BILL NUMBER: S2980C
SPONSOR: KAVANAGH
 
TITLE OF BILL:
An act to amend the administrative code of the city of New York and the
emergency tenant protection act of nineteen seventy-four, in relation to
establishing the legal regulated rent for the combination of two or
more vacant apartments; to amend the public housing law, in relation to
defining permanently vacated; to amend the emergency tenant protection
act of nineteen seventy-four, in relation to exemptions from rent
stabilization on the basis of substantial rehabilitation; and to repeal
paragraph (d) of subdivision 4 of section 14 of the public housing law,
in relation thereto (Part A); to define clearly the scope of the fraud
exception to the pre-HSTPA four-year rule for calculating rents (Part
B); and to amend the administrative code of the city of New York, the
emergency tenant protection act of nineteen seventy-four and the public
housing law, in relation to the failure of owners to file rent registra-
tion statements and the enforcement powers of the commissioner of hous-
ing and community renewal (Part C)
 
PURPOSE:
The legislature passed the Housing Stability and Tenant Protection Act
of 2019 to transform and strengthen many of our state's laws that
protect tenants and provide housing stability. This bill seeks to
address certain gaps in these laws that persist after that landmark
legislation and to make some technical corrections.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill sets forth the structure of the bill, with three
components Parts A, B, and C.
PART A
Section 1 of Part A of the bill amends subdivision c of section 26-511
of the administrative code of the city of New York by adding a new para-
graph 15.
Part (a) of the new paragraph 15 provides that where a landlord combines
two or more vacant rent stabilized apartments, the legal regulated rent
for the combined apartment shall be the sum of the rents of the formerly
separate apartments. If a non-regulated apartment is combined with a
regulated apartment, the resulting apartment shall be subject to rent
regulation.
Part (b) of the new paragraph 15 provides that where a landlord substan-
tially increases the outer dimensions of a unit, the initial legal regu-
lated rent for that unit shall be its prior rent plus a percentage of
rent that is equal to the percentage by which the unit has increased.
Other authorized increases may also apply.
Part (c) of the new paragraph 15 provides for the denial of rent
increases if vacancy had previously occurred due to harassment, fraud,
or other acts of evasion.
Part (d) of the new paragraph 15 provides that where the units are
combined pursuant to a federal, state, or local regulatory agreement,
the rent of the combined units shall be the amount of an initial rent
set by the regulatory agency.
Part (e) of the new paragraph 15 provides that where a landlord substan-
tially reduces the dimensions of a unit, the initial legal regulated
rent for the reduced apartment shall be the prior rent reduced in
proportion to the reduction in floor area. Other authorized increases
may also apply.
Part (f) of the new paragraph 15 specifies guidelines as to the manner
in which provisions governing individual apartment improvements may
apply to the combination of units.
Part (g) of the new paragraph 15 requires owners to maintain records and
rent histories of all combined apartments before and after combination.
Section 2 of Part A amends subdivision (a) of section 10-b of the emer-
gency tenant protection act of 1974 by adding a new paragraph 13 in the
same manner as Section 1 of the bill amends the New York city adminis-
trative code, as described above.
Section 3 of Part A of the bill amends the opening paragraph of para-
graph (a) of subdivision 4 of section 14 of the public housing law to
define the term "permanently vacated" for the purpose of determining
succession rights of a member of a tenant's family.
Section 4 of Part A of the bill repeals paragraph (d) of subdivision 4
of section 14 of the Public Housing Law relating to the vacancy bonus
and references, which were repealed as part of the HSTPA.
Section 5 of Part A of the bill amends paragraph 5 of subdivision a of
section 5 of section 4 of chapter 576 of the laws of 1974 constituting
the emergency tenant protection act of 1974 to clarify and limit the
circumstances in which a landlord may claim exemption from rent stabili-
zation on the basis of substantial rehabilitation, and to require
approval for such claim by the division of housing and community
renewal.
Section 6 of Part A of the bill sets forth the effective date for Part
A, providing that it shall take effect immediately and shall apply to
all pending proceedings on and after such date; provided that the amend-
ments to section 26-511 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.
PART B
Section 1 of Part B of the bill sets forth the legislative findings.
Section 2 of Part B of the bill sets forth various provisions regarding
the use, retention, and destruction of certain records, the circum-
stances in which a landlord shall be deemed to have committed fraud when
unlawfully deregulating or failing to register an apartment, and other
matters.
Section 3 of Part B of the bill sets forth the effective date for Part
B, providing that it shall take effect immediately.
PART C
Sections 1 and 2 of Part C of the bill amends the administrative code of
the City of New York and the emergency tenant protection act of nineteen
seventy-four, respectively, to establish a penalty for building owners'
failure to file a timely rent registration statement with the NYS Divi-
sion of Housing and Community Renewal for rent-regulated apartments. An
owner shall be fined $500 per unregistered unit for each month a regis-
tration is delinquent, and such fine shall be subject to enforcement in
court.
Section 1 of Part C of the bill amends subdivision e of section 26-517
of the administrative code of the City of New York for that purpose.
Section 2 of Part C of the bill amends subdivision e of section 12-a of
section 4 of chapter 576 of the laws of 1974, constituting the emergency
tenant protection act of nineteen seventy-four, for the same purpose.
Section 3 of Part C of the bill amends subdivision 1 of section 14 of
the public housing law by adding a new paragraph (x) to specify as
powers and duties of the commissioner of the Division of Housing and
Community Renewal their enforcement authority over all the laws, rules,
and regulations related to housing that is financed, administered, over-
seen, or otherwise regulated by the agency.
Section 4 of Part C of the bill sets forth the effective date for Part
C, providing that it shall take effect immediately, provided that the
amendments to section 26-517 of chapter 4 of title 26 of the administra-
tive code of the city of New York made by section one 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.
Section 2 of the bill sets forth a severability clause.
Section 3 of the bill sets forth the effective date.
 
JUSTIFICATION:
The Housing Stability and Tenant Protection Act of 2019 (HSTPA) trans-
formed and strengthened many of the state's laws that protect tenants
and provide housing stability. This bill seeks to address certain gaps
in these laws that persist after that landmark legislation in the vari-
ous ways detailed in the summary of provisions above and to make some
technical corrections.
Part A
Section 1 and Section 2
On August 31, 2022, NYS Homes and Community Renewal (HCR) released
proposed updates to the regulations authorized under the rent stabiliza-
tion laws, including language that would address the combination of
rent-regulated units (a practice sometimes popularly known as "franken-
steining"), which has enabled owners to set a new first rent for the
combined unit, often at a much higher level than the rents of the once
separate apartments. Adopting HCR's proposed regulations in statute
would address this issue and ensure combined units remain at a level of
affordability that matches the increases or reductions in unit size.
Section 3
This part also defines what constitutes "permanently vacated," with the
goal of providing clarity on instances where a tenant's move-out may not
correspond with the end of a lease or the termination of rent payments.
This is needed to address the fact that courts have differed in their
interpretation of current law, with the first and second appellate divi-
sions holding different views. The provisions of this bill would conform
the rule to the second department's position, to ensure that family
members eligible for succession do not lose their rights because of a
delay in reporting vacatur to the landlord.
Section 4
The HSTPA repealed vacancy bonuses for rent regulated units in all
sections of law referenced in this paragraph.
Section 5
By requiring owners to seek and secure approval from HCR prior to claim-
ing rent stabilization exemption on the basis of substantial rehabili-
tation, the added level of agency oversight would prevent the destabili-
zation of units where owners fail to substantiate their claims of having
substantial work performed that merits exemption from rent stabiliza-
tion.
Part B
Part F of the HSTPA allowed HCR or a court to review six years of rent
history when determining rent overcharges. Since then, the Court of
Appeals limited the retroactive application of these provisions when it
comes to overcharges and the requirement that property owners reimburse
tenants for illegally charged rents.
This amendment will help clarify the purpose of Part F of HSTPA in order
to effectuate the legislature's original intent in enacting the
provision. These amendments will address the Court of Appeals' concerns
regarding constitutional limitations and will make litigation less
necessary with regard to certain issues that have not been settled by
the courts. In particular, this bill will clarify the prospective reach
of certain provisions of Part F, in light of recent court decisions
including Regina Metro v. DHCR.
PART C
Sections 1 and 2
Owners of rent-regulated housing are required to submit annual registra-
tion statements for each regulated unit under their ownership by no
later than July 31 of each year. However, the current penalty for fail-
ure to submit a timely registration is half of the rent registration
filing fee of $20, or a mere $10 per apartment -- hardly a deterrent for
noncompliance. Increasing the late- registration fee to $500 per unit
per month of delinquency would prescribe a level of penalty that owners
would be more likely to avoid and would result in more on-time rent
registrations filings.
Section 3
HCR is the agency designated in numerous laws and regulations to promul-
gate rules, administer, supervise, and enforce housing-related policies,
programs, and financing activities. This section grants the HCR commis-
sioner the necessary enforcement powers to carry out the duties required
of the agency.
 
LEGISLATIVE HISTORY:
2021-2022: S7213A (Kavanagh) - referred to Housing
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Minimal.
 
EFFECTIVE DATE:
This act shall take effect immediately provided, however, that the
applicable effective date of Parts A through C of this act shall be as
specifically set forth in the last section of such Parts.

Statutes affected:
S2980: 14 public housing law, 14(4) public housing law, 302-a multiple dwelling law, 302-a(3) multiple dwelling law
S2980A: 14 public housing law, 14(4) public housing law, 302-a multiple dwelling law, 302-a(3) multiple dwelling law
S2980B: 14 public housing law, 14(4) public housing law, 302-a multiple dwelling law, 302-a(3) multiple dwelling law, 14(1) public housing law
S2980C: 14 public housing law, 14(4) public housing law, 14(1) public housing law