S T A T E   O F   N E W   Y O R K
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                                  952--A
     Cal. No. 344
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 8, 2025
                                ___________
 
 Introduced  by Sen. KAVANAGH -- read twice and ordered printed, and when
   printed to be committed to the  Committee  on  Judiciary  --  reported
   favorably  from  said  committee,  ordered to first and second report,
   ordered to a third reading, amended and ordered  reprinted,  retaining
   its place in the order of third reading
 
 AN  ACT to amend the general obligations law, in relation to the liabil-
   ity of a grantee or assignee for deposits made by tenants upon convey-
   ance of rent stabilized dwelling units
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 7-107 of the general obligations law, as added by
 chapter 917 of the laws of 1984, is amended to read as follows:
   § 7-107. Liability of a grantee  or  assignee  for  deposits  made  by
 tenants  upon  conveyance  of  rent  stabilized  dwelling units. 1. This
 section shall apply only to dwelling units subject to the New York  city
 rent  stabilization  law of nineteen hundred sixty-nine or the emergency
 tenant protection act of nineteen seventy-four.
   2. (a) Any grantee or assignee of any dwelling  unit  referred  to  in
 subdivision  one of this section shall be liable to a tenant for any sum
 of money or any other thing of value deposited as security for the  full
 performance  by  such  tenant of the terms of [his] SUCH TENANT'S lease,
 plus any accrued interest, if [his] SUCH TENANT or  its  predecessor  in
 interest  was liable for such funds. Such liability shall attach whether
 or not the successor in interest has, upon the conveyance of such dwell-
 ing unit, received the sum as deposited.
   (b) The liability of a receiver for payment of  any  security  deposit
 plus  accrued  interest pursuant to this subdivision shall be limited to
 the amount of such deposit actually turned over  to  [him  or  it]  SUCH
 RECEIVER  pursuant to subdivision one of section 7-105 of this [chapter]
 TITLE and to the operating income in excess of expenses generated during
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD02363-06-5
 S. 952--A                           2
 
 [his or its] SUCH RECEIVER'S  period  of  receivership.  NO  DEPOSIT  OR
 ADVANCE SHALL EXCEED THE AMOUNT OF ONE MONTH'S RENT, PLUS ACCRUED INTER-
 EST,  UNDER  ANY  CONTRACT  FOR  THE LEASE OR TENANCY OF A DWELLING UNIT
 SUBJECT TO THIS SECTION.
   3.  Any  agreement by a lessee or tenant of a dwelling unit waiving or
 modifying [his] SUCH LESSEE'S OR TENANT'S rights as set  forth  in  this
 section  shall  be  void.   THE ENTIRE AMOUNT OF THE DEPOSIT OR ADVANCE,
 PLUS ACCRUED INTEREST, SHALL  BE  REFUNDABLE  TO  THE  TENANT  UPON  THE
 TENANT'S VACATING OF THE PREMISES EXCEPT FOR AN AMOUNT LAWFULLY RETAINED
 FOR THE REASONABLE AND ITEMIZED COSTS DUE TO NON-PAYMENT OF RENT, DAMAGE
 CAUSED BY THE TENANT BEYOND NORMAL WEAR AND TEAR, NON-PAYMENT OF UTILITY
 CHARGES PAYABLE DIRECTLY TO THE LANDLORD UNDER THE TERMS OF THE LEASE OR
 TENANCY, AND MOVING AND STORAGE OF THE TENANT'S BELONGINGS. THE LANDLORD
 MAY  NOT RETAIN ANY AMOUNT OF THE DEPOSIT FOR COSTS RELATING TO ORDINARY
 WEAR AND TEAR OF OCCUPANCY OR DAMAGE CAUSED BY A PRIOR TENANT.
