NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7214
SPONSOR: Mitaynes 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 and the emer-
gency housing rent control law, in relation to the amount of time to
submit supporting documentation for major capital improvements
PURPOSE::
This bill would decrease the amount of time landlords have to submit
supporting documentation for major capital improvements.
SUMMARY OF PROVISIONS::
Section one amends Paragraph 1 of subdivision g of section 26-405 of the
administrative code of the city of New York by adding a new subparagraph
(g-1) to set the time period for landlords to submit all necessary
documentation following completion of a major capital improvement to 120
days.
Section two amends paragraph 6 of subdivision c of section 26-511 of the
administrative code of the city of New York, as amended by section 29 of
part A of chapter 20 of the laws of 2015 to set the time period for
landlords to submit all necessary documentation following completion of
a major capital improvement to 120 days.
Section three amends subdivision b of section 4 of chapter 576 of the
laws of 1974, constituting the emergency tenant protection act of nine-
teen seventy-four to set the time period for landlords to submit all
necessary documentation following completion of a major capital improve-
ment to be 120 days.
Section four amends subparagraph 7 of the second undesignated paragraph
of paragraph (a) of subdivision 4 of section 4 of chapter 274 of the
laws of 1946, constituting the emergency housing rent control law to set
the time period for landlords to submit all necessary documentation
following completion of a major capital improvement to 120 days.
Section five establishes that this law shall take effect immediately.
JUSTIFICATION::
Currently, property owners who have already completed work towards a
potential major capital improvement (MCI) have up to two years after
completion to apply and provide the appropriate supporting documentation
to seek approval for an MCI. Following this, tenants, who will ultimate-
ly be affected by a potential rent increase, only have 45 days to submit
responses and challenges to MCI applications. This bill would reduce
the time owners have to apply and submit all documents to 120 days.
A reduction in time to submit required documents allows for a more expe-
dient review and approval of an MCI application. It will also increase
the likelihood that tenants who were residing in the building during
construction are still present at the time of review so that they may
engage in the tenant response process and provide evidence of the
installation or lack thereof to decrease fraud and abuse of the program.
Property owners, who have already had work completed on buildings,
should submit their applications in a timely manner along with support-
ing documentation, and this legislation aims to accomplish that.
LEGISLATIVE HISTORY::
A 5643 Of 2023-2024
FISCAL. IMPLICATIONS::
To be determined.
EFFECTIVE DATE::
This act shall take effect immediately; provided that the amendments to
section 26-405 of the city rent and rehabilitation law made 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; the amendments to
section 26-511 of the administrative code of the city of New York made
by section two of this act shall not affect the expiration of such
section and shall be deemed to expire therewith; the amendments to
section 4 of the emergency tenant protection act of nineteen seventy-
four made by section three of this act 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 576 of the laws of 1974; and the
amendments to section 4 of the emergency housing rent control law made
by section four of this act shall expire on the same date as such law
expires and shall not affect the expiration of such law as provided in
subdivision 2 of section 1 of chapter 274 of the laws of 1946.
