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A05040 Summary:

BILL NOA05040
 
SAME ASSAME AS S02014
 
SPONSORDinowitz
 
COSPNSRGottfried, Rosenthal L, Pichardo, Cook, Benedetto, Perry, Barron, Reyes, De La Rosa, Rodriguez
 
MLTSPNSRGlick
 
Add §26-416, amd §26-512, NYC Ad Cd; amd §6, Emerg Ten Prot Act of 1974; amd §4, Emerg Hous Rent Cont L; add §234-a, RP L
 
Prohibits owners, lessors or agents thereof from assessing a lessee any fee for legal services in connection with any operation or rental of a residential unit unless the owner, lessor or agent has the legal authority to do so.
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A05040 Actions:

BILL NOA05040
 
02/10/2021referred to housing
02/23/2021reported referred to codes
03/09/2021reported
03/11/2021advanced to third reading cal.174
06/02/2021substituted by s2014
 S02014 AMEND= JACKSON
 01/16/2021REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
 05/04/20211ST REPORT CAL.917
 05/05/20212ND REPORT CAL.
 05/10/2021ADVANCED TO THIRD READING
 05/19/2021PASSED SENATE
 05/19/2021DELIVERED TO ASSEMBLY
 05/19/2021referred to codes
 06/02/2021substituted for a5040
 06/02/2021ordered to third reading cal.174
 06/02/2021passed assembly
 06/02/2021returned to senate
 12/09/2021DELIVERED TO GOVERNOR
 12/21/2021SIGNED CHAP.695
 12/21/2021APPROVAL MEMO.79
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A05040 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5040
 