   4. AFTER INITIAL LEASE SIGNING BUT BEFORE THE TENANT BEGINS OCCUPANCY,
 THE LANDLORD SHALL OFFER THE TENANT THE OPPORTUNITY TO INSPECT THE PREM-
 ISES WITH THE LANDLORD OR THE LANDLORD'S AGENT TO DETERMINE  THE  CONDI-
 TION  OF  THE  PROPERTY.  IF  THE  TENANT  REQUESTS SUCH INSPECTION, THE
 PARTIES SHALL EXECUTE A WRITTEN AGREEMENT BEFORE THE TENANT BEGINS OCCU-
 PANCY OF THE UNIT ATTESTING TO THE CONDITION OF THE PROPERTY AND SPECIF-
 ICALLY NOTING ANY EXISTING DEFECTS OR DAMAGES. UPON THE TENANT'S  VACAT-
 ING  OF  THE  PREMISES,  THE  LANDLORD  MAY NOT RETAIN ANY AMOUNT OF THE
 DEPOSIT OR ADVANCE DUE TO ANY CONDITION, DEFECT, OR DAMAGE NOTED IN SUCH
 AGREEMENT. THE AGREEMENT SHALL BE ADMISSIBLE AS EVIDENCE OF  THE  CONDI-
 TION  OF  THE PREMISES AT THE BEGINNING OF OCCUPANCY ONLY IN PROCEEDINGS
 RELATED TO THE RETURN OR AMOUNT OF THE SECURITY DEPOSIT.
   5. WITHIN A REASONABLE  TIME  AFTER  NOTIFICATION  OF  EITHER  PARTY'S
 INTENTION  TO  TERMINATE  THE  TENANCY, UNLESS THE TENANT TERMINATES THE
 TENANCY WITH LESS THAN TWO WEEKS' NOTICE, THE LANDLORD SHALL NOTIFY  THE
 TENANT  IN WRITING OF THE TENANT'S RIGHT TO REQUEST AN INSPECTION BEFORE
 VACATING THE PREMISES AND OF THE TENANT'S RIGHT TO  BE  PRESENT  AT  THE
 INSPECTION.  IF  THE  TENANT REQUESTS SUCH AN INSPECTION, THE INSPECTION
 SHALL BE MADE NO EARLIER THAN TWO WEEKS  AND  NO  LATER  THAN  ONE  WEEK
 BEFORE  THE  END  OF  THE  TENANCY.  THE LANDLORD SHALL PROVIDE AT LEAST
 FORTY-EIGHT HOURS WRITTEN NOTICE OF THE DATE AND TIME OF THE INSPECTION.
 AFTER THE INSPECTION, THE LANDLORD SHALL  PROVIDE  THE  TENANT  WITH  AN
 ITEMIZED  STATEMENT  SPECIFYING REPAIRS OR CLEANING THAT ARE PROPOSED TO
 BE THE BASIS OF ANY DEDUCTIONS FROM THE  TENANT'S  DEPOSIT.  THE  TENANT
 SHALL  HAVE THE OPPORTUNITY TO CURE ANY SUCH CONDITION BEFORE THE END OF
 THE TENANCY. ANY STATEMENT PRODUCED PURSUANT TO THIS  SUBDIVISION  SHALL
 ONLY BE ADMISSIBLE IN PROCEEDINGS RELATED TO THE RETURN OR AMOUNT OF THE
 SECURITY DEPOSIT.
   6. WITHIN FOURTEEN DAYS AFTER THE TENANT HAS VACATED THE PREMISES, THE
 LANDLORD  SHALL PROVIDE THE TENANT WITH AN ITEMIZED STATEMENT INDICATING
 THE BASIS FOR THE AMOUNT OF THE DEPOSIT  RETAINED,  IF  ANY,  AND  SHALL
 RETURN  ANY REMAINING PORTION OF THE DEPOSIT TO THE TENANT, PLUS ACCRUED
 INTEREST. IF A LANDLORD FAILS TO PROVIDE THE TENANT WITH  THE  STATEMENT
 AND  DEPOSIT  WITHIN FOURTEEN DAYS, THE LANDLORD SHALL FORFEIT ANY RIGHT
 TO RETAIN ANY PORTION OF THE DEPOSIT.
