Bill S1775-2013

Prohibits an owner from adjusting the amount of preferential rent upon the renewal of a lease

Prohibits an owner from adjusting the amount of preferential rent, rent charged and paid by the tenant which is less than the legal regulated rent for the housing accommodation, upon the renewal of a lease; only allows the owner to make such adjustments upon a vacancy which is not the result of the failure of the owner to maintain a habitable residence.

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  • Jan 8, 2014: REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • Jan 9, 2013: REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT

Memo

BILL NUMBER:S1775

TITLE OF BILL: An act to amend the emergency tenant protection act of nineteen seventy-four and the administrative code of the city of New York, in relation to the regulation of rents

PURPOSE OR GENERAL IDEA OF BILL: To prohibit an owner from adjusting the amount of preferential rent upon the renewal of a lease.

SUMMARY OF SPECIFIC PROVISIONS: Subdivision a-2 of section 10 of section 4 of chapter 576 provides that where the amount of rent charged to and paid by the tenant is less than the legal regulated rent for the housing accommodation, the amount of rent for such housing accommodation may only be increased to the previously established regulated rent, as adjusted by all applicable guidelines increases and other increases authorized by law; provided, however, that such vacancy shall not be caused by the failure of the owner or an agent of the owner to maintain the housing accommodation in compliance with the statutory warranty of habitability. The law is also deletes provisions that permit an owner to abandon a preferential rent upon renewal of a lease.

JUSTIFICATION: As housing costs increase exponentially across the city of New York, the displacement of working families and middle class residents from rent regulated apartments has reached crisis proportions. Without question, the displacement is aggravated by the ability of landlords to abandon a preferential rent upon the renewal of a lease.

Prior to a change in law, a preferential rent was permanent for the duration of a tenancy, and could only be increased upon vacancy. However, as a result of an unfortunate provision inserted into the law during the eleventh hour in 2003, landlords are now permitted to abandon a discounted, preferential rent and impose the statutory rent upon vacancy or renewal of a lease. Pursuant to this provision, tenants throughout New York city have faced sudden, unanticipated and staggering rent increases upon lease renewal, often forcing them out of rent-regulated apartments.

Equally problematic, there is no "clean hands" requirement that the landlord conduct itself responsibly in order to abandon a preferential rent and impose the maximum rent upon a vacancy. Consequently, if a tenant leaves an apartment that is uninhabitable due to lack-of heat hot water, electricity, repairs or sanitary conditions, the landlord remains eligible to dramatically increase the rent upon vacancy of an apartment. As a result, current law encourages bad actors to deprive tenants of a habitable apartment in order to benefit from the ability to abandon a preferential rent.

In order to stem the displacement crisis in New York City, and preserve the affordable housing stock that remains available to working families and moderate-income residents, the rent regulation laws are in need of comprehensive reform. Substantial modification of the preferential rent provisions is an important step in that direction.

PRIOR LEGISLATIVE HISTORY: 2009-2010; S.2251/A.465-A 2011-2012: S.44-8

FISCAL IMPLICATIONS FOR STATE & LOCAL GOVERNMENTS: None.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 1775 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sens. KRUEGER, DIAZ, HASSELL-THOMPSON, HOYLMAN, PERALTA, PERKINS, SERRANO, STAVISKY -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the emergency tenant protection act of nineteen seven- ty-four and the administrative code of the city of New York, in relation to the regulation of rents THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision (a-2) of section 10 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, as amended by section 13 of part B of chapter 97 of the laws of 2011, is amended to read as follows: (a-2) Provides that where the amount of rent charged to and paid by the tenant is less than the legal regulated rent for the housing accom- modation, the amount of rent for such housing accommodation which may be charged [upon renewal or] upon vacancy thereof may, at the option of the owner, be based upon such previously established legal regulated rent, as adjusted by [the most recent] ALL applicable guidelines increases and other increases authorized by law; PROVIDED, HOWEVER, THAT SUCH VACANCY SHALL NOT BE CAUSED BY THE FAILURE OF THE OWNER OR AN AGENT OF THE OWNER, TO MAINTAIN THE HOUSING ACCOMMODATION IN COMPLIANCE WITH THE WARRANTY OF HABITABILITY SET FORTH IN SUBDIVISION ONE OF SECTION TWO HUNDRED THIRTY-FIVE-B OF THE REAL PROPERTY LAW. Where, subsequent to vacancy, such legal regulated rent, as adjusted by the most recent applicable guidelines increases and any other increases authorized by law is two thousand dollars or more per month or, for any housing accom- modation which is or becomes vacant on or after the effective date of the rent act of 2011, is two thousand five hundred dollars or more per month, such housing accommodation shall be excluded from the provisions
of this act pursuant to paragraph thirteen of subdivision a of section five of this act. S 2. Paragraph 14 of subdivision c of section 26-511 of the adminis- trative code of the city of New York, as amended by section 14 of part B of chapter 97 of the laws of 2011, is amended to read as follows: (14) provides that where the amount of rent charged to and paid by the tenant is less than the legal regulated rent for the housing accommo- dation, the amount of rent for such housing accommodation which may be charged [upon renewal or] upon vacancy thereof may, at the option of the owner, be based upon such previously established legal regulated rent, as adjusted by the most recent applicable guidelines increases and any other increases authorized by law; PROVIDED, HOWEVER, THAT SUCH VACANCY SHALL NOT BE CAUSED BY THE FAILURE OF THE OWNER OR AN AGENT OF THE OWNER, TO MAINTAIN THE HOUSING ACCOMMODATION IN COMPLIANCE WITH THE WARRANTY OF HABITABILITY SET FORTH IN SUBDIVISION ONE OF SECTION TWO HUNDRED THIRTY-FIVE-B OF THE REAL PROPERTY LAW. Where, subsequent to vacancy, such legal regulated rent, as adjusted by [the most recent] ALL applicable guidelines increases and any other increases authorized by law is two thousand dollars or more per month or, for any housing accom- modation which is or becomes vacant on or after the effective date of the rent act of 2011, is two thousand five hundred dollars or more per month, such housing accommodation shall be excluded from the provisions of this law pursuant to section 26-504.2 of this chapter. S 3. This act shall take effect immediately; provided, however, that the amendments to section 10 of the emergency tenant protection act of nineteen seventy-four made by section one of this act shall expire on the same date as such act expires and shall not affect the expiration of such act as provided in section 17 of chapter 576 of the laws of 1974; and provided, further, that the amendments to section 26-511 of the rent stabilization law of nineteen hundred sixty-nine made by section two of this act shall expire on the same date as such law expires and shall not affect the expiration of such law as provided under section 26-520 of such law.

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