Bill S7673-2013

Prohibits 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

Prohibits 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.

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  • May 27, 2014: REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT

Memo

BILL NUMBER:S7673

TITLE OF BILL: An act to amend chapter 576 of the laws of 1974 constituting the emergency tenant protection act of nineteen seventy-four and the administrative code of the city of New York, 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" and "collectable date," 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 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 and the administrative code of the city of New York 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 3 establishes the effective date.

JUSTIFICATION:

Under current law, 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.


Text

STATE OF NEW YORK ________________________________________________________________________ 7673 IN SENATE May 27, 2014 ___________
Introduced by Sen. ESPAILLAT -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend chapter 576 of the laws of 1974 constituting the emer- gency tenant protection act of nineteen seventy-four and the adminis- trative code of the city of New York, 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 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 6 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of nineteen seventy- four is amended by adding a new subdivision h to read as follows: H. NOTWITHSTANDING ANY PROVISION OF LAW OR RULE OR REGULATION TO THE CONTRARY, ANY ADJUSTMENT IN THE LEGAL REGULATED RENT BASED UPON A MAJOR CAPITAL IMPROVEMENT SHALL BE EFFECTIVE UPON APPROVAL OF THE APPLICATION THEREFOR. NO INCREASE MAY BE COLLECTED FOR THE PERIOD OF TIME PRIOR TO THE DATE OF APPROVAL OF THE APPLICATION. S 2. Section 26-512 of the administrative code of the city of New York is amended by adding a new subdivision g to read as follows: G. NOTWITHSTANDING ANY PROVISION OF LAW OR RULE OR REGULATION TO THE CONTRARY, ANY ADJUSTMENT IN THE LEGAL REGULATED RENT BASED UPON A MAJOR CAPITAL IMPROVEMENT SHALL BE EFFECTIVE UPON APPROVAL OF THE APPLICATION THEREFOR. NO INCREASE MAY BE COLLECTED FOR THE PERIOD OF TIME PRIOR TO THE DATE OF APPROVAL OF THE APPLICATION. S 3. This act shall take effect immediately; provided that: a. the amendments to section 4 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 b. the amendments to section 26-512 of chapter 4 of title 26 of the administrative code of the city of New York 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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