S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10281
 
                           I N  A S S E M B L Y
 
                               May 13, 2022
                                ___________
 
 Introduced by COMMITTEE ON RULES -- (at request of M. of A. Mitaynes) --
   read once and referred to the Committee on Housing
 
 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 the amount of  time  to
   submit supporting documentation for major capital improvements

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subdivision  g  of  section  26-405  of  the
 administrative  code  of the city of New York is amended by adding a new
 subparagraph (g-1) to read as follows:
   (G-1) NO INCREASE FOR MAJOR CAPITAL IMPROVEMENTS SHALL BE  GRANTED  TO
 ANY  LANDLORD  OR  PROPERTY  OWNER,  UNLESS AN APPLICATION INCLUDING ALL
 NECESSARY DOCUMENTATION ARE SUBMITTED WITHIN  ONE  HUNDRED  TWENTY  DAYS
 AFTER  THE COMPLETION OF THE NEW INSTALLATION OR IMPROVEMENT OR IMPROVE-
 MENTS.
   § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
 tive code of the city of New York, as separately amended by  section  12
 of  part  K  of chapter 36 and section 28 of part Q of chapter 39 of the
 laws of 2019, is amended to read as follows:
   (6) provides criteria whereby the commissioner may act  upon  applica-
 tions  by  owners  for  increases  in  excess  of the level of fair rent
 increase established under this law provided, however, that such  crite-
 ria  shall  provide  (a) as to hardship applications, for a finding that
 the level of fair rent increase is not sufficient to enable the owner to
 maintain approximately the same average annual net income  (which  shall
 be  computed  without regard to debt service, financing costs or manage-
 ment fees) for the three year period ending on or within six  months  of
 the  date  of  an application pursuant to such criteria as compared with
 annual net income, which prevailed on the average over the period  nine-
 teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
 first three years of operation if the building was completed since nine-
 teen hundred sixty-eight or for the first three  fiscal  years  after  a
 transfer of title to a new owner provided the new owner can establish to
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07648-01-1
 A. 10281                            2
 
 the  satisfaction  of  the commissioner that he or she acquired title to
 the building as a result of a bona fide sale of the entire building  and
 that  the new owner is unable to obtain requisite records for the fiscal
 years  nineteen  hundred  sixty-eight  through  nineteen hundred seventy
 despite diligent efforts to obtain same from predecessors in  title  and
 further  provided that the new owner can provide financial data covering
 a minimum of six years under his or  her  continuous  and  uninterrupted
 operation  of  the building to meet the three year to three year compar-
 ative test periods herein provided; and (b) as  to  completed  building-
 wide  major  capital  improvements, for a finding that such improvements
 are deemed depreciable under the Internal Revenue Code and that the cost
 is to be amortized over a twelve-year period for a building  with  thir-
 ty-five  or  fewer housing accommodations, or a twelve and one-half-year
 period for a building with more than thirty-five housing accommodations,
 for any determination issued by the division of  housing  and  community
 renewal after the effective date of the [the] chapter of the laws of two
 thousand  nineteen that amended this paragraph and shall be removed from
 the legal regulated rent thirty years from the date the increase  became
 effective  inclusive  of  any  increases  granted by the applicable rent
 guidelines board. Temporary major capital improvement increases shall be
 collectible prospectively on the first day of the first month  beginning
 sixty  days  from  the date of mailing notice of approval to the tenant.
 Such notice shall disclose the total monthly increase in  rent  and  the
 first  month  in which the tenant would be required to pay the temporary
 increase. An approval for a temporary major capital improvement increase
 shall not include retroactive payments. The collection of  any  increase
 shall  not exceed two percent in any year from the effective date of the
 order granting the increase over the rent set forth in the  schedule  of
 gross  rents, with collectability of any dollar excess above said sum to
 be spread forward in similar increments and added to the rent as  estab-
 lished  or  set in future years.  Upon vacancy, the landlord may add any
 remaining balance of the temporary major capital improvement increase to
 the legal regulated rent. Notwithstanding any  other  provision  of  the
 law,  for  any  renewal  lease commencing on or after June 14, 2019, the
 collection of any rent increases due to any major  capital  improvements
 approved  on  or  after June 16, 2012 and before June 16, 2019 shall not
 exceed two percent in any year for any tenant in occupancy on  the  date
 the  major  capital improvement was approved or based upon cash purchase
 price exclusive of interest or service charges. Where an application for
 a temporary major capital improvement increase has been filed, a  tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing  in  which  to  answer  or  reply. The state division of housing and
 community renewal shall provide any responding tenant with  the  reasons
 for the division's approval or denial of such application. Notwithstand-
 ing  anything  to  the  contrary  contained herein, no hardship increase
 granted pursuant to this paragraph shall, when added to the annual gross
 rents, as determined by the commissioner, exceed the  sum  of,  (i)  the
 annual  operating expenses, (ii) an allowance for management services as
 determined by  the  commissioner,  (iii)  actual  annual  mortgage  debt
 service  (interest  and  amortization)  on its indebtedness to a lending
 institution, an insurance company, a retirement  fund  or  welfare  fund
 which is operated under the supervision of the banking or insurance laws
 of  the  state of New York or the United States, and (iv) eight and one-
 half percent of that portion of the fair market value  of  the  property
 which  exceeds  the unpaid principal amount of the mortgage indebtedness
 referred to in subparagraph (iii) of this paragraph. Fair  market  value
 A. 10281                            3
 
