions

• Jan 18, 2012: committed to housing
• Jan 4, 2012: ordered to third reading cal.248
• Jan 4, 2012: RETURNED TO ASSEMBLY
• Jan 4, 2012: DIED IN SENATE
• Jun 16, 2011: REFERRED TO RULES
• Jun 16, 2011: delivered to senate
• Jun 16, 2011: passed assembly
• Jun 15, 2011: ordered to third reading rules cal.282
• Jun 15, 2011: rules report cal.282
• Jun 15, 2011: reported
• Jun 13, 2011: reported referred to rules
• May 13, 2011: print number 7467a
• May 13, 2011: amend and recommit to codes
• May 10, 2011: reported referred to codes
• May 4, 2011: referred to housing

A7467A-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                   7467--A

                         2011-2012 Regular Sessions

                            I N  ASSEMBLY

                                 May 4, 2011
                                 ___________

  Introduced by M. of A. V. LOPEZ -- read once and referred to the Commit-
    tee  on  Housing -- reported and referred to the Committee on Codes --
    committee discharged, bill amended, ordered reprinted as  amended  and
    recommitted to said committee

  AN ACT to amend the multiple dwelling law, in relation to interim multi-
    ple dwellings

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. Subdivision 1 of section 281 of the multiple dwelling  law,
  as  added  by  chapter  349  of  the laws of 1982, is amended to read as
  follows:

    1. Except as provided in subdivision two of  this  section,  the  term
  "interim  multiple  dwelling" means any building or structure or portion
  thereof located in a city of more than one million persons which (i)  at
  any  time  was  occupied  for  manufacturing,  commercial,  or warehouse
  purposes; and (ii) lacks a certificate of compliance or occupancy pursu-
  ant to section three hundred one of this  chapter,  NOTWITHSTANDING  ANY
  OTHER PORTION OF ANY SUCH BUILDING HAVING A CERTIFICATE OF COMPLIANCE OR
  OCCUPANCY  PURSUANT  TO  SECTION  THREE HUNDRED ONE OF THIS CHAPTER; and
  (iii) on December first, nineteen hundred eighty-one  was  occupied  for
  residential  purposes  since April first, nineteen hundred eighty as the
  residence or home of any three or more families living independently  of
  one another.
    S  2.  Subdivision  3  of section 281 of the multiple dwelling law, as
  added by chapter 349 of the laws of 1982, is amended to read as follows:

    3. In addition to the residents of an interim multiple dwelling, resi-
  dential occupants in units first occupied after  April  first,  nineteen
  hundred  eighty  and  prior  to April first, nineteen hundred eighty-one
  shall be qualified for protection pursuant  to  this  article,  provided
  that  the  building  or  any  portion  thereof otherwise qualifies as an
  interim multiple dwelling, and the tenants are eligible under the  local

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD11449-02-1

 A. 7467--A                          2

  zoning resolution for such occupancy. A reduction in the number of occu-
  pied  residential  units  in  a  building after December first, nineteen
  hundred eighty-one shall not eliminate the protections of  this  article
  for  any remaining residential occupants qualified for such protections.
  Non-residential space in a building as of [the effective date of the act
  which added this article] JUNE TWENTY-FIRST, NINETEEN HUNDRED EIGHTY-TWO
  shall be offered for residential use only after the obtaining of a resi-
  dential certificate of occupancy for such space, and such space shall be
  exempt from this article, even if a portion of such building may  be  an
  interim multiple dwelling.
    S  3.  Subdivision  5  of section 281 of the multiple dwelling law, as
  amended by chapter 147 of the laws  of  2010,  is  amended  to  read  as
  follows:

