S 1020: Requires thirty days notice be provided to tenants prior to the beginning of work on a major capital improvement.

  
  STATE OF NEW YORK ________________________________________________________________________ 1020 2025-2026 Regular Sessions  IN SENATE (Prefiled) January 8, 2025 ___________ Introduced by Sen. JACKSON -- 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 administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four and the emer- gency housing rent control law, in relation to requiring notice be provided to tenants prior to the beginning of work on a major capital improvement The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section 2 26-405 of the administrative code of the city of New York, as amended by 3 section 27 of part Q of chapter 39 of the laws of 2019, is amended to 4 read as follows: 5 (g) There has been since July first, nineteen hundred seventy, a major 6 capital improvement essential for the preservation energy efficiency, 7 functionality, or infrastructure of the entire building, improvement of 8 the structure including heating, windows, plumbing and roofing but shall 9 not be for operational costs or unnecessary cosmetic improvements. The 10 temporary increase based upon a major capital improvement under this 11 subparagraph for any order of the commissioner issued after the effec- 12 tive date of [the] part K of chapter thirty-six of the laws of two thou- 13 sand nineteen [that amended this subparagraph] shall be in an amount 14 sufficient to amortize the cost of the improvements pursuant to this 15 subparagraph (g) over a twelve-year period for buildings with thirty- 16 five or fewer units or a twelve and one-half year period for buildings 17 with more than thirty-five units, and shall be removed from the legal 18 regulated rent thirty years from the date the increase became effective 19 inclusive of any increases granted by the applicable rent guidelines 20 board. Temporary major capital improvement increases shall be collect- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02943-01-5 
 S. 1020 2 1 ible prospectively on the first day of the first month beginning sixty 2 days from the date of mailing notice of approval to the tenant. Such 3 notice shall disclose the total monthly increase in rent and the first 4 month in which the tenant would be required to pay the temporary 5 increase. An approval for a temporary major capital improvement increase 6 shall not include retroactive payments. The collection of any increase 7 shall not exceed two percent in any year from the effective date of the 8 order granting the increase over the rent set forth in the schedule of 9 gross rents, with collectability of any dollar excess above said sum to 10 be spread forward in similar increments and added to the rent as estab- 11 lished or set in future years. Upon vacancy, the landlord may add any 12 remaining balance of the temporary major capital improvement increase to 13 the legal regulated rent. Notwithstanding any other provision of the 14 law, for any renewal lease commencing on or after June 14, 2019, the 15 collection of any rent increases due to any major capital improvements 16 approved on or after June 16, 2012 and before June 16, 2019 shall not 17 exceed two percent in any year for any tenant in occupancy on the date 18 the major capital improvement was approved. To be eligible for a tempo- 19 rary rent increase based upon a major capital improvement under this 20 subparagraph, notice shall be required to be provided to tenants prior 21 to the beginning of work on such major capital improvement, or 22 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra- 23 tive code of the city of New York, as separately amended by section 12 24 of part K of chapter 36 and section 28 of part Q of chapter 39 of the 25 laws of 2019, is amended to read as follows: 26 (6) provides criteria whereby the commissioner may act upon applica- 27 tions by owners for increases in excess of the level of fair rent 28 increase established under this law provided, however, that such crite- 29 ria shall provide (a) as to hardship applications, for a finding that 30 the level of fair rent increase is not sufficient to enable the owner to 31 maintain approximately the same average annual net income (which shall 32 be computed without regard to debt service, financing costs or manage- 33 ment fees) for the three year period ending on or within six months of 34 the date of an application pursuant to such criteria as compared with 35 annual net income, which prevailed on the average over the period nine- 36 teen hundred sixty-eight through nineteen hundred seventy, or for the 37 first three years of operation if the building was completed since nine- 38 teen hundred sixty-eight or for the first three fiscal years after a 39 transfer of title to a new owner provided the new owner can establish to 40 the satisfaction of the commissioner that [he or she] such owner 41 acquired title to the building as a result of a bona fide sale of the 42 entire building and that the new owner is unable to obtain requisite 43 records for the fiscal years nineteen hundred sixty-eight through nine- 44 teen hundred seventy despite diligent efforts to obtain same from prede- 45 cessors in title and further provided that the new owner can provide 46 financial data covering a minimum of six years under [his or her] such 47 owner's continuous and uninterrupted operation of the building to meet 48 the three year to three year comparative test periods herein provided; 49 and (b) as to completed building-wide major capital improvements, for a 50 finding that such improvements are deemed depreciable under the Internal 51 Revenue Code and that the cost is to be amortized over a twelve-year 52 period for a building with thirty-five or fewer housing accommodations, 53 or a twelve and one-half-year period for a building with more than thir- 54 ty-five housing accommodations, for any determination issued by the 55 division of housing and community renewal after the effective date of 56 [the the] part K of chapter thirty-nine of the laws of two thousand 
