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A00350 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A350C
 
SPONSOR: Braunstein
  TITLE OF BILL: An act to amend the general obligations law, the real property law, and the real property actions and proceedings law, in relation to excluding tenant-shareholders in cooperative housing corporations from certain housing provisions   PURPOSE OR GENERAL IDEA OF BILL: Excludes tenant-shareholders in cooperative housing corporations from certain housing provisions   JUSTIFICATION: The Housing Stability and Tenant Protection Act of 2019 was a landmark bill in protecting tenant rights. However, several provisions of the bill were unclear regarding its application to shareholder-tenants who utilize their cooperative as their residence. This bill adds clarifying language and exempts these homeowner shareholder-tenants from those provisions that would have a negative impact to their homeownership.   PRIOR LEGISLATIVE HISTORY: 2019-2020 -A.8718/S.6770 - Referred to Judiciary.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect immediately.
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A00350 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         350--C
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 6, 2021
                                       ___________
 
        Introduced  by M. of A. BRAUNSTEIN, D. ROSENTHAL, WEPRIN, STIRPE, QUART,
          SEAWRIGHT, CARROLL, PHEFFER AMATO, COLTON, HYNDMAN, DINOWITZ, GRIFFIN,
          THIELE, COOK, PRETLOW, BENEDETTO,  LAVINE,  RICHARDSON,  MONTESANO  --
          Multi-Sponsored  by -- M. of A. McDONOUGH -- read once and referred to
          the Committee on Judiciary  --  committee  discharged,  bill  amended,
          ordered  reprinted  as  amended  and  recommitted to said committee --
          reported and referred to the Committee on  Rules  --  Rules  Committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to the Committee on Rules -- Rules Committee discharged, bill amended,
          ordered reprinted as amended and recommitted to the Committee on Rules
 
        AN  ACT to amend the general obligations law, the real property law, and
          the real property actions and proceedings law, in relation to  exclud-
          ing  tenant-shareholders  in  cooperative  housing  corporations  from
          certain housing provisions
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Paragraph  (a) of subdivision 1-a of section 7-108 of the
     2  general obligations law, as added by section 25 of part M of chapter  36
     3  of the laws of 2019, is amended and a new subdivision 4 is added to read
     4  as follows:
     5    (a)  No deposit or advance shall exceed the amount of one month's rent
     6  under such contract, unless the deposit or advance is for an owner-occu-
     7  pied cooperative apartment as provided for in subdivision four  of  this
     8  section.
     9    4.  A  dwelling  unit  shall  qualify as an owner-occupied cooperative
    10  apartment for the purpose of paragraph (a) of subdivision one-a of  this
    11  section if it meets all of the following conditions:
    12    (a) the tenant is the dwelling unit owner, purchaser or shareholder of
    13  such a cooperative housing corporation;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03421-15-1