    5. Notwithstanding the provisions of paragraphs (i), (iii) and (iv) of
  subdivision  two of this section, but subject to paragraphs (i) and (ii)
  of subdivision one of this section and paragraph (ii) of subdivision two
  of this section, the term  "interim  multiple  dwelling"  shall  include
  buildings,  structures or portions thereof that are located in a city of
  more than one  million  persons  which  were  occupied  for  residential
  purposes  as  the residence or home of any three or more families living
  independently from one another for a period of twelve consecutive months
  during the period commencing January  first,  two  thousand  eight,  and
  ending December thirty-first, two thousand nine, provided that the unit:

  is  not  located  in  a basement or cellar and has at least one entrance
  that does not require passage through another residential unit to obtain
  access to the unit, has at least one window opening onto a street  or  a
  lawful  yard or court as defined in the zoning resolution for such muni-
  cipality, and is at least five hundred fifty square feet in area.    The
  term  "interim  multiple dwelling" as used in this subdivision shall not
  include (i) any building in  an  industrial  business  zone  established
  pursuant to chapter six-D of title twenty-two of the administrative code
  of   the   city   of   New   York   except   that   a  building  in  the
  Williamsburg/Greenpoint or North Brooklyn industrial business zones  and
  a  building  located  in that portion of the Long Island city industrial
  business zone that has frontage on either side of forty-seventh [street]
  AVENUE or is located north of forty-seventh [street] AVENUE and south of
  Skillman avenue or in that portion of the Long  Island  city  industrial
  business  zone  that  is  located  north of forty-fourth drive, south of
  Queens plaza north, and west of twenty-third street may be  included  in
  the  term  "interim  multiple  dwelling,"  or (ii) units in any building
  that, at the time this subdivision shall take effect AND  CONTINUING  AT
  THE  TIME OF THE SUBMISSION OF AN APPLICATION FOR COVERAGE BY ANY PARTY,
  also contains a use actively and currently pursued,  which  use  is  set
  forth in use groups fifteen through eighteen, as described in the zoning
  resolution  of  such  municipality  in  effect on June twenty-first, two
  thousand ten, and which the loft board has determined in rules and regu-
  lation is inherently incompatible  with  residential  use  in  the  same
  building,  provided that if a building does not contain such active uses
  at the time this subdivision takes effect,  no  subsequent  use  by  the
  owner  of  the  building shall eliminate the protections of this section
  for any residential occupants in the building already qualified for such
  protections. The term "interim  multiple  dwelling,"  as  used  in  this
  subdivision shall also include buildings, structures or portions thereof
  that are located north of West 24th Street and south of West 27th Street
  and  west  of tenth avenue and east of eleventh avenue in a city of more
  than one million persons which were occupied for residential purposes as

 A. 7467--A                          3

  the residence or home of any two or more families  living  independently
  from  one  another  for a period of twelve consecutive months during the
  period commencing January first, two thousand eight, and ending December
  thirty-first,  two  thousand  nine and subject to all the conditions and
  limitations of this subdivision other than the number of  units  in  the
  building.  A  reduction in the number of occupied residential units in a
  building after  meeting  the  aforementioned  twelve  consecutive  month
  requirement  shall not eliminate the protections of this section for any
  remaining residential occupants qualified for such protections.  Non-re-
  sidential space in a building as of [the effective date of this subdivi-
  sion]  JUNE TWENTY-FIRST, TWO THOUSAND TEN shall be offered for residen-
  tial use only after  the  obtaining  of  a  residential  certificate  of
  occupancy  for such space and such space shall be exempt from this arti-
  cle, even if a portion of such  building  may  be  an  interim  multiple
  dwelling.
    S  4.  Paragraph  (vi) of subdivision 1 of section 284 of the multiple
  dwelling law, as amended by chapter 135 of the laws of 2010, is  amended
  to read as follows:

    (vi)  Notwithstanding  the provisions of paragraphs (i) through (v) of
  this subdivision the owner of an interim multiple dwelling made  subject
  to this article by subdivision five of section two hundred eighty-one of
  this article (A) shall file an alteration application within nine months
  from  the [effective date of the chapter of the laws of two thousand ten
  which amended this subparagraph] PROMULGATION OF  THE  RULES  AND  REGU-
  LATIONS  PURSUANT  TO SUBDIVISION FIVE OF SECTION TWO HUNDRED EIGHTY-ONE
  OF THIS ARTICLE, and (B) shall take all reasonable and necessary  action
  to  obtain an approved alteration permit within twelve months from [such
  effective date] THE PROMULGATION OF THE RULES AND  REGULATIONS  PURSUANT
  TO  SUBDIVISION  FIVE OF SECTION TWO HUNDRED EIGHTY-ONE OF THIS ARTICLE,
  and (C) shall achieve compliance with the standards of safety  and  fire
  protection set forth in article seven-B of this chapter for the residen-
  tial portions of the building within eighteen months from obtaining such
  alteration permit [or eighteen months from such effective date, whichev-
  er  is later], and (D) shall take all reasonable and necessary action to
  obtain a certificate of occupancy as a class A multiple dwelling for the
  residential portions of the  building  or  structure  within  thirty-six
  months  from  [such  effective  date]  THE PROMULGATION OF THE RULES AND
  REGULATIONS PURSUANT TO SUBDIVISION FIVE OF SECTION TWO HUNDRED  EIGHTY-
  ONE OF THIS ARTICLE. The loft board may, upon good cause shown, and upon
  proof of compliance with the standards of safety and fire protection set
  forth  in  article  seven-B  of  this  chapter, twice extend the time of
  compliance with the requirement to obtain a residential  certificate  of
  occupancy for periods not to exceed twelve months each.
    S  5.  Paragraph  (ix) of subdivision 1 of section 284 of the multiple
  dwelling law, as amended by chapter 135 of the laws of 2010, is  amended
  to read as follows:

    (ix)  In  addition  to the penalties provided in article eight of this
  chapter, if there is a finding by the  loft  board  that  an  owner  has
  failed  to  satisfy  any  requirement  specified in paragraph (i), (ii),
  (iii), (iv), (v), or (vi) of this subdivision, a court may order specif-
  ic performance to enforce the provisions of this article upon the appli-
  cation of [three occupants of separate residential units] ANY  OCCUPANT,
  qualified for the protection of this article WHO RESIDES IN THE AFFECTED
  INTERIM MULTIPLE DWELLING, or upon the application of the municipality.

 A. 7467--A                          4

    S  6.  Subdivision  2  of section 285 of the multiple dwelling law, as
  amended by chapter 135 of the laws  of  2010,  is  amended  to  read  as
  follows:

    2.  Notwithstanding  any other provision of this article, an owner may
  apply to the loft board for exemption of a building or  portion  thereof
  from  this  article  on  the  basis that compliance with this article in
  obtaining a legal residential certificate of occupancy  would  cause  an
  unjustifiable  hardship  either because: (i) it would cause an unreason-
  ably adverse impact on a non-residential conforming  use  tenant  within
  the  building  or  (ii) the cost of compliance renders legal residential
  conversion infeasible. Residential and other tenants shall be given  not
  less  than  sixty  days  notice  in advance of the hearing date for such
  application. If the loft board approves such application,  the  building
  or  portion  thereof  shall  be  exempt  from  this  article, and may be
  converted to non-residential conforming uses,  provided,  however,  that
  the  owner  shall, as a condition of approval of such application, agree
  to file an irrevocable recorded covenant in  form  satisfactory  to  the
  loft  board  enforceable for fifteen years by the municipality, that the
  building will not be re-converted to residential uses during such  time.
  The  standard  for  granting such hardship application for a building or
  portion thereof shall be as follows: (a) the loft board shall only grant
  the minimum relief necessary to relieve any alleged  hardship  with  the
  understanding if compliance is reasonably possible it should be achieved
  even if it requires alteration of units, relocation of tenants to vacant
  space  within the building, re-design of space or application for a non-
  use-related variance, special permit, minor modification or  administra-
  tive  certification; (b) self-created hardship shall not be allowed; (c)
  the test for cost infeasibility shall be that of a reasonable return  on
  the  owner's  investment  not maximum return on investment; (d) the test
  for unreasonably adverse impact  on  a  non-residential  conforming  use
  tenant   shall  be  whether  residential  conversion  would  necessitate
  displacement. Such hardship applications shall be submitted to the  loft
  board  within nine months of the establishment of the loft board (or, in
  the case of interim multiple dwellings referred to in  subdivision  four
  of section two hundred eighty-one of this article, within nine months of
  [the  effective  date of such subdivision four] JUNE TWENTY-FIRST, NINE-
  TEEN HUNDRED EIGHTY-TWO or in the case  of  interim  multiple  dwellings
  made  subject to this article by subdivision five of section two hundred
  eighty-one of this article, within nine months of [the effective date of
  such subdivision five] JUNE TWENTY-FIRST, TWO THOUSAND TEN),  but  shall
  not  be  considered, absent a waiver by the loft board, unless the owner
  has also filed an alteration application. In determination of  any  such
  hardship  application,  the loft board may demand such information as it
  deems necessary. In approving any such hardship  application,  the  loft
  board  may fix reasonable terms and conditions for the vacating of resi-
  dential occupancy.
    S 7. Section 286 of the multiple dwelling law, as added by chapter 349
  of the laws of 1982, subdivision 2 as amended by chapter 414 of the laws
  of 1999, subparagraphs (A) and (B) of paragraph (ii) of  subdivision  2,
  paragraph  (iii) of subdivision 2, and subdivision 3 as amended by chap-
  ter 135 of the laws of 2010, is amended to read as follows:

    S 286. Tenant protection. 1. It shall not be a ground for an action or
  proceeding to recover possession of a unit  occupied  by  a  residential
  occupant qualified for the protection of this article that the occupancy
  of  the  unit  is  illegal or in violation of provisions of the tenant's
  lease or rental agreement because a residential certificate of occupancy

 A. 7467--A                          5

  has not been issued for the building, or because  residential  occupancy
  is not permitted by the lease or rental agreement.
    2.  (i)  Prior to compliance with safety and fire protection standards
  of article seven-B of this chapter, residential occupants qualified  for
  protection pursuant to this article shall be entitled to continued occu-
  pancy,  provided that the unit is their primary residence, and shall pay
  the same rent, [including escalations,]  specified  in  their  lease  or
  rental  agreement  to the extent to which such lease or rental agreement
  remains in effect or, in the absence of a lease or rental agreement, the
  same rent most recently paid and accepted by the owner; if there  is  no
  lease  or  other  rental  agreement in effect, rent adjustments prior to
  article seven-B compliance shall be in conformity with guidelines to  be
  set  by  the loft board for such residential occupants within six months
  from [the effective date of this article]  JUNE  TWENTY-FIRST,  NINETEEN
  HUNDRED  EIGHTY-TWO,  PROVIDED,  HOWEVER,  THAT  SUCH  RENT ADJUSTMENTS,
  ALLOWED PURSUANT TO THIS  PARAGRAPH,  SHALL  NOT  APPLY  TO  UNITS  MADE
  SUBJECT  TO  THIS  ARTICLE  BY  SUBDIVISION  FIVE OF SECTION TWO HUNDRED
  EIGHTY-ONE OF THIS ARTICLE.
    (ii) In addition to any rent adjustment pursuant to paragraph  (i)  of
  this  subdivision, on or after June twenty-first, nineteen hundred nine-
  ty-two, the rent for residential units  in  interim  multiple  dwellings
  that  are not yet in compliance with the requirements of subdivision one
  of section two hundred eighty-four of this article shall be adjusted  as
  follows:

    (A)  Upon the owners' filing of an alteration application, as required
  by paragraph (ii), (iii), (iv), (v),  or  (vi)  of  subdivision  one  of
  section  two hundred eighty-four of this article, an adjustment equal to
  THE COST OF FILING AN ALTERATION  APPLICATION  DIVIDED  BY  EIGHTY-FOUR,
  DIVIDED BY THE AMOUNT OF SQUARE FOOTAGE LOCATED WITHIN ALL OF THE INTER-
  IM  MULTIPLE DWELLING UNITS, AND THEN MULTIPLIED BY THE AMOUNT OF SQUARE
  FOOTAGE LOCATED WITHIN SUCH INTERIM MULTIPLE DWELLING UNIT UP TO A MAXI-
  MUM OF six percent of the rent in effect at the time the owner files the
  alteration application.  THE INCREASE PERMITTED PURSUANT TO THIS SUBPAR-
  AGRAPH SHALL BE COLLECTED AS A MONTHLY SURCHARGE TO THE MAXIMUM RENT. IT
  SHALL BE SEPARATELY DESIGNATED AND BILLED  AS  SUCH  AND  SHALL  NOT  BE
  COMPOUNDED  BY  ANY  OTHER ADJUSTMENT TO THE MAXIMUM RENT. COLLECTION OF
  SURCHARGES PURSUANT TO THIS SUBPARAGRAPH SHALL CEASE WHEN THE OWNER  HAS
  RECOVERED  THE COST OF FILING AN ALTERATION APPLICATION. THE OWNER SHALL
  FILE WITH THE LOFT  BOARD  AN  EXPLANATION  OF  HOW  THE  SURCHARGE  WAS
  COMPUTED,  AND ALL DOCUMENTS NECESSARY TO SUPPORT THE COLLECTION OF SUCH
  SURCHARGE, INCLUDING BUT NOT LIMITED TO, CANCELLED CHECKS, INVOICES  AND
  SIGNED  CONTRACTS.  SUCH INFORMATION SHALL ALSO BE MADE AVAILABLE TO ANY
  LEGAL OCCUPANT RESIDING WITHIN THE AFFECTED  INTERIM  MULTIPLE  DWELLING
  UNIT.
    (B)  Upon  obtaining  an  alteration  permit, as required by paragraph
  (ii), (iii), (iv), (v), or  (vi)  of  subdivision  one  of  section  two
  hundred  eighty-four of this article, an adjustment equal to THE COST OF
  OBTAINING AN ALTERATION PERMIT DIVIDED BY EIGHTY-FOUR,  DIVIDED  BY  THE
  AMOUNT  OF  SQUARE  FOOTAGE  LOCATED  WITHIN ALL OF THE INTERIM MULTIPLE
  DWELLING UNITS, AND THEN MULTIPLIED BY  THE  AMOUNT  OF  SQUARE  FOOTAGE
  LOCATED  WITHIN  SUCH  INTERIM MULTIPLE DWELLING UNIT UP TO A MAXIMUM OF
  eight percent of the rent in effect at the time the  owner  obtains  the
  alteration permit.  THE INCREASE PERMITTED PURSUANT TO THIS SUBPARAGRAPH
  SHALL  BE COLLECTED AS A MONTHLY SURCHARGE TO THE MAXIMUM RENT. IT SHALL
  BE SEPARATELY DESIGNATED AND BILLED AS SUCH AND SHALL NOT BE  COMPOUNDED
  BY  ANY  OTHER  ADJUSTMENT TO THE MAXIMUM RENT. COLLECTION OF SURCHARGES