 S. 1020 3 1 nineteen [that amended this paragraph] and shall be removed from the 2 legal regulated rent thirty years from the date the increase became 3 effective inclusive of any increases granted by the applicable rent 4 guidelines board. Temporary major capital improvement increases shall be 5 collectible prospectively on the first day of the first month beginning 6 sixty days from the date of mailing notice of approval to the tenant. 7 Such notice shall disclose the total monthly increase in rent and the 8 first month in which the tenant would be required to pay the temporary 9 increase. An approval for a temporary major capital improvement increase 10 shall not include retroactive payments. The collection of any increase 11 shall not exceed two percent in any year from the effective date of the 12 order granting the increase over the rent set forth in the schedule of 13 gross rents, with collectability of any dollar excess above said sum to 14 be spread forward in similar increments and added to the rent as estab- 15 lished or set in future years. Upon vacancy, the landlord may add any 16 remaining balance of the temporary major capital improvement increase to 17 the legal regulated rent. Notwithstanding any other provision of the 18 law, for any renewal lease commencing on or after June 14, 2019, the 19 collection of any rent increases due to any major capital improvements 20 approved on or after June 16, 2012 and before June 16, 2019 shall not 21 exceed two percent in any year for any tenant in occupancy on the date 22 the major capital improvement was approved or based upon cash purchase 23 price exclusive of interest or service charges. To be eligible for a 24 temporary rent increase based upon a major capital improvement under 25 this paragraph, notice shall be required to be provided to tenants prior 26 to the beginning of work on such major capital improvement. Where an 27 application for a temporary major capital improvement increase has been 28 filed, a tenant shall have sixty days from the date of mailing of a 29 notice of a proceeding in which to answer or reply. The state division 30 of housing and community renewal shall provide any responding tenant 31 with the reasons for the division's approval or denial of such applica- 32 tion. Notwithstanding anything to the contrary contained herein, no 33 hardship increase granted pursuant to this paragraph shall, when added 34 to the annual gross rents, as determined by the commissioner, exceed the 35 sum of, (i) the annual operating expenses, (ii) an allowance for manage- 36 ment services as determined by the commissioner, (iii) actual annual 37 mortgage debt service (interest and amortization) on its indebtedness to 38 a lending institution, an insurance company, a retirement fund or 39 welfare fund which is operated under the supervision of the banking or 40 insurance laws of the state of New York or the United States, and (iv) 41 eight and one-half percent of that portion of the fair market value of 42 the property which exceeds the unpaid principal amount of the mortgage 43 indebtedness referred to in subparagraph (iii) of this paragraph. Fair 44 market value for the purposes of this paragraph shall be six times the 45 annual gross rent. The collection of any increase in the stabilized rent 46 for any apartment pursuant to this paragraph shall not exceed six 47 percent in any year from the effective date of the order granting the 48 increase over the rent set forth in the schedule of gross rents, with 49 collectability of any dollar excess above said sum to be spread forward 50 in similar increments and added to the stabilized rent as established or 51 set in future years; 52 § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter 53 576 of the laws of 1974, constituting the emergency tenant protection 54 act of nineteen seventy-four, as amended by section 26 of part Q of 55 chapter 39 of the laws of 2019, is amended to read as follows: 
 S. 1020 4 1 (3) there has been since January first, nineteen hundred seventy-four 2 a major capital improvement essential for the preservation, energy effi- 3 ciency, functionality, or infrastructure of the entire building, 4 improvement of the structure including heating, windows, plumbing and 5 roofing, but shall not be for operation costs or unnecessary cosmetic 6 improvements. An adjustment under this paragraph shall be in an amount 7 sufficient to amortize the cost of the improvements pursuant to this 8 paragraph over a twelve-year period for a building with thirty-five or 9 fewer housing accommodations, or a twelve and one-half period for a 10 building with more than thirty-five housing accommodations and shall be 11 removed from the legal regulated rent thirty years from the date the 12 increase became effective inclusive of any increases granted by the 13 applicable rent guidelines board, for any determination issued by the 14 division of housing and community renewal after the effective date of 15 the chapter of the laws of two thousand nineteen that amended this para- 16 graph. Temporary major capital improvement increases shall be collecta- 17 ble prospectively