SPONSOR: Dinowitz
  TITLE OF BILL: An act to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four, the emergency housing rent control law and the real property law, in relation to prohibiting charges for legal fees   PURPOSE: This bill would prohibit a landlord from including.any legal fees not awarded pursuant to a court order on any correspondence to a tenant.   SUMMARY OF PROVISIONS: Section 1 amends the administrative code of the City of New York by adding section 26-416 that would prohibit an owner, lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the owner, lessor or agent has the legal authority to do so pursuant to a court order. Legal services include, but are not limited to, court fees, legal representation, attorney fees, notary public charges, and administrative fees incurred by the owner, lessor or agent in connection with management of the building, including actions and proceedings in a court of law. Any agreement or assessment to the contrary shall be void as contrary to public policy. Section 2 amends sections 6 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four by adding a new subdivision f-1 that would prohibit an owner, lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the owner, lessor or agent has the legal authority to do so pursuant to a court order. Legal services include, but are not limited to, court fees, legal representation, attorney fees, notary public charges, and administrative fees incurred by the owner, lessor or agent in connection with management of the building, including actions and proceedings in a court of law. Any agreement or assessment to the contrary shall be void as contrary to public policy. Section 3 amends section 26-512 of the administrative code of the city of New York by adding a new subdivision g that would prohibit an owner, lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the owner, lessor or agent has the legal authority to do so pursuant to a court order. Legal services include, but are not limited to, court fees, legal representation, attorney fees, notary public charges, and administrative fees incurred by the owner, lessor or agent in connection with management of the building, including actions and proceedings in a court of law. Any agreement or assessment to the contrary shall be void as contrary to public policy. Section 4 amends subdivision 4 of section 4 of chapter 274 of the laws of 1946, constituting the emergency housing rent control law that would prohibit an owner, lessor or agent from assessing a lessee any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the owner, lessor or agent has the legal authority to do so pursuant to a court order. Legal services include, but are not limited to, court fees, legal represen- tation, attorney fees, notary public charges, and administrative fees incurred by the owner, lessor or agent in connection with management of the building, including actions and proceedings in a court of law. Any agreement or assessment to the contrary shall be void as contrary to public policy. Section 5 amends the real property law by adding a new section 234-a that would prohibit an owner, lessor or agent thereof from charging or including any fee, surcharge, or other charges for legal services in connection with the operation or rental of a residential unit unless the owner, lessor or agent has the legal authority to do so pursuant to a court order. Legal services include, but are not limited to, court fees, legal representation, attorney fees, notary public charges, and adminis- trative fees incurred by the owner, lessor or agent in connection with management of the building, including actions and proceedings in a court of law. Any agreement or assessment to the contrary shall be void as contrary to public policy. Section 6 sets the effective date.   JUSTIFICATION: Nearly half of all New Yorkers live below or close to the poverty line. Accordingly, it is critical that New York City has protections in place to safeguard its residents' basic necessities, one of the most important of which is housing. With an average rent of over $51,000 in the City of New York, programs that reduce the rent burden are essential. One impor- tant example is New York City's system of rent control and rent stabili- zation, which provides a variety of tenant protections to over 2 million people. Despite the high need for these tenant protections, many landlords are increasing the cost of housing, by imposing non-rent fees on rent stabi- lized tenants. One major example, and the focus of this bill, is a fee or surcharge for legal services. Landlords do not have legal authority to impose a legal fee unless: a) the tenant's lease has a clause that allows the landlord to seek such fees; b) the tenant is sued by the landlord in a court and; c) either a judge has ordered a tenant to pay the legal fees or the tenant has agreed to pay the fee in a court approved agreement. Most of the time, landlords add these surcharges without meeting any of the above conditions. A recent survey of rent-stabilized tenants indi- cates that 56% were charged a legal fee in the last year and on average, the fee exceeded $1,000. Many tenants feel forced to pay these fees because they fear eviction. This bill is necessary to protect low- income tenants in New York City and ensure that they are not being charged more than they legally owe for rent. This extra cost raises rents and makes rent controlled and rent stabilized apartments unafford- able for many New Yorkers.   PRIOR LEGISLATIVE HISTORY: 2019-20: A.2623-A - Referred to Codes/S.3358-A Referred to Housing, Construction, and Community Development 2015-16: A.1156A - Third Reading Rules Calendar 2017-18: A.1089 - Referred to Codes/S.2377 - Referred to Housing, Construction, and Community Development 2015-16: A.1156A - Third Reading Rules Calendar No. 262/S.3591A Referred to Judiciary 2013-14: A.8262-A - Referred to Rules/S.6113-B - Referred to Judiciary   FISCAL IMPLICATIONS: None to the State.   EFFECTIVE DATE: This act shall take effect immediately; provided that: (a) section 26-416 of the city rent and rehabilitation law as added 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 26-512 of chapter 4 of title 26 of the administrative code of the city of New York, made by section three 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.
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A05040 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5040
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 10, 2021
                                       ___________
 
        Introduced  by  M.  of  A.  DINOWITZ, GOTTFRIED, L. ROSENTHAL, PICHARDO,
          COOK, BENEDETTO, PERRY, BARRON, REYES, DE LA ROSA  --  Multi-Sponsored
          by  --  M.  of  A. GLICK -- 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, the emergen-
          cy  housing rent control law and the real property law, in relation to
          prohibiting charges for legal fees
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. The administrative code of the city of New York is amended
     2  by adding a new section 26-416 to read as follows:
     3    § 26-416 Unauthorized legal fees.  An owner, lessor or  agent  thereof
     4  shall  be prohibited from assessing a lessee any fee, surcharge or other
     5  charges for legal services in connection with the operation or rental of
     6  a residential unit unless the owner,  lessor  or  agent  has  the  legal
     7  authority  to  do  so pursuant to a court order. Legal services include,
     8  but are not limited to, court fees, legal representation, attorney fees,
     9  notary public charges, and administrative fees incurred  by  the  owner,
    10  lessor or agent in connection with management of the building, including
    11  actions  and  proceedings in a court of law. Any agreement or assessment
    12  to the contrary shall be void as contrary to public policy.
    13    § 2. Section 6 of section 4 of  chapter  576  of  the  laws  of  1974,
    14  constituting  the  emergency  tenant protection act of nineteen seventy-
    15  four, is amended by adding a new subdivision f-1 to read as follows:
    16    f-1. An owner, lessor  or  agent  thereof  shall  be  prohibited  from
    17  assessing  a  lessee  any  fee,  surcharge  or  other  charges for legal
    18  services in connection with the operation or  rental  of  a  residential
    19  unit  unless the owner, lessor or agent has the legal authority to do so
    20  pursuant to a court order. Legal services include, but are  not  limited
    21  to,  court  fees,  legal  representation,  attorney  fees, notary public
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02278-01-1