   7. IN ANY ACTION OR PROCEEDING DISPUTING THE AMOUNT OF ANY PORTION  OF
 THE  DEPOSIT RETAINED, THE LANDLORD SHALL BEAR THE BURDEN OF PROOF AS TO
 THE REASONABLENESS OF THE AMOUNT RETAINED.
   8. ANY PERSON WHO VIOLATES THE PROVISIONS OF  THIS  SECTION  SHALL  BE
 LIABLE  FOR  ACTUAL  DAMAGES,  PROVIDED A PERSON FOUND TO HAVE WILLFULLY
 S. 952--A                           3
 
 VIOLATED THIS SECTION SHALL BE LIABLE FOR  PUNITIVE  DAMAGES  OF  UP  TO
 TWICE THE AMOUNT OF THE DEPOSIT OR ADVANCE.
   9.  (A)  IN CIRCUMSTANCES WHERE ANY SUM OF MONEY OR ANY OTHER THING OF
 VALUE DEPOSITED AS SECURITY FOR THE FULL PERFORMANCE BY A TENANT OF  THE
 TERMS  OF  THEIR  LEASE  IS  NOT  TURNED OVER TO A SUCCESSOR IN INTEREST
 PURSUANT TO SECTION 7-105 OF THIS TITLE, THE GRANTEE OR ASSIGNEE OF  THE
 LEASED  PREMISES SHALL ALSO BE LIABLE TO SUCH TENANT, UPON CONVEYANCE OF
 SUCH LEASED PREMISES, FOR THE REPAYMENT OF ANY  SUCH  SECURITY  DEPOSIT,
 PLUS  ACCRUED  INTEREST, AS TO WHICH SUCH GRANTEE OR ASSIGNEE HAS ACTUAL
 KNOWLEDGE.
   (B) FOR PURPOSES OF THIS SECTION, A GRANTEE OR ASSIGNEE OF THE  LEASED
 PREMISES SHALL BE DEEMED TO HAVE ACTUAL KNOWLEDGE OF ANY SECURITY DEPOS-
 IT  WHICH IS (I) DEPOSITED AT ANY TIME DURING THE SIX MONTHS IMMEDIATELY
 PRIOR TO CLOSING OR OTHER TRANSFER OF TITLE IN ANY BANKING  ORGANIZATION
 PURSUANT  TO  SUBDIVISION  TWO-A OF SECTION 7-103 OF THIS TITLE, OR (II)
 ACKNOWLEDGED IN ANY LEASE IN EFFECT AT THE  TIME  OF  CLOSING  OR  OTHER
 TRANSFER  OF  TITLE, OR (III) SUPPORTED BY DOCUMENTARY EVIDENCE PROVIDED
 BY THE TENANT OR LESSEE AS SET FORTH IN PARAGRAPH (C) OF  THIS  SUBDIVI-
 SION.
