NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A654B
SPONSOR: Rosenthal TITLE OF BILL:
An act to amend the emergency tenant protection act of nineteen seven-
ty-four, and the administrative code of the city of New York, in
relation to increasing penalties for owners of rent-regulated property
who overcharge tenants
PURPOSE:
This bill imposes penalties on property owners who overcharge tenants.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends the opening paragraph of paragraph 1 of subdivision a
of section 12 of section 4 of chapter 576 of the laws of 1974, consti-
tuting the emergency tenant protection act of nineteen seventy-four, as
amended by chapter 116 of the law of 1997, to increase the penalty for a
rent overcharge of a rent-stabilized apartment from three times the
amount of the overcharge to five times the amount for a first offense,
and ten times the amount for any subsequent overcharges.
Section 2 amends the opening paragraph of subdivision a of section
26-516 of the administrative code of the city of New York, as amended by
chapter 116 of the laws of 1997, to increase the penalty for a rent
overcharge of a rent stabilized apartment from three times the amount of
the overcharge to five times the amount for a first offense, and ten
times the amount for any subsequent overcharges.
Section 3 sets forth the effective date.
JUSTIFICATION:
According to a recent investigation by ProPublica, close to 200,000
units of rent-stabilized apartments are , not properly registered with
the state's Division of Housing and Community Renewal (DHCR), putting
hundreds of thousands of tenants at risk of being overcharged on their
rent or illegally evicted.
The investigation noted that "data provided to ProPublica by DHCR, which
oversees rent-stabilized apartments shows that, as of 2014, New York
City had 839,797 rent-stabilized apartments registered with the state."
Over the same time period, the New York City Department of Housing Pres-
ervation and Development (HPD) published a survey estimating that there
should be 1,029,918 rent-stabilized units in the city - a gap that
dwarfs the survey's 34,000 unit margin of error. According to ProPubli-
ca, HPD's survey methodology attributes the gap between their estimate
and the number of registered rent-stabilized units in part on the
reduced penalties against landlords Who treat apartments that should be
rent-stabilized as market rate.
This bill would increase the penalty for overcharging a rent-stabilized
tenant to five times the amount of the overcharge, plus interest, for a
landlord's first violation, and ten times the amount of the overcharge,
plus interest, for any subsequent violations. As under current law, a
landlord could mitigate the civil penalty by demonstrating by a prepon-
derance of the evidence that the overcharge was neither willful nor
attributable to his or her negligence.
LEGISLATIVE HISTORY:
2023-24: A.106 - Advanced to Third Reading; S.2482 - Advanced to Third
Reading
2021-22: A.2332 - Referred to Housing
2019-20: A.738 - Referred to Housing
2017-18: A.523-8 - Reported to Rules
2015-16: A.9192 - Referred to Housing; 5.6454 - Referred to Housing
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
This bill shall take effect immediately, provided that the amendments to
the opening paragraph of paragraph 1 of subdivision a of section 12 of
the emergency tenant protection act of nineteen seventy-four shall
expire on the same date as such act expires and shall not affect the
expiration of such act as provided in section 17 of chapter 567 of the
laws of 1974; and b. the amendments to section 26-516 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.
STATE OF NEW YORK
________________________________________________________________________
654--B
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. ROSENTHAL, DE LOS SANTOS, SEAWRIGHT, RAGA,
CUNNINGHAM -- read once and referred to the Committee on Housing --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the emergency tenant protection act of nineteen seven-
ty-four, and the administrative code of the city of New York, in
relation to increasing penalties for owners of rent-regulated property
who overcharge tenants
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The opening paragraph and clause (ii) of subparagraph (b)
2 of paragraph 1 of subdivision a of section 12 of section 4 of chapter
3 576 of the laws of 1974, constituting the emergency tenant protection
4 act of nineteen seventy-four, as amended by section 1 of part F of chap-
5 ter 36 of the laws of 2019, are amended to read as follows:
6 Subject to the conditions and limitations of this paragraph, any owner
7 of housing accommodations in a city having a population of less than one
8 million or a town or village as to which an emergency has been declared
9 pursuant to section three, who, upon complaint of a tenant or of the
10 state division of housing and community renewal, is found by the state
11 division of housing and community renewal, after a reasonable opportu-
12 nity to be heard, to have collected an overcharge above the rent author-
13 ized for a housing accommodation subject to this act shall be liable to
14 the tenant for a penalty equal to [three] five times the amount of such
15 overcharge. If the owner establishes by a preponderance of the evidence
16 that the overcharge was neither willful nor attributable to [his] the
17 owner's negligence, the state division of housing and community renewal
18 shall establish the penalty as the amount of the overcharge plus inter-
19 est at the rate of interest payable on a judgment pursuant to section
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01958-06-5