STATE OF NEW YORK
________________________________________________________________________
7214
2025-2026 Regular Sessions
IN ASSEMBLY
March 21, 2025
___________
Introduced by M. of A. MITAYNES -- read once and referred to the Commit-
tee on Housing
AN ACT to amend the administrative code of the city of New York, the
emergency tenant protection act of nineteen seventy-four and the emer-
gency housing rent control law, in relation to the amount of time to
submit supporting documentation for major capital improvements
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 1 of subdivision g of section 26-405 of the
2 administrative code of the city of New York is amended by adding a new
3 subparagraph (g-1) to read as follows:
4 (g-1) No increase for major capital improvements shall be granted to
5 any landlord or property owner, unless an application including all
6 necessary documentation are submitted within one hundred twenty days
7 after the completion of the new installation or improvement or improve-
8 ments; or
9 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
10 tive code of the city of New York, as separately amended by section 12
11 of part K of chapter 36 and section 28 of part Q of chapter 39 of the
12 laws of 2019, is amended to read as follows:
13 (6) provides criteria whereby the commissioner may act upon applica-
14 tions by owners for increases in excess of the level of fair rent
15 increase established under this law provided, however, that such crite-
16 ria shall provide (a) as to hardship applications, for a finding that
17 the level of fair rent increase is not sufficient to enable the owner to
18 maintain approximately the same average annual net income (which shall
19 be computed without regard to debt service, financing costs or manage-
20 ment fees) for the three year period ending on or within six months of
21 the date of an application pursuant to such criteria as compared with
22 annual net income, which prevailed on the average over the period nine-
23 teen hundred sixty-eight through nineteen hundred seventy, or for the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07253-01-5
A. 7214 2
1 first three years of operation if the building was completed since nine-
2 teen hundred sixty-eight or for the first three fiscal years after a
3 transfer of title to a new owner provided the new owner can establish to
4 the satisfaction of the commissioner that [he or she] such owner
5 acquired title to the building as a result of a bona fide sale of the
6 entire building and that the new owner is unable to obtain requisite
7 records for the fiscal years nineteen hundred sixty-eight through nine-
8 teen hundred seventy despite diligent efforts to obtain same from prede-
9 cessors in title and further provided that the new owner can provide
10 financial data covering a minimum of six years under [his or her] their
11 continuous and uninterrupted operation of the building to meet the three
12 year to three year comparative test periods herein provided; and (b) as
13 to completed building-wide major capital improvements, for a finding
14 that such improvements are deemed depreciable under the Internal Revenue
15 Code and that the cost is to be amortized over a twelve-year period for
16 a building with thirty-five or fewer housing accommodations, or a twelve
17 and one-half-year period for a building with more than thirty-five hous-
18 ing accommodations, for any determination issued by the division of
19 housing and community renewal after the effective date of the [the]
20 chapter of the laws of two thousand nineteen that amended this paragraph
21 and shall be removed from the legal regulated rent thirty years from the
22 date the increase became effective inclusive of any increases granted by
23 the applicable rent guidelines board. Temporary major capital improve-
24 ment increases shall be collectible prospectively on the first day of
25 the first month beginning sixty days from the date of mailing notice of
26 approval to the tenant. Such notice shall disclose the total monthly
27 increase in rent and the first month in which the tenant would be
28 required to pay the temporary increase. An approval for a temporary
29 major capital improvement increase shall not include retroactive
30 payments. The collection of any increase shall not exceed two percent in
31 any year from the effective date of the order granting the increase over
32 the rent set forth in the schedule of gross rents, with collectability
33 of any dollar excess above said sum to be spread forward in similar
34 increments and added to the rent as established or set in future years.
35 Upon vacancy, the landlord may add any remaining balance of the tempo-
36 rary major capital improvement increase to the legal regulated rent.
37 Notwithstanding any other provision of the law, for any renewal lease
38 commencing on or after June 14, 2019, the collection of any rent
39 increases due to any major capital improvements approved on or after
40 June 16, 2012 and before June 16, 2019 shall not exceed two percent in
41 any year for any tenant in occupancy on the date the major capital
42 improvement was approved or based upon cash purchase price exclusive of
43 interest or service charges. Where an application for a temporary major
44 capital improvement increase has been filed, a tenant shall have sixty
45 days from the date of mailing of a notice of a proceeding in which to
46 answer or reply. The state division of housing and community renewal
47 shall provide any responding tenant with the reasons for the division's
48 approval or denial of such application. Notwithstanding anything to the
49 contrary contained herein, no hardship increase granted pursuant to this
50 paragraph shall, when added to the annual gross rents, as determined by
51 the commissioner, exceed the sum of, (i) the annual operating expenses,
52 (ii) an allowance for management services as determined by the commis-