        A. 5040                             2
 
     1  charges, and administrative fees incurred by the owner, lessor or  agent
     2  in  connection  with  management  of the building, including actions and
     3  proceedings in a court of law.   Any  agreement  or  assessment  to  the
     4  contrary shall be void as contrary to public policy.
     5    § 3. Section 26-512 of the administrative code of the city of New York
     6  is amended by adding a new subdivision g to read as follows:
     7    g.  An owner, lessor or agent thereof shall be prohibited from assess-
     8  ing a lessee any fee, surcharge or other charges for legal  services  in
     9  connection with the operation or rental of a residential unit unless the
    10  owner,  lessor  or  agent has the legal authority to do so pursuant to a
    11  court order.   Legal services include, but are  not  limited  to,  court
    12  fees,  legal  representation,  attorney fees, notary public charges, and
    13  administrative fees incurred by the owner, lessor or agent in connection
    14  with management of the building, including actions and proceedings in  a
    15  court of law.  Any agreement or assessment to the contrary shall be void
    16  as contrary to public policy.
    17    §  4.  Subdivision  4 of section 4 of chapter 274 of the laws of 1946,
    18  constituting the emergency housing  rent  control  law,  is  amended  by
    19  adding a new paragraph (f) to read as follows:
    20    (f) An owner, lessor or agent thereof shall be prohibited from assess-
    21  ing  a  lessee any fee, surcharge or other charges for legal services in
    22  connection with the operation or rental of a residential unit unless the
    23  owner, lessor or agent has the legal authority to do so  pursuant  to  a
    24  court  order.    Legal  services  include, but are not limited to, court
    25  fees, legal representation, attorney fees, notary  public  charges,  and
    26  administrative fees incurred by the owner, lessor or agent in connection
    27  with  management of the building, including actions and proceedings in a
    28  court of law.  Any agreement or assessment to the contrary shall be void
    29  as contrary to public policy.
    30    § 5. The real property law is amended by adding a new section 234-a to
    31  read as follows:
    32    § 234-a. Unauthorized legal fees. An owner, lessor  or  agent  thereof
    33  shall  be prohibited from assessing a lessee any fee, surcharge or other
    34  charges for legal services in connection with the operation or rental of
    35  a residential unit unless the owner,  lessor  or  agent  has  the  legal
    36  authority  to  do so pursuant to a court order.  Legal services include,
    37  but are not limited to, court fees, legal representation, attorney fees,
    38  notary public charges, and administrative fees incurred  by  the  owner,
    39  lessor or agent in connection with management of the building, including
    40  actions  and proceedings in a court of law.  Any agreement or assessment
    41  to the contrary shall be void as contrary to public policy.
    42    § 6. This act  shall  take  effect  immediately;  provided  that:  (a)
    43  section  26-416  of  the  city  rent  and rehabilitation law as added by
    44  section one of this act shall remain in full force and  effect  only  as
    45  long  as  the  public  emergency requiring the regulation and control of
    46  residential rents and evictions continues, as provided in subdivision  3
    47  of section 1 of the local emergency housing rent control act; and
    48    (b)  the  amendments to section 26-512 of chapter 4 of title 26 of the
    49  administrative code of the city of New York, made by  section  three  of
    50  this act shall expire on the same date as such law expires and shall not
    51  affect  the  expiration  of such law as provided under section 26-520 of
    52  such law.
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