Relates to the collection of charges for heat-related residential utility service

Summary of specific provisions

Subdivision 1 of section 79 of the multiple dwelling law is amended to prohibit an owner or agent of any owner from separately charging tenants or occupants for any electricity, electric service, natural gas or natural gas service or other fuel utilized to heat living quarters.

Justification

Shifting heating costs to tenants reduces economic incentives for landlords to improve the thermal efficiency of their structures, through measures such as insulation, window replacement with high efficiency glass, and provide more efficient heating systems, fixtures, and smart controls. This is contrary to state policy to promote energy efficiency and to reduce greenhouse gas emissions.

As utility costs rise, some building owners have begun to shift their costs for fuel and electricity onto their tenants, by requiring tenants to pay heating surcharges, separate and apart from rent, for fuel or electricity used to heat their dwelling units. These surcharges are based on consumption measured by either landlord-owned meters, or based on apartment square footage