        A. 350--C                           2
 
     1    (b) such tenant has or will have after purchase exclusive occupancy of
     2  such  dwelling unit individually and with the permitted occupants pursu-
     3  ant to a proprietary lease or occupancy agreement  and  established  and
     4  delimited rights under such lease or agreement; and
     5    (c)  such  dwelling  unit  is not subject to the provisions of article
     6  two, article four, article five, or article eleven of the private  hous-
     7  ing finance law.
     8    § 2. Subdivision 1 of section 226-c of the real property law, as added
     9  by  section 3 of part M of chapter 36 of the laws of 2019, is amended to
    10  read as follows:
    11    1. (a) Whenever a landlord intends to offer to renew the tenancy of an
    12  occupant in a residential dwelling unit with a rent increase equal to or
    13  greater than five percent above the current rent, or the  landlord  does
    14  not  intend  to  renew  the  tenancy, the landlord shall provide written
    15  notice as required in subdivision two of this section. If  the  landlord
    16  fails  to  provide  timely  notice,  the occupant's lawful tenancy shall
    17  continue under the existing terms of the tenancy from the date on  which
    18  the  landlord  gave  actual  written  notice until the notice period has
    19  expired, notwithstanding any provision  of  a  lease  or  other  tenancy
    20  agreement to the contrary.
    21    (b)  Notwithstanding  paragraph  (a) of this subdivision, notice shall
    22  not be required under this section to be provided by a cooperative hous-
    23  ing corporation, other than a cooperative housing corporation subject to
    24  the provisions of article two, article four,  article  five  or  article
    25  eleven of the private housing finance law, to a tenant who is a dwelling
    26  unit owner or shareholder of such corporation. Nothing in this paragraph
    27  shall  relieve  such  cooperative  housing  corporation of any otherwise
    28  applicable obligation to provide notice to such tenant pursuant  to  any
    29  other law or any agreement between the parties.
    30    §  3.  Subdivisions 1 and 2 of section 238-a of the real property law,
    31  as added by section 10 of part M of chapter 36 of the laws of 2019,  are
    32  amended to read as follows:
    33    1. (a) Except in instances where statutes or regulations provide for a
    34  payment,  fee  or charge, no landlord, lessor, sub-lessor or grantor may
    35  demand any payment, fee, or charge for the processing, review or accept-
    36  ance of an application, or demand  any  other  payment,  fee  or  charge
    37  before  or at the beginning of the tenancy, except background checks and
    38  credit checks as provided by paragraph (b) of this subdivision, provided
    39  that this subdivision shall  not  apply  to  entrance  fees  charged  by
    40  continuing  care  retirement  communities  licensed  pursuant to article
    41  forty-six or forty-six-A of  the  public  health  law,  assisted  living
    42  providers  licensed pursuant to article forty-six-B of the public health
    43  law, adult care facilities licensed pursuant to  article  seven  of  the
    44  social  services law, senior residential communities that have submitted
    45  an offering plan to the attorney general, or not-for-profit  independent
    46  retirement  communities  that  offer personal emergency response, house-
    47  keeping, transportation and meals to their residents.   Nothing in  this
    48  paragraph shall prohibit a cooperative housing corporation, other than a
    49  cooperative  housing  corporation  subject  to the provisions of article
    50  two, article four, article five or article eleven of the private housing
    51  finance law, from demanding from a prospective tenant any  payment,  fee
    52  or  charge  which  is  necessary  to  compensate a managing agent and/or
    53  transfer agent for the processing, review or acceptance of such prospec-
    54  tive tenant's application where such prospective tenant would  become  a
    55  dwelling  unit  owner  or shareholder of such cooperative housing corpo-
    56  ration.