 A. 7467--A                          6

  PURSUANT TO THIS SUBPARAGRAPH SHALL CEASE WHEN THE OWNER  HAS  RECOVERED
  THE  COST  OF  OBTAINING AN ALTERATION PERMIT. THE OWNER SHALL FILE WITH
  THE LOFT BOARD AN EXPLANATION OF HOW THE SURCHARGE WAS COMPUTED, AND ALL
  DOCUMENTS NECESSARY TO SUPPORT THE COLLECTION OF SUCH SURCHARGE, INCLUD-
  ING BUT NOT LIMITED TO, CANCELLED CHECKS, INVOICES AND SIGNED CONTRACTS.
  SUCH  INFORMATION  SHALL  ALSO  BE  MADE AVAILABLE TO ANY LEGAL OCCUPANT
  RESIDING WITHIN THE AFFECTED INTERIM MULTIPLE DWELLING UNIT.
    (C) Upon achieving compliance with the standards of  safety  and  fire
  protection set forth in article seven-B of this chapter for the residen-
  tial  portions  of  the  building,  an  adjustment  equal to THE COST OF
  ACHIEVING COMPLIANCE WITH THE STANDARDS OF SAFETY  AND  FIRE  PROTECTION
  DIVIDED  BY EIGHTY-FOUR, DIVIDED BY THE AMOUNT OF SQUARE FOOTAGE LOCATED
  WITHIN ALL OF THE INTERIM MULTIPLE DWELLING UNITS, AND  THEN  MULTIPLIED
  BY  THE  AMOUNT  OF  SQUARE FOOTAGE LOCATED WITHIN SUCH INTERIM MULTIPLE
  DWELLING UNIT UP TO A MAXIMUM OF six percent of the rent  in  effect  at
  the  time  the  owner achieves such compliance.   THE INCREASE PERMITTED
  PURSUANT TO THIS SUBPARAGRAPH SHALL BE COLLECTED AS A MONTHLY  SURCHARGE
  TO  THE  MAXIMUM  RENT.  IT SHALL BE SEPARATELY DESIGNATED AND BILLED AS
  SUCH AND SHALL NOT BE COMPOUNDED BY ANY OTHER ADJUSTMENT TO THE  MAXIMUM
  RENT. COLLECTION OF SURCHARGES PURSUANT TO THIS SUBPARAGRAPH SHALL CEASE
  WHEN  THE  OWNER HAS RECOVERED THE COST OF ACHIEVING COMPLIANCE WITH THE
  STANDARDS OF SAFETY AND FIRE PROTECTION.  THE OWNER SHALL FILE WITH  THE
  LOFT  BOARD  AN  EXPLANATION  OF HOW THE SURCHARGE WAS COMPUTED, AND ALL
  DOCUMENTS NECESSARY TO SUPPORT THE COLLECTION OF SUCH SURCHARGE, INCLUD-
  ING BUT NOT LIMITED TO, CANCELLED CHECKS, INVOICES AND SIGNED CONTRACTS.
  SUCH INFORMATION SHALL ALSO BE MADE  AVAILABLE  TO  ANY  LEGAL  OCCUPANT
  RESIDING WITHIN THE AFFECTED INTERIM MULTIPLE DWELLING UNIT.
    (D) Owners who filed an alteration application prior to [the effective
  date   of   this   subparagraph]  JUNE  TWENTY-FIRST,  NINETEEN  HUNDRED
  NINETY-TWO shall be entitled to a prospective adjustment  equal  to  six
  percent  of  the  rent on [the effective date of this subparagraph] JUNE
  TWENTY-FIRST, NINETEEN HUNDRED NINETY-TWO.
    (E) Owners who obtained an alteration permit  prior  to  June  twenty-
  first,  nineteen  hundred  ninety-two shall be entitled to a prospective
  adjustment equal to fourteen percent of the rent on  June  twenty-first,
  nineteen hundred ninety-two.
    (F)  Owners  who  achieved compliance with the standards of safety and
  fire protection set forth in article seven-B of  this  chapter  for  the
  residential  portions  of the building prior to June twenty-first, nine-
  teen hundred ninety-two shall be entitled to  a  prospective  adjustment
  equal  to  twenty  percent  of  the  rent on June twenty-first, nineteen
  hundred ninety-two.
    (iii) Any rent adjustments pursuant to paragraph (ii) of this subdivi-
  sion shall not apply to units which were rented at  market  value  after
  June  twenty-first, nineteen hundred eighty-two and prior to [June twen-
  ty-first, nineteen hundred ninety-two. This paragraph shall not apply to
  units made subject to this article by subdivision five  of  section  two
  hundred  eighty-one of this article] DECEMBER THIRTY-FIRST, TWO THOUSAND
  NINE.
    (iv) Payment of any rent adjustments pursuant  to  paragraph  (ii)  of
  this  subdivision  shall  commence  the  month immediately following the
  month in which the act entitling the owner to the adjustment occurred.
    3. Upon or after compliance with the safety and fire protection stand-
  ards of article seven-B of this chapter, an owner may apply to the  loft
  board  for an adjustment of rent based upon the cost of such compliance.
  Upon approval by the loft board of such compliance, the loft board shall

