BILL NUMBER:S3782

TITLE OF BILL:

An act to amend chapter 576 of the laws of 1974 constituting the
emergency tenant protection act of nineteen seventy-four, in relation
to prohibiting the collection of rent arrearages accruing prior to the
date of approval of an application for an adjustment in the legal
regulated rent based upon a major capital improvement

PURPOSE:

This bill prohibits the temporary retroactive rent increase or
surcharge prior to the approval of the MCI application for rent
stabilized apartments. Under current law, landlords are entitled to
collect a retroactive surcharge, which is the amount owed between the
effective date and the collectable date of the DHCR order granting the
MCI. If the application is approved, in addition to the increase
becoming a part of the tenants' base rent, the landlord is entitled to
collect the increase retroactively, between the "effective date" (the
date of the first rent payment 30 days after the tenant is notified
notified by DHCR that a complete application was filed) and
"collectable date" (the MCI is approved) in the form of a temporary
surcharge. The rent increase (the surcharge and the base rent
increase) cannot be collected from the tenants until the application
is approved, so the surcharge is collected temporarily in addition to
              

the increased base rent after the collectable date. This bill would
bringing rent stabilized apartments in line with rent controlled
apartments, eliminating the retroactive temporary surcharge and
allowing landlords to begin collecting the increased base rent only
upon the collectable date or the date the application is approved.

SUMMARY OF PROVISIONS:

Section 1 amends Section 6 of section 4 of chapter 576 of the laws of
1974 by adding a new subdivision prohibiting any adjustment in the
legal regulated rent based upon a major capital improvement until the
date of approval of the application.

Section 2 establishes the effective date.

JUSTIFICATION:

Under current law for rent stabilized tenants, in addition to the cost
of a MCI becoming part of the tenants' base rent, the landlord is
entitled to collect a temporary retroactive surcharge, which is the
amount owed between the effective date and the collectable date of the
DHCR order granting the MCI. This bill will eliminate the undue burden
created by the combined effect of the permanence of the increase and
the retroactive temporary surcharge by eliminating the temporary
surcharge. This will create consistency between rent stabilized and
rent controlled apartments, eliminating the retroactive temporary
surcharge and allowing landlords to begin collecting the increased
base rent upon the collectable date or the date the application is
approved.

LEGISLATIVE HISTORY:


None

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately.