S T A T E O F N E W Y O R K
________________________________________________________________________
5387
2021-2022 Regular Sessions
I N S E N A T E
March 3, 2021
___________
Introduced by Sens. PARKER, SEPULVEDA -- 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 and the
emergency tenant protection act of nineteen seventy-four, in relation
to inspection of major capital improvements for which rent increases
are requested and in relation to extending the provisions of the rent
stabilization law
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
26-405 of the administrative code of the city of New York, as amended by
section 27 of part Q chapter 39 of the laws of 2019, is amended to read
as follows:
(g) There has been since July first, nineteen hundred seventy, 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. The
temporary increase based upon a major capital improvement under this
subparagraph for any order of the commissioner issued after [the effec-
tive date of the chapter of the laws of two thousand nineteen that
amended this subparagraph] JUNE 14, 2014 shall be in an amount suffi-
cient to amortize the cost of the improvements pursuant to this subpara-
graph [(g)] 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. Tempo-
rary major capital improvement increases shall be collectible prospec-
tively on the first day of the first month beginning sixty days from the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07022-01-1
S. 5387 2
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 temporary major capital improvement increase to the legal
regulated rent. NO LANDLORD SHALL DENY ACCESS TO A PROFESSIONAL ENGI-
NEER LICENSED TO PRACTICE IN THE STATE OF NEW YORK OR A REGISTERED
ARCHITECT LICENSED TO PRACTICE IN THE STATE OF NEW YORK HIRED BY ANY
TENANT, TENANTS OR TENANT ASSOCIATION REPRESENTING TENANTS OF A MULTIPLE
DWELLING OF SIX UNITS OR MORE FOR THE PURPOSE OF CONDUCTING AN
INSPECTION OF A MAJOR CAPITAL IMPROVEMENT FOR WHICH AN APPLICATION FOR
ADJUSTMENT OF MAXIMUM RENT HAS BEEN FILED. SUCH INSPECTION SHALL BE
CONDUCTED AFTER NOTICE TO THE LANDLORD AND DURING NORMAL BUSINESS HOURS.
SUCH TENANT MAY FILE THE REPORT OF THE INSPECTION WITH THE CITY RENT
AGENCY FOR CONSIDERATION IN THE DETERMINATION OF SUCH APPLICATION.
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
§ 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
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
S. 5387 3
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] JUNE 14, 2019 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 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. NO
LANDLORD SHALL DENY ACCESS TO A PROFESSIONAL ENGINEER LICENSED TO PRAC-
TICE IN THE STATE OF NEW YORK OR A REGISTERED ARCHITECT LICENSED TO
PRACTICE IN THE STATE OF NEW YORK HIRED BY ANY TENANT, TENANTS OR TENANT
ASSOCIATION REPRESENTING TENANTS OF A MULTIPLE DWELLING OF SIX UNITS OR
MORE FOR THE PURPOSE OF CONDUCTING AN INSPECTION OF A MAJOR CAPITAL
IMPROVEMENT FOR WHICH AN APPLICATION FOR ADJUSTMENT OF MAXIMUM RENT HAS
BEEN FILED. SUCH INSPECTION SHALL BE CONDUCTED AFTER NOTICE TO THE LAND-
LORD AND DURING NORMAL BUSINESS HOURS. SUCH TENANT MAY FILE THE REPORT
OF THE INSPECTION WITH THE CITY RENT AGENCY FOR CONSIDERATION IN THE
DETERMINATION OF SUCH APPLICATION. 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 improve-
ments 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 appli-
cation 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 proceeding 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 applica-
tion. Notwithstanding 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 manage-
ment 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 for the purposes of this paragraph shall be six times the
S. 5387 4
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 increments and added to the stabilized rent as established or
set in future years;
§ 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
576 of the laws of 1974, constituting the emergency tenant protection
act of nineteen seventy-four, as amended by section 26 of part Q of
chapter 39 of the laws of 2019, is amended to read as follows:
(3) there has been since January first, nineteen hundred seventy-four
a major capital improvement essential for the preservation, energy effi-
ciency, functionality, or infrastructure of the entire building,
improvement of the structure including heating, windows, plumbing and
roofing, but shall not be for operation costs or unnecessary cosmetic
improvements. An adjustment under this paragraph shall be in an amount
sufficient to amortize the cost of the improvements pursuant to this
paragraph over a twelve-year period for a building with thirty-five or
fewer housing accommodations, or a twelve and one-half period for a
building with more than thirty-five housing accommodations 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, for any determination issued by the
division of housing and community renewal after [the effective date of
the chapter of the laws of two thousand nineteen that amended this para-
graph] JUNE 14, 2019. Temporary major capital improvement increases
shall be collectable 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 improve-
ment 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 temporary major capital improvement
increase to the legal regulated rent. NO LANDLORD SHALL DENY ACCESS TO
A PROFESSIONAL ENGINEER LICENSED TO PRACTICE IN THE STATE OF NEW YORK OR
A REGISTERED ARCHITECT LICENSED TO PRACTICE IN THE STATE OF NEW YORK
HIRED BY ANY TENANT, TENANTS OR TENANT ASSOCIATION REPRESENTING TENANTS
OF A MULTIPLE DWELLING OF SIX UNITS OR MORE FOR THE PURPOSE OF CONDUCT-
ING AN INSPECTION OF A MAJOR CAPITAL IMPROVEMENT FOR WHICH AN APPLICA-
TION FOR ADJUSTMENT OF MAXIMUM RENT HAS BEEN FILED. SUCH INSPECTION
SHALL BE CONDUCTED AFTER NOTICE TO THE LANDLORD AND DURING NORMAL BUSI-
NESS HOURS. SUCH TENANT MAY FILE THE REPORT OF THE INSPECTION WITH THE
CITY RENT AGENCY FOR CONSIDERATION IN THE DETERMINATION OF SUCH APPLICA-
TION. Notwithstanding any other provision of the law, the collection of
any rent increases for any renewal lease commencing on or after June 14,
2019, 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 improve-
ment was approved, or
S. 5387 5
§ 4. This act shall take effect on the one hundred twentieth day after
it shall have become a law, provided that the amendments to section
26-405 of the city rent and rehabilitation law made by section one of
this act shall remain in full force and effect only so 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 provided further
that the amendments to section 26-511 of the rent stabilization law of
nineteen hundred sixty-nine 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. Effective
immediately, the addition, amendment and/or repeal of any rule and regu-
lation necessary for the implementation of this act on its effective
date are authorized to be made on or before such date.
