Gottfried, Rosenthal L, Pichardo, Cook, Benedetto, Perry, Barron, Reyes, De La Rosa, Rodriguez
 
MLTSPNSR
Glick
 
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.
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.
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.