 A. 7467--A                          7

  set the initial legal regulated  rent,  and  each  residential  occupant
  qualified  for  protection  pursuant  to this article shall be offered a
  residential lease subject to  the  provisions  regarding  evictions  and
  regulation  of  rent set forth in the emergency tenant protection act of
  nineteen seventy-four, except to the extent the provisions of this arti-
  cle are inconsistent with such act.
    4. The initial legal regulated rent  established  by  the  loft  board
  shall be equal to (i) the rent in effect, [including escalations,] as of
  the  date  of  application  for adjustment ("base rent"), plus, (ii) the
  maximum annual  amount  of  any  increase  allocable  to  compliance  as
  provided  herein;  and  (iii) the percentage increase then applicable to
  one, two or three year leases, as elected by the tenant, as  established
  by  the  local  rent  guidelines  board,  and  applied to the base rent,
  provided, however, such percentage increases may be adjusted downward by
  the loft board if prior increases based on loft board  guidelines  cover
  part  of the same time period to be covered by the rent guidelines board
  adjustments.
    5. An owner may apply to the loft  board  for  rent  adjustments  once
  based  upon  the cost of compliance with article seven-B of this chapter
  and once based upon the obtaining of a residential certificate of  occu-
  pancy.  If the initial legal regulated rent has been set based only upon
  article  seven-B  compliance,  a further adjustment may be obtained upon
  the obtaining of a residential certificate of occupancy. Upon receipt of
  such records as the loft board  shall  require,  the  loft  board  shall
  determine  the  costs  necessarily  and  reasonably  incurred, including
  financing, in obtaining compliance with this article pursuant to a sche-
  dule of reasonable costs to be promulgated  by  it.  The  adjustment  in
  maximum  rents  for  compliance  with  this  article shall be determined
  either (i) by dividing the amount of the cash cost of such  improvements
  exclusive  of  interest  and  service  charges over a ten year period of
  amortization, or (ii) by dividing the amount of the cash  cost  of  such
  improvements  exclusive  of  interest and service charges over a fifteen
  year period of  amortization,  plus  the  actual  annual  mortgage  debt
  service  attributable  to  interest  and service charges in each year of
  indebtedness to an institutional lender, or other lender approved by the
  loft board, incurred by the owner to pay the cash cost of  the  improve-
  ments,  provided  that the maximum amount of interest charged includable
  in rent shall reflect an annual amortization factor of one-fifteenth  of
  the  outstanding  principal balance. Rental adjustments to each residen-
  tial unit shall be determined on a basis approved by the loft board.  An
  owner may elect that the loft board shall deem the total cost of compli-
  ance with this article to be the amounts certified by the [local depart-
  ment of housing preservation and development] APPLICABLE LOCAL AGENCY of
  such municipality in any certificate of eligibility issued in connection
  with  an  application  for  tax exemption or tax abatement to the extent
  such certificate reflects categories of costs approved by the loft board
  as reasonable and necessary  for  such  compliance.  Rental  adjustments
  attributable  to  the  cost  of  compliance  with this article shall not
  become part of the base rent for purposes of calculating rents  adjusted
  pursuant  to rent guidelines board increases. NO RENT ADJUSTMENT ALLOWED
  PURSUANT TO THIS SUBDIVISION SHALL BE GIVEN FOR ANY RENT  ADJUSTMENT  TO
  COVER COSTS ALLOWED PURSUANT TO SUBDIVISION TWO OF THIS SECTION.
    6. Notwithstanding any provision of law to the contrary, a residential
  tenant  qualified  for  protection pursuant to this chapter may sell any
  improvements to the unit made or purchased by him to an incoming  tenant
  provided, however, that the tenant shall first offer the improvements to