   (C)  WITH  RESPECT TO ANY LEASED PREMISES FOR WHICH THERE IS NO RECORD
 OF SECURITY DEPOSIT PURSUANT TO SUBPARAGRAPH (I) OR  (II)  OF  PARAGRAPH
 (B)  OF THIS SUBDIVISION, THE GRANTEE OR ASSIGNEE OF THE LEASED PREMISES
 SHALL BE OBLIGATED TO NOTIFY THE TENANT THEREOF IN WRITING NO LATER THAN
 THIRTY DAYS FOLLOWING THE CLOSING OR OTHER TRANSFER OF TITLE TO THE FACT
 THAT THERE IS NO RECORD OF A SECURITY DEPOSIT FOR SAID  LEASED  PREMISES
 AND  THAT  UNLESS  THE  TENANT WITHIN THIRTY DAYS AFTER RECEIVING NOTICE
 PROVIDES THEM OR IT WITH DOCUMENTARY EVIDENCE  OF  DEPOSIT,  THE  TENANT
 SHALL  HAVE  NO  FURTHER  RECOURSE  AGAINST THEM OR IT FOR SAID SECURITY
 DEPOSIT. FOR PURPOSES OF THIS SUBDIVISION, "DOCUMENTARY EVIDENCE"  SHALL
 BE LIMITED TO ANY CANCELLED CHECK DRAWN TO THE ORDER OF, A RECEIPT FROM,
 OR  A LEASE SIGNED BY ANY PREDECESSOR IN INTEREST, IF SUCH PREDECESSOR'S
 INTEREST IN THE LEASED PREMISES EXISTED ON OR AFTER THE  EFFECTIVE  DATE
 OF THIS PARAGRAPH. EXCEPT AS OTHERWISE PROVIDED BY SUBPARAGRAPHS (I) AND
 (II)  OF  PARAGRAPH  (B) OF THIS SUBDIVISION, THE GRANTEE OR ASSIGNEE OF
 THE LEASED PREMISES SHALL NOT BE CHARGED WITH ACTUAL  KNOWLEDGE  OF  THE
 SECURITY  DEPOSIT WHERE THE TENANT FAILS WITHIN THE THIRTY-DAY PERIOD TO
 PROVIDE SUCH DOCUMENTARY EVIDENCE. WHERE THE GRANTEE OR ASSIGNEE OF  THE
 LEASED  PREMISES  FAILS  TO NOTIFY THE TENANT AS SPECIFIED IN THIS PARA-
 GRAPH WITHIN THIRTY DAYS FOLLOWING THE  CLOSING  OR  OTHER  TRANSFER  OF
 TITLE,  THE  TENANT SHALL BE ENTITLED TO PRODUCE DOCUMENTARY EVIDENCE AT
 ANY TIME.
   (D) THE GRANTEE OR ASSIGNEE OF THE  LEASED  PREMISES  SHALL  HAVE  THE
 RIGHT TO DEMAND THAT THE GRANTOR OR ASSIGNOR THEREOF ESTABLISH AN ESCROW
 ACCOUNT  EQUAL  TO  ONE  MONTH'S  RENT FOR ANY LEASED PREMISES FOR WHICH
 THERE IS NO RECORD OF A SECURITY DEPOSIT PURSUANT TO  PARAGRAPH  (B)  OF
 THIS  SUBDIVISION  TO  BE  USED  FOR THE PURPOSE OF HOLDING HARMLESS THE
 GRANTEE OR ASSIGNEE IN ANY CASE WHERE, AT A DATE SUBSEQUENT TO THE CLOS-
 ING OR OTHER TRANSFER OF TITLE, THE  TENANT  GIVES  NOTICE  PURSUANT  TO
 PARAGRAPH (C) OF THIS SUBDIVISION.
   (E)  THE  LIABILITY  OF A RECEIVER FOR PAYMENT OF ANY SECURITY DEPOSIT
 PLUS ACCRUED INTEREST PURSUANT TO THIS SUBDIVISION SHALL BE  LIMITED  TO
 THE  AMOUNT  OF SUCH DEPOSIT ACTUALLY TURNED OVER TO THEM OR IT PURSUANT
 TO SUBDIVISION ONE OF SECTION 7-105 OF THIS TITLE AND TO  THE  OPERATING
 INCOME  IN  EXCESS  OF  EXPENSES GENERATED DURING THEIR OR ITS PERIOD OF
 RECEIVERSHIP.
 S. 952--A                           4
 
   10. ANY AGREEMENT BY A LESSEE OR TENANT OF A DWELLING WAIVING OR MODI-
 FYING THEIR RIGHTS AS SET FORTH IN  THIS  SECTION  SHALL  BE  ABSOLUTELY
 VOID.
   §  2.  This  act shall take effect on the thirtieth day after it shall
 have become a law and shall apply to any lease or  rental  agreement  or
 renewal  of  a  lease  or rental agreement entered into on or after such
 date.