3 Bills passed legislature, await Gov's signature

The bill that would effectively end Frankensteining passed the NYS legislature in June 2023 and awaits Governor Hochul's signature, "chapter amendments" (modification), or veto.  We need her to sign it as soon as it crosses her desk, so contact us and we'll help you adapt a memo of support. 

S2980/A6216 would close five loopholes harming tenants in rent stabilized housing.  Click here to read more about it. 

 

S2980/A6216: Frankensteining, Succession, Fraud & More

Sponsored by Sen. Brian Kavanagh & Assembly Member Linda Rosenthal

 

I. Frankensteining: By ensuring ongoing stabilization and a reasonable first rent for combined apartments, this bill would deter landlords from warehousing tens of thousands of empty rent stabilized apartments to combine them with nearby units. Specifically, 

• All new apartments created out of any rent stabilized unit plus any other space (stabilized or not) would remain rent stabilized.  

• Frankensteining two or more stabilized units into a new apartment would combine their rents, plus any applicable Individual Apartment Improvement (IAI)      increases.  

• Combining/Dividing up a rent stabilized unit with any non-residential space would increase/decrease the rent by the same percentage as the rent stabilized apartment’s area is increased/decreased, plus the applicable IAI.   

• DHCR could deny increases to landlords who harass tenants out to get the vacant apartment to be combined.

• Landlords would have to keep records of all apartments both before & after any dividing or combining. 

II. Succession: The bill would ease succession rights where the tenant named on the lease moved out but continued to sign lease renewals or paid the rent.  "Permanently vacated" = when the tenant of record actually permanently moved out (regardless of signing lease renewals or paying rent).

III. Substantial Rehabilitation:  The bill would rein in abuses where a landlord claims that the building is exempt from rent regulation because of a substantial rehabilitation that may have occurred years ago but where the landlord failed to apply for an order deregulating the building.  The bill requires landlords who have rehabilitated buildings enough to remove them from regulation to apply to HCR for deregulation within a year of completing the work. (For old claims, they now get 6 months.)

No deregulation where owner harassed tenants in previous 5 years, or the building never required substantial rehabilitation. 

IV.  Overcharges:  When a tenant claims an overcharge, DHCR and courts are limited to looking back only 4 years - except where there’s fraud.  

Recent case decisions have limited what "fraud" means. Under this statute:

Owner committed fraud if they breached a legal duty to disclose to tenant, govt. or tribunal 

• the rent
• the regulatory status
• lease information

in order to claim an unlawful rent or to have deregulated.

 Fraud includes:

(1)          unlawfully deregulating an apartment (such as by claiming  illegal increases to bring rent over deregulation amount) - except where landlord relied on govt. directive.

 

(2) failing to register as stabilized any apartment in building getting J-51 or 421a benefits.

V. No registration? No rent increases

A. Landlords will be fined $500 per stabilized apartment for every month that they fail to register a stabilized apartment on DHCR's request.   

B. Landlords can't collect any legal rent increases until the apartment registration is filed. But landlords can fix this by filing a late registration and won't be presumed to have overcharged tenants.