53 sioner, (iii) actual annual mortgage debt service (interest and amorti-
54 zation) on its indebtedness to a lending institution, an insurance
55 company, a retirement fund or welfare fund which is operated under the
56 supervision of the banking or insurance laws of the state of New York or
A. 7214 3
1 the United States, and (iv) eight and one-half percent of that portion
2 of the fair market value of the property which exceeds the unpaid prin-
3 cipal amount of the mortgage indebtedness referred to in subparagraph
4 (iii) of this paragraph. Fair market value for the purposes of this
5 paragraph shall be six times the annual gross rent. The collection of
6 any increase in the stabilized rent for any apartment pursuant to this
7 paragraph shall not exceed six percent in any year from the effective
8 date of the order granting the increase over the rent set forth in the
9 schedule of gross rents, with collectability of any dollar excess above
10 said sum to be spread forward in similar increments and added to the
11 stabilized rent as established or set in future years. No increase for
12 major capital improvements shall be granted to any landlord or property
13 owner, unless an application including all necessary documentation is
14 submitted within one hundred twenty days after the completion of the new
15 installation or improvement or improvements;
16 § 3. Subdivision b of section 4 of section 4 of chapter 576 of the
17 laws of 1974, constituting the emergency tenant protection act of nine-
18 teen seventy-four, is amended by adding a new paragraph 4 to read as
19 follows:
20 (4) no increase for major capital improvements shall be granted to any
21 landlord or property owner, unless an application including all neces-
22 sary documentation is submitted within one hundred twenty days after the
23 completion of the new installation or improvement or improvements;
24 § 4. Subparagraph 7 of the second undesignated paragraph of paragraph
25 (a) of subdivision 4 of section 4 of chapter 274 of the laws of 1946,
26 constituting the emergency housing rent control law, as separately
27 amended by section 25 of part Q of chapter 39 and section 14 of part K
28 of chapter 36 of the laws of 2019, is amended to read as follows:
29 (7) there has been since March first, nineteen hundred fifty, a major
30 capital improvement essential for the preservation, energy efficiency,
31 functionality, or infrastructure of the entire building, improvement of
32 the structure including heating, windows, plumbing and roofing, but
33 shall not be for operational costs or unnecessary cosmetic improvements;
34 which for any order of the commissioner issued after the effective date
35 of the chapter of the laws of two thousand nineteen that amended this
36 paragraph the cost of such improvement shall be amortized over a twelve-
37 year period for buildings with thirty-five or fewer units or a twelve
38 and one-half year period for buildings with more than thirty-five units,
39 and shall be removed from the legal regulated rent thirty years from the
40 date the increase became effective inclusive of any increases granted by
41 the applicable rent guidelines board. Temporary major capital improve-
42 ment increases shall be collectible prospectively on the first day of
43 the first month beginning sixty days from the date of mailing notice of
44 approval to the tenant. Such notice shall disclose the total monthly
45 increase in rent and the first month in which the tenant would be
46 required to pay the temporary increase. An approval for a temporary
47 major capital improvement increase shall not include retroactive
48 payments. The collection of any increase shall not exceed two percent in
49 any year from the effective date of the order granting the increase over
50 the rent set forth in the schedule of gross rents, with collectability
51 of any dollar excess above said sum to be spread forward in similar
52 increments and added to the rent as established or set in future years.
53 Upon vacancy, the landlord may add any remaining balance of the tempo-
54 rary major capital improvement increase to the legal regulated rent.
55 Notwithstanding any other provision of the law, for any renewal lease
56 commencing on or after June 14, 2019, the collection of any rent
A. 7214 4
1 increases due to any major capital improvements approved on or after
2 June 16, 2012 and before June 16, 2019 shall not exceed two percent in
3 any year for any tenant in occupancy on the date the major capital
4 improvement was approved; provided, however, where an application for a
5 temporary major capital improvement increase has been filed, a tenant
6 shall have sixty days from the date of mailing of a notice of a proceed-
7 ing in which to answer or reply. The state division of housing and
8 community renewal shall provide any responding tenant with the reasons
9 for the division's approval or denial of such application. No increase
10 for major capital improvements shall be granted to any landlord or prop-
11 erty owner, unless an application including all necessary documentation
12 is submitted within one hundred twenty days after the completion of the
13 new installation or improvement or improvements; or
14 § 5. This act shall take effect immediately; provided that:
15 a. the amendments to section 26-405 of the city rent and rehabili-
16 tation law made by section one of this act shall remain in full force
17 and effect only as long as the public emergency requiring the regulation
18 and control of residential rents and evictions continues, as provided in
19 subdivision 3 of section 1 of the local emergency housing rent control
20 act; and
21 b. the amendments to section 26-511 of the administrative code of the
22 city of New York made by section two of this act shall not affect the
23 expiration of such section and shall be deemed to expire therewith.