A. 654--B 2
1 five thousand four of the civil practice law and rules. After a
2 complaint of rent overcharge has been filed and served on an owner, the
3 voluntary adjustment of the rent and/or the voluntary tender of a refund
4 of rent overcharges shall not be considered by the division of housing
5 and community renewal or a court of competent jurisdiction as evidence
6 that the overcharge was not willful. (i) Except as to complaints filed
7 pursuant to clause (ii) of this paragraph, the legal regulated rent for
8 purposes of determining an overcharge, shall be deemed to be the rent
9 indicated in the most recent reliable annual registration statement for
10 a rent stabilized tenant filed and served upon the tenant six or more
11 years prior to the most recent registration statement, (or, if more
12 recently filed, the initial registration statement) plus in each case
13 any subsequent lawful increases and adjustments. The division of housing
14 and community renewal or a court of competent jurisdiction, in investi-
15 gating complaints of overcharge and in determining legal regulated rent,
16 shall consider all available rent history which is reasonably necessary
17 to make such determinations. (ii) As to complaints filed within ninety
18 days of the initial registration of a housing accommodation, the legal
19 regulated rent for purposes of determining an overcharge shall be deemed
20 to be the rent charged on the date six years prior to the date of the
21 initial registration of the housing accommodation (or, if the housing
22 accommodation was subject to this act for less than six years, the
23 initial legal regulated rent) plus in each case, any lawful increases
24 and adjustments. Where the rent charged on the date six years prior to
25 the date of the initial registration of the accommodation cannot be
26 established, such rent shall be established by the division.
27 (ii) A penalty of [three] five times the overcharge shall be assessed
28 upon all overcharges willfully collected by the owner starting six years
29 before the complaint is filed.
30 § 2. The opening paragraph and paragraph 2 of subdivision a of section
31 26-516 of the administrative code of the city of New York, as amended by
32 section 4 of part F of chapter 36 of the laws of 2019, are amended to
33 read as follows:
34 Subject to the conditions and limitations of this subdivision, any
35 owner of housing accommodations who, upon complaint of a tenant, or of
36 the state division of housing and community renewal, is found by the
37 state division of housing and community renewal, after a reasonable
38 opportunity to be heard, to have collected an overcharge above the rent
39 authorized for a housing accommodation subject to this chapter shall be
40 liable to the tenant for a penalty equal to [three] five times the
41 amount of such overcharge. If the owner establishes by a preponderance
42 of the evidence that the overcharge was not willful, the state division
43 of housing and community renewal shall establish the penalty as the
44 amount of the overcharge plus interest. After a complaint of rent over-
45 charge has been filed and served on an owner, the voluntary adjustment
46 of the rent and/or the voluntary tender of a refund of rent overcharges
47 shall not be considered by the division of housing and community renewal
48 or a court of competent jurisdiction as evidence that the overcharge was
49 not willful. (i) Except as to complaints filed pursuant to clause (ii)
50 of this paragraph, the legal regulated rent for purposes of determining
51 an overcharge, shall be the rent indicated in the most recent reliable
52 annual registration statement filed and served upon the tenant six or
53 more years prior to the most recent registration statement, (or, if more
54 recently filed, the initial registration statement) plus in each case
55 any subsequent lawful increases and adjustments. The division of housing
56 and community renewal or a court of competent jurisdiction, in investi-
A. 654--B 3
1 gating complaints of overcharge and in determining legal regulated rent,
2 shall consider all available rent history which is reasonably necessary
3 to make such determinations. (ii) As to complaints filed within ninety
4 days of the initial registration of a housing accommodation, the legal
5 regulated rent shall be deemed to be the rent charged on the date six
6 years prior to the date of the initial registration of the housing
7 accommodation (or, if the housing accommodation was subject to this
8 chapter for less than six years, the initial legal regulated rent) plus
9 in each case, any lawful increases and adjustments. Where the rent
10 charged on the date six years prior to the date of the initial registra-
11 tion of the accommodation cannot be established, such rent shall be
12 established by the division.
13 (2) A complaint under this subdivision may be filed with the state
14 division of housing and community renewal or in a court of competent
15 jurisdiction at any time, however any recovery of overcharge penalties
16 shall be limited to the six years preceding the complaint. A penalty of
17 [three] five times the overcharge shall be assessed upon all overcharges
18 willfully collected by the owner starting six years before the complaint
19 is filed.
20 § 3. This act shall take effect immediately; provided, however, that
21 the amendments to section 26-516 of chapter 4 of title 26 of the admin-
22 istrative code of the city of New York made by section two of this act
23 shall expire on the same date as such law expires and shall not affect
24 the expiration of such law as provided under section 26-520 of such law.