 for  the  purposes of this paragraph shall be six times the annual gross
 rent. The collection of any increase in  the  stabilized  rent  for  any
 apartment pursuant to this paragraph shall not exceed six percent in any
 year from the effective date of the order granting the increase over the
 rent  set  forth  in the schedule of gross rents, with collectability of
 any dollar excess above said sum to be spread forward in similar  incre-
 ments  and  added to the stabilized rent as established or set in future
 years. NO INCREASE FOR MAJOR CAPITAL IMPROVEMENTS SHALL  BE  GRANTED  TO
 ANY  LANDLORD  OR  PROPERTY  OWNER,  UNLESS AN APPLICATION INCLUDING ALL
 NECESSARY DOCUMENTATION IS SUBMITTED  WITHIN  ONE  HUNDRED  TWENTY  DAYS
 AFTER  THE COMPLETION OF THE NEW INSTALLATION OR IMPROVEMENT OR IMPROVE-
 MENTS;
   § 3. Subdivision b 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 paragraph 3-b to read as follows:
   (3-B) NO INCREASE FOR MAJOR CAPITAL IMPROVEMENTS SHALL BE  GRANTED  TO
 ANY  LANDLORD  OR  PROPERTY  OWNER,  UNLESS AN APPLICATION INCLUDING ALL
 NECESSARY DOCUMENTATION IS SUBMITTED  WITHIN  ONE  HUNDRED  TWENTY  DAYS
 AFTER  THE COMPLETION OF THE NEW INSTALLATION OR IMPROVEMENT OR IMPROVE-
 MENTS;
   § 4. Subparagraph 7 of the second undesignated paragraph of  paragraph
 (a)  of  subdivision  4 of section 4 of chapter 274 of the laws of 1946,
 constituting the emergency  housing  rent  control  law,  as  separately
 amended  by  section 25 of part Q of chapter 39 and section 14 of part K
 of chapter 36 of the laws of 2019, is amended to read as follows:
   (7) there has been since March first, nineteen hundred fifty, a  major
 capital  improvement  essential for the preservation, energy efficiency,
 functionality, or infrastructure of the entire building, improvement  of
 the  structure  including  heating,  windows,  plumbing and roofing, but
 shall not be for operational costs or unnecessary cosmetic improvements;
 which for any order of the commissioner issued after the effective  date
 of  the  chapter  of the laws of two thousand nineteen that amended this
 paragraph the cost of such improvement shall be amortized over a twelve-
 year period for buildings with thirty-five or fewer units  or  a  twelve
 and one-half year period for buildings with more than thirty-five units,
 and shall be removed from the legal regulated rent thirty years from the
 date the increase became effective inclusive of any increases granted by
 the  applicable  rent guidelines board. Temporary major capital improve-
 ment increases shall be collectible prospectively on the  first  day  of
 the  first month beginning sixty days from the date of mailing notice of
 approval to the tenant. Such notice shall  disclose  the  total  monthly
 increase  in  rent  and  the  first  month  in which the tenant would be
 required to pay the temporary increase.  An  approval  for  a  temporary
 major   capital  improvement  increase  shall  not  include  retroactive
 payments. The collection of any increase shall not exceed two percent in
 any year from the effective date of the order granting the increase over
 the rent set forth in the schedule of gross rents,  with  collectability
 of  any  dollar  excess  above  said sum to be spread forward in similar
 increments and added to the rent as established or set in future  years.
 Upon  vacancy,  the landlord may add any remaining balance of the tempo-
 rary major capital improvement increase to  the  legal  regulated  rent.
 Notwithstanding  any  other  provision of the law, for any renewal lease
 commencing on or after  June  14,  2019,  the  collection  of  any  rent
 increases  due  to  any  major capital improvements approved on or after
 June 16, 2012 and before June 16, 2019 shall not exceed two  percent  in
 any  year  for  any  tenant  in  occupancy on the date the major capital
 A. 10281                            4
 
 improvement was approved; provided, however, where an application for  a
 temporary  major  capital  improvement increase has been filed, a tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing  in  which  to  answer  or  reply. The state division of housing and
 community renewal shall provide any responding tenant with  the  reasons
 for  the  division's approval or denial of such application. NO INCREASE
 FOR MAJOR CAPITAL IMPROVEMENTS SHALL BE GRANTED TO ANY LANDLORD OR PROP-
 ERTY OWNER, UNLESS AN APPLICATION INCLUDING ALL NECESSARY  DOCUMENTATION
 IS  SUBMITTED WITHIN ONE HUNDRED TWENTY DAYS AFTER THE COMPLETION OF THE
 NEW INSTALLATION OR IMPROVEMENT OR IMPROVEMENTS; or
   § 5. This act shall take effect immediately; provided that:
   a. the amendments to section 26-405 of the  city  rent  and  rehabili-
 tation  law  made  by section one of this act shall remain in full force
 and effect only as long as the public emergency requiring the regulation
 and control of residential rents and evictions continues, as provided in
 subdivision 3 of section 1 of the local emergency housing  rent  control
 act; and
   b.  the amendments to section 26-511 of the administrative code of the
 city of New York made by section two of this act shall  not  affect  the
 expiration of such section and shall be deemed to expire therewith.