        A. 350--C                           3
 
     1    (b) A landlord, lessor, sub-lessor or grantor may charge a fee or fees
     2  to reimburse costs associated with conducting  a  background  check  and
     3  credit  check, provided the cumulative fee or fees for such checks is no
     4  more than the actual cost of the background check and  credit  check  or
     5  twenty  dollars, whichever is less, and the landlord, lessor, sub-lessor
     6  or grantor shall waive the fee or fees if the potential tenant  provides
     7  a  copy  of a background check or credit check conducted within the past
     8  thirty days. The landlord, lessor, sub-lessor or grantor may not collect
     9  the fee or fees unless  the  landlord,  lessor,  sub-lessor  or  grantor
    10  provides  the  potential  tenant  with a copy of the background check or
    11  credit check and the receipt or invoice from the entity  conducting  the
    12  background  check  or  credit check.   Notwithstanding the provisions of
    13  this paragraph, a cooperative housing corporation, other than a  cooper-
    14  ative  housing  corporation  subject  to  the provisions of article two,
    15  article four, article five or article  eleven  of  the  private  housing
    16  finance  law,  shall  be  permitted to charge a fee or fees to reimburse
    17  costs associated with conducting a background check and credit check  in
    18  excess  of  twenty  dollars,  where  the potential tenant would become a
    19  dwelling unit owner or shareholder of such  cooperative  housing  corpo-
    20  ration,  provided  the cumulative fee or fees for such checks is no more
    21  than the actual cost of such background check and/or credit check.
    22    2. No landlord, lessor, sub-lessor or grantor may demand any  payment,
    23  fee,  or  charge for the late payment of rent unless the payment of rent
    24  has not been made within five days of the date  it  was  due,  and  such
    25  payment,  fee,  or charge shall not exceed fifty dollars or five percent
    26  of the monthly rent, whichever is less; provided a  cooperative  housing
    27  corporation, other than a cooperative housing corporation subject to the
    28  provisions  of article two, article four, article five or article eleven
    29  of the private housing finance law,  shall  be  permitted  to  charge  a
    30  tenant  that is a dwelling unit owner or shareholder of such cooperative
    31  housing corporation a fee of up to eight percent of the monthly  mainte-
    32  nance  fee  for  the  late payment of the monthly maintenance fee if the
    33  proprietary lease or occupancy agreement provides for such fee.
    34    § 4. Section 702 of the real property actions and proceedings law,  as
    35  added  by  section  11  of  part M of chapter 36 of the laws of 2019, is
    36  amended to read as follows:
    37    § 702. Rent in a residential dwelling. 1. In a proceeding relating  to
    38  a  residential  dwelling or housing accommodation, the term "rent" shall
    39  mean the monthly or weekly amount charged in consideration for  the  use
    40  and occupation of a dwelling pursuant to a written or oral rental agree-
    41  ment.  No  fees, charges or penalties other than rent may be sought in a
    42  summary  proceeding  pursuant  to  this  article,  notwithstanding   any
    43  language to the contrary in any lease or rental agreement.
    44    2.  This  section shall not apply to a summary proceeding in which the
    45  parties are a cooperative housing corporation, other than a  cooperative
    46  housing  corporation  subject  to the provisions of article two, article
    47  four, article five or article eleven of the private housing finance law,
    48  and a tenant who is a dwelling unit owner or shareholder of such  corpo-
    49  ration,  provided  that  the  proprietary  lease  or occupancy agreement
    50  between the cooperative housing corporation and the tenant provides  for
    51  fees,  charges, penalties or assessments other than rent to be recovera-
    52  ble in such a proceeding.
    53    § 5. Subdivision (d) of section 235-e of the  real  property  law,  as
    54  added  by  section  9  of  part  M of chapter 36 of the laws of 2019, is
    55  amended to read as follows:

        A. 350--C                           4
 
     1    (d) If a lessor, or an agent of a lessor authorized to  receive  rent,
     2  fails to receive payment for rent within five days of the date specified
     3  in  a  lease  agreement,  such lessor or agent shall send the lessee, by
     4  certified mail, a written notice stating the  failure  to  receive  such
     5  rent  payment.  The  failure  of  a  lessor,  or any agent of the lessor
     6  authorized to receive rent, to provide a lessee with a written notice of
     7  the non-payment of rent may be used as an affirmative  defense  by  such
     8  lessee  in  an  eviction  proceeding  based  on the non-payment of rent.
     9  Notwithstanding the provisions of this subdivision, a lessor which is  a
    10  cooperative housing corporation, other than a cooperative housing corpo-
    11  ration  subject  to the provisions of article two, article four, article
    12  five or article eleven of the private housing finance law,  may  provide
    13  for  a method of sending notice by mail other than by certified mail, as
    14  long as such method of sending notice is provided for in the proprietary
    15  lease or occupancy agreement, and the lessee is a dwelling unit owner or
    16  shareholder of such cooperative housing corporation.
    17    § 6. The opening paragraph of section 234 of the real property law  is
    18  designated  subdivision  1  and  a new subdivision 2 is added to read as
    19  follows:
    20    2. Notwithstanding the provisions of subdivision one of this  section,
    21  where  a tenant is a dwelling unit owner or shareholder of a cooperative
    22  housing  corporation,  other  than  a  cooperative  housing  corporation
    23  subject  to the provisions of article two, article four, article five or
    24  article eleven of the private housing finance law, attorney's  fees  may
    25  be  awarded to either party in the event of default judgment if recovery
    26  of attorney's fees is provided for in the proprietary lease or occupancy
    27  agreement.
    28    § 7. This act shall take effect immediately and shall apply to actions
    29  and proceedings commenced on or after such effective date.
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