on the first day of the first month beginning sixty 18 days from the date of mailing notice of approval to the tenant. Such 19 notice shall disclose the total monthly increase in rent and the first 20 month in which the tenant would be required to pay the temporary 21 increase. An approval for a temporary major capital improvement increase 22 shall not include retroactive payments. The collection of any increase 23 shall not exceed two percent in any year from the effective date of the 24 order granting the increase over the rent set forth in the schedule of 25 gross rents, with collectability of any dollar excess above said sum to 26 be spread forward in similar increments and added to the rent as estab- 27 lished or set in future years. Upon vacancy, the landlord may add any 28 remaining balance of the temporary major capital improvement increase to 29 the legal regulated rent. Notwithstanding any other provision of the 30 law, the collection of any rent increases for any renewal lease commenc- 31 ing on or after June 14, 2019, due to any major capital improvements 32 approved on or after June 16, 2012 and before June 16, 2019 shall not 33 exceed two percent in any year for any tenant in occupancy on the date 34 the major capital improvement was approved. To be eligible for a tempo- 35 rary rent increase based upon a major capital improvement under this 36 paragraph, notice shall be required to be provided to tenants prior to 37 the beginning of work on such major capital improvement, or 38 § 4. Subparagraph 7 of the second undesignated paragraph of paragraph 39 (a) of subdivision 4 of section 4 of chapter 274 of the laws of 1946, 40 constituting the emergency housing rent control law, as separately 41 amended by section 25 of part Q of chapter 39 and section 14 of part K 42 of chapter 36 of the laws of 2019, is amended to read as follows: 43 (7) there has been since March first, nineteen hundred fifty, a major 44 capital improvement essential for the preservation, energy efficiency, 45 functionality, or infrastructure of the entire building, improvement of 46 the structure including heating, windows, plumbing and roofing, but 47 shall not be for operational costs or unnecessary cosmetic improvements; 48 which for any order of the commissioner issued after the effective date 49 of [the] part K of chapter thirty-six of the laws of two thousand nine- 50 teen [that amended this paragraph] the cost of such improvement shall be 51 amortized over a twelve-year period for buildings with thirty-five or 52 fewer units or a twelve and one-half year period for buildings with more 53 than thirty-five units, and shall be removed from the legal regulated 54 rent thirty years from the date the increase became effective inclusive 55 of any increases granted by the applicable rent guidelines board. Tempo- 56 rary major capital improvement increases shall be collectible prospec- 
 S. 1020 5 1 tively on the first day of the first month beginning sixty days from the 2 date of mailing notice of approval to the tenant. Such notice shall 3 disclose the total monthly increase in rent and the first month in which 4 the tenant would be required to pay the temporary increase. An approval 5 for a temporary major capital improvement increase shall not include 6 retroactive payments. The collection of any increase shall not exceed 7 two percent in any year from the effective date of the order granting 8 the increase over the rent set forth in the schedule of gross rents, 9 with collectability of any dollar excess above said sum to be spread 10 forward in similar increments and added to the rent as established or 11 set in future years. Upon vacancy, the landlord may add any remaining 12 balance of the temporary major capital improvement increase to the legal 13 regulated rent. Notwithstanding any other provision of the law, for any 14 renewal lease commencing on or after June 14, 2019, the collection of 15 any rent increases due to any major capital improvements approved on or 16 after June 16, 2012 and before June 16, 2019 shall not exceed two 17 percent in any year for any tenant in occupancy on the date the major 18 capital improvement was approved; provided, however, to be eligible for 19 a temporary rent increase based upon a major capital improvement under 20 this subparagraph, notice shall be required to be provided to tenants 21 prior to the beginning of work on such major capital improvement; 22 provided, however, where an application for a temporary major capital 23 improvement increase has been filed, a tenant shall have sixty days from 24 the date of mailing of a notice of a proceeding in which to answer or 25 reply. The state division of housing and community renewal shall provide 26 any responding tenant with the reasons for the division's approval or 27 denial of such application; or 28 § 5. This act shall take effect on the ninetieth day after it shall 29 have become a law; provided that: 30 (a) the amendments to section 26-405 of the city rent and rehabili- 31 tation law made by section one of this act shall remain in full force 32 and effect only as long as the public emergency requiring the regulation 33 and control of residential rents and evictions continues, as provided in 34 subdivision 3 of section 1 of the local emergency housing rent control 35 act; and 36 (b) the amendments to section 26-511 of chapter 4 of title 26 of the 37 administrative code of the city of New York made by section two of this 38 act shall expire on the same date as such law expires and shall not 39 affect the expiration of such law as provided under section 26-520 of 40 such law.