Provides for triennial reports by city of New York to the governor and legislature on the program for regulatory agreements with new owners of certain dwellings

1 Co-sponsor

• Antoine M. Thompson

Title of bill

An act to amend the real property actions and proceedings law, in relation to new owners of buildings for which administrators have been appointed; and to amend chapter 375 of the laws of 1999 amending the real property actions and proceedings law relating to new owners of buildings for which administrators have been appointed pursuant to article 7-A of such law, in relation to the effectiveness thereof

Summary of provisions

Subdivision 10 of section 778 of the Real Property Actions and Proceedings Law (the "RPAPL") grants the City of New York ("the City") authority to "evaporate" (reduce to zero) liens on Article 7-A properties for municipally financed repairs. This authority will expire on June 30, 2009, unless it is extended by the provisions, of this legislation. Furthermore, the City's deadline for submitting a report to the Governor, the Senate and the Assembly, describing the program activities carried out during the two prior calendar years pursuant to subdivision 10, is also extended.

Reasons for support

Pursuant to Article 7-A, the Civil Court of the City of New York appoints administrators to operate privately owned buildings that have been effectively abandoned by their owners and have created conditions dangerous to the life, health and safety of tenants still living in such buildings. Administrators act under court order to collect rents, which are used for providing essential services to tenants and for making necessary repairs. In many instances, City capital funds are utilized to repair or replace major systems or to make other necessary improvements.

All money expended by the City for such purposes becomes a lien on the property. Subdivision 10 of Section 788 of the RPAPL provides that a new owner of an Article 7-A property may take advantage of lien evaporation only if he or she enters into a regulatory agreement with the New York City Department of Housing Preservation and Development ("HPD"). This regulatory agreement requires that the Article 7-A property be utilized for affordable housing and permits the lien to be evaporated after a 15-year period of compliance with the agreement. The regulatory agreement also requires that the new owner certify that the prior owner of the property has no direct or indirect interest in the property and that the prior owner has no direct or indirect interest in the new owner.

Article 7-A has enabled the City to encourage not-for-profit and for-profit entitles to purchase 7-A buildings, allowing such properties to be developed into a source of permanent affordable housing for families and individuals. The Article 7-A evaporation is limited exclusively to the transfer of a building to a new owner who has no business or other interests with the original owner. This will prevent a prior owner of an Article 7-A administered building from benefiting from lien evaporation. New owners must comply with all provisions of the regulatory agreement entered into with HPD in order for lien evaporation to be utilized.

This legislation will allow the City to continue to transform effectively-abandoned buildings, often in dangerous disrepair, into a source of permanent affordable housing.

Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.