Provides that receivership shall not be material nor a defense to the appointment of an administrator, pursuant to provisions of the real property actions and proceedings law relating to special proceedings by tenants of dwellings in the city of New York, to deposit rent and make repairs to multiple dwellings, although a receiver in foreclosure may participate in such proceeding and may be appointed as administrator if the court so decides; provides that a receiver need not be named as a party or served with process in such special proceeding; requires receiver to register with the municipal department within seven days of appointment or else any action taken by such receiver may be voided by the court.
TITLE OF BILL: An act to amend the real property actions and proceedings law, in relation to proceedings to deposit rents
PURPOSE/SUMMARY OF PROVISIONS: This bill would amend the real property actions and proceedings law by adding a new section seven hundred seventy-three, a new subdivision eight under section seven hundred seventy-eight, and three new subdivisions, four, five and six, under section thirteen hundred twenty-five. This bill has been introduced as a result of the Gomez vs. Smith Williamsburg Better Housing Court decision filed in Kings County, Trial Term, Part 35A. The purpose of this bill is to prevent slum-mortgagees from using the issue of receivership as a tactic to delay the implementation of article 7-A proceedings. The bill would establish that receivership shall not be adjourned, dismissed or delayed because the petitioner has not requested or received prior approval from the supreme court, the supreme court has not authorized such a lawsuit against a receiver or the receiver has not been named or served with process in such proceeding. Provides that the existence of a receiver prior to the judgement or appointment of an administrator in such proceeding, shall not affect the court's capacity to appoint or continue the appointment of such administrator. The court may appoint an existing receiver as an administrator when it is convinced that such receiver will take responsibility for correcting all existing violations and dangerous conditions to the dwelling. Lastly, the bill puts the receiver at risk if the court order appointing him in a foreclosure proceeding does not include the information mandated by the legislature in subdivision 3 of section 1325. Also, mandates that a receiver must register with the code enforcement agency within seven days after being appointed receiver, receivership order is void and receiver is stayed from commencing any action until he is registered. Eliminates any requirement to request, or receive, supreme court approval before a tenant or a municipal agent may commence an action against a receiver.
JUSTIFICATION: Article 7-A provides a method for tenants and municipal authorities to use rents, and other funds, to improve slum buildings where the owners and mortgagees did not correct housing code violations and/or hazardous conditions. However, some landlords and mortgagees attempt to use misrepresentations, delaying tactics and total disregard of provisions, in order to frustrate the legislative intent of this law. This bill would amend the law to prohibit slum-mortgagees from arguing that the receiver in a foreclosure should displace the 7-A administrator or that the petitioners in the proceeding have not gotten prior supreme court approval. This bill would also clarify the
section of the RPAPL which applies to the responsibility of a receiver in a foreclosure and provides an enforcement mechanism for ensuring that the receiver adheres to these responsibilities.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect on the first of October next succeeding the date on which it shall have become a law.
STATE OF NEW YORK ________________________________________________________________________ 1960 2011-2012 Regular Sessions IN SENATE January 14, 2011 ___________Introduced by Sen. KRUGER -- 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 real property actions and proceedings law, in relation to proceedings to deposit rents THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property actions and proceedings law is amended by adding a new section 773-a to read as follows: S 773-A. RECEIVERSHIP NOT MATERIAL. 1. RECEIVERSHIP SHALL NOT BE A DEFENSE TO ANY SPECIAL PROCEEDING PURSUANT TO THIS ARTICLE AND NO SUCH PROCEEDING SHALL BE ADJOURNED, DELAYED OR DISMISSED EITHER BECAUSE THE PETITIONER HAS NOT OR PETITIONERS HAVE NOT REQUESTED OR RECEIVED APPROVAL OF SUCH PROCEEDING BY THE SUPREME COURT OR A LAWSUIT HAS NOT BEEN AUTHORIZED AGAINST A RECEIVER APPOINTED BY SUCH COURT OR A RECEIVER HAS NOT BEEN NAMED OR SERVED WITH PROCESS IN SUCH PROCEEDING. 2. THIS SECTION SHALL NOT PROHIBIT A RECEIVER IN FORECLOSURE FROM PARTICIPATION IN SUCH PROCEEDING, IF SUCH RECEIVER SO DESIRES. S 2. Section 778 of the real property actions and proceedings law is amended by adding a new subdivision 11 to read as follows: 11. THE EXISTENCE OF A RECEIVER FOR THE DWELLING PRIOR TO THE COMMENCEMENT OF THE PROCEEDING, OR APPLICATION FOR OR APPOINTMENT OF A RECEIVER AT ANY TIME PRIOR TO JUDGMENT OR APPOINTMENT OF AN ADMINISTRA- TOR PURSUANT TO THIS ARTICLE, SHALL NOT AFFECT THE POWER OF THE COURT TO APPOINT OR CONTINUE THE APPOINTMENT OF SUCH AN ADMINISTRATOR, EXCEPT THAT THE RIGHTS OF THE OWNER, INCLUDING THE RIGHTS TO ANY SURPLUS PURSU- ANT TO PARAGRAPH (E) OF SUBDIVISION ONE OF THIS SECTION, SHALL PASS TO THE RECEIVER. IF SUCH RECEIVER HAS BEEN APPOINTED PRIOR TO APPOINTMENT OF AN ADMINISTRATOR, THE COURT MAY APPOINT SUCH RECEIVER AS ADMINISTRA- TOR UNDER CIRCUMSTANCES WHERE IT IS CONVINCED THAT SUCH RECEIVER WILLEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07089-01-1 S. 1960 2
PROPERLY UNDERTAKE RESPONSIBILITY FOR CORRECTING ALL THE VIOLATIONS AND DANGEROUS CONDITIONS, AND PROVIDE NECESSARY SERVICES TO THE DWELLING. S 3. Section 1325 of the real property actions and proceedings law is amended by adding three new subdivisions 4, 5 and 6 to read as follows: 4. ANY ORDER PURSUANT TO THIS ARTICLE WHICH DOES NOT INCLUDE THE PROVISIONS REQUIRED BY SUBDIVISION THREE OF THIS SECTION, SHALL BE VOID- ABLE. 5. IF ANY RECEIVER DOES NOT REGISTER WITH THE MUNICIPAL DEPARTMENT WITHIN SEVEN DAYS AFTER THE DATE OF THE ORDER APPOINTING SUCH RECEIVER, ALL ACTIONS TAKEN BY SUCH RECEIVER AFTER SAID SEVENTH DAY MAY BE VOIDED BY THE COURT; SUCH RECEIVER IS STAYED FROM COMMENCING ANY ACTIONS IN ANY COURT UNTIL HE OR SHE IS SO REGISTERED. 6. WHEN ANY RECEIVER IS APPOINTED PURSUANT TO THIS SECTION, NO TENANT OR MUNICIPAL AGENCY IS REQUIRED TO GET PRIOR APPROVAL FROM THE SUPREME COURT BEFORE COMMENCING ANY ACTION AGAINST SAID RECEIVER. S 4. This act shall take effect on the first of October next succeed- ing the date on which it shall have become a law.