 A. 7467--A                          8

  the  owner for an amount equal to their fair market value. Upon purchase
  of such improvements by the owner, any unit subject to  rent  regulation
  solely  by reason of this article and not receiving any benefits of real
  estate  tax  exemption  or  tax  abatement,  shall  be exempted from the
  provisions of this article requiring rent regulation  if  such  building
  had  fewer than six [residential] units USED FOR RESIDENTIAL PURPOSES as
  of [the effective date of the act which added this article, or rented at
  market value subject to subsequent rent regulation if such building  had
  six  or  more residential units at such time] DECEMBER THIRTY-FIRST, TWO
  THOUSAND NINE. The loft board  shall  establish  rules  and  regulations
  regarding  such sale of improvements which shall include provisions that
  such right to sell improvements may be exercised only once for each unit
  subject to this article, and  that  the  opportunity  for  decontrol  or
  market  rentals  shall  not be available to an owner found guilty by the
  loft board of harassment of tenants.
    7. The local rent guidelines board shall annually establish guidelines
  for rent adjustments for the category of buildings covered by this arti-
  cle in accordance with the standards established pursuant to  the  emer-
  gency  tenant  protection  act  of nineteen seventy-four. The local rent
  guidelines board shall consider the necessity of a separate category for
  such buildings, and a separately determined guideline for  rent  adjust-
  ments  for  those  units in which heat is not required to be provided by
  the owner, and may establish such separate category and guideline.   The
  loft  board shall annually commission a study by an independent consult-
  ant to assist the rent guidelines board in determining the economics  of
  loft housing.
    8.  Cooperative  and  condominium  units occupied by owners or tenant-
  shareholders shall not be subject to rent regulation  pursuant  to  this
  article.
    9.  No  eviction  plan  for  conversion  to cooperative or condominium
  ownership for a building which is, or a portion of which is  an  interim
  multiple dwelling shall be submitted for filing to the department of law
  pursuant  to the general business law until a residential certificate of
  occupancy is obtained as required by this article, and  the  residential
  occupants  qualified for protection pursuant to this article are offered
  one, two or three year leases, as elected by such persons, in accordance
  with the provisions for establishment of initial  legal  regulated  rent
  contained herein. Non-eviction plans for such buildings may be submitted
  for  filing  only if the sponsor remains responsible for compliance with
  article seven-B and for all work in common areas required  to  obtain  a
  residential  certificate  of  occupancy. Cooperative conversion shall be
  fully in accordance with section three  hundred  fifty-two-eeee  of  the
  general  business  law,  the  requirements of the code of the local real
  estate industry stabilization association, and with the rules and  regu-
  lations promulgated by the attorney general.
    10.  The functions of the local conciliation and appeals board of such
  municipality regarding owners and tenants  subject  to  rent  regulation
  pursuant  to  this  article shall be carried out by the loft board until
  such time as provided otherwise by local law.
    11. Residential occupants qualified for protection  pursuant  to  this
  article  shall  be  afforded  the  protections  available to residential
  tenants pursuant to the real property law and the real property  actions
  and proceedings law.  RESIDENTIAL OCCUPANTS SHALL BE ALLOWED TO COMMENCE
  AN  ACTION  OR  PROCEEDING  IN  A COURT OF COMPETENT JURISDICTION, WHICH
  NOTWITHSTANDING ANY OTHER PROVISION OF LAW  SHALL  INCLUDE  THE  HOUSING

 A. 7467--A                          9

  PART OF THE NEW YORK CITY CIVIL COURT, TO ENFORCE THE PROVISIONS OF THIS
  SUBDIVISION.
    12.  No  waiver  of  rights  pursuant to this article by a residential
  occupant qualified for protection pursuant to this article made prior to
  [the  effective  date  of  the  act  which  added  this  article]   JUNE
  TWENTY-FIRST, NINETEEN HUNDRED EIGHTY-TWO shall be accorded any force or
  effect;  however,  subsequent to [the effective date] JUNE TWENTY-FIRST,
  NINETEEN HUNDRED EIGHTY-TWO an owner  and  a  residential  occupant  may
  agree to the purchase by the owner of such person's rights in a unit.
    13.  The applicability of the emergency tenant protection act of nine-
  teen seventy-four to buildings occupied by residential tenants qualified
  for protection pursuant to this article shall be subject to  a  declara-
  tion  of  emergency by the local legislative body. In the event such act
  expires prior to the expiration of this article,  [tenents]  TENANTS  in
  interim  multiple  dwellings  shall  be included in coverage of the rent
  stabilization law of nineteen hundred sixty-nine  of  the  city  of  New
  York.
    S 8. This act shall take effect immediately.