S T A T E   O F   N E W   Y O R K
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                                 7269--A

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               May 8, 2013
                               ___________

Introduced  by  M.  of  A.  BRAUNSTEIN  -- read once and referred to the
  Committee on Housing -- reported and  referred  to  the  Committee  on
  Codes  --  committee  discharged,  bill  amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the real property law, in relation to ground leases

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  real property law is amended by adding a new section
220-a to read as follows:
  S 220-A. GROUND LEASES. 1.  DEFINITIONS.  FOR  THE  PURPOSES  OF  THIS
SECTION  ONLY,  A  "GROUND LEASE" SHALL BE DEFINED AS A RENTAL AGREEMENT
THAT:
  (A) HAS A TERM OF AT LEAST TEN YEARS;
  (B) IS FOR THE USE OF REAL PROPERTY, WHICH MAY OR MAY NOT INCLUDE  ANY
IMPROVEMENTS  OR  STRUCTURES, BUT SHALL NOT APPLY TO REAL PROPERTY OWNED
AS THE COMMON PROPERTY OF ANY INDIAN NATION,  TRIBE,  OR  BAND  AS  SUCH
LANDS ARE DESCRIBED UNDER AND PROTECTED BY INDIAN LAW AND/OR TITLE 25 OF
THE UNITED STATES CODE; AND
  (C)  ALLOWS  A TENANT TO CONSTRUCT OR SUBSTANTIALLY IMPROVE, RENOVATE,
OR REHABILITATE STRUCTURES OR IMPROVEMENTS UPON SUCH REAL PROPERTY.
  2. REFINANCING. (A) IF ANY  GROUND  LEASE  DOES  NOT  CONTAIN  EXPRESS
PROVISIONS  PROHIBITING  A  LESSEE  FROM  ENCUMBERING  ITS INTEREST IN A
GROUND LEASE, A LESSEE MAY ENCUMBER  UP  TO  AND  INCLUDING  ITS  ENTIRE
INTEREST  IN SUCH GROUND LEASE. IF SUCH GROUND LEASE CONTAINS PROVISIONS
RESTRICTING THE LESSEE'S ABILITY TO ENCUMBER ITS  INTEREST,  THE  LESSEE
MUST OBTAIN THE LESSOR'S WRITTEN PERMISSION PRIOR TO SUCH ENCUMBRANCE.
  (B)  IF  THE  LESSEE  IS REQUIRED TO OBTAIN THE LESSOR'S PERMISSION TO
ENCUMBER THE LESSEE'S INTEREST, THE LESSOR MAY ONLY REFUSE TO GRANT SUCH
PERMISSION FOR REASONABLE CAUSE AND MUST PROVIDE THE LESSEE WITH A WRIT-
TEN STATEMENT THAT SETS FORTH THE BASIS FOR THE REFUSAL  WITHIN  FIFTEEN
DAYS OF A WRITTEN REQUEST FOR PERMISSION FROM THE LESSEE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10836-02-3
              

A. 7269--A                          2

  (C)  ANY  GROUND LEASE PROVISION THAT LIMITS THE AMOUNT A LESSEE COULD
ENCUMBER ITS INTEREST, UP TO AND INCLUDING ITS ENTIRE INTEREST  IN  SUCH
GROUND LEASE, SHALL ALSO ADJUST SUCH AMOUNT ANNUALLY ON THE FIRST DAY OF
OCTOBER  OF EACH YEAR BY THE CHANGE IN THE REGIONAL CONSUMER PRICE INDEX
FOR  ALL  URBAN  CONSUMERS,  NEW  YORK-NORTHERN  NEW JERSEY-LONG ISLAND,
NY-NJ-CT-PA, AS ESTABLISHED THE PRECEDING AUGUST.
  IF A LESSEE HAS ENCUMBERED ITS INTEREST IN A GROUND LEASE, NO  ADJUST-
MENT  PURSUANT  TO  THIS  PARAGRAPH  THAT REDUCES THE AMOUNT SUCH LESSEE
COULD RECEIVE SHALL BE CONSIDERED A BREACH OF THE  GROUND  LEASE.    ANY
AGREEMENT  BY  A LESSEE WAIVING OR MODIFYING THE PROVISIONS AS SET FORTH
IN THIS PARAGRAPH SHALL BE VOID AS CONTRARY TO PUBLIC POLICY.
  S 2. This act shall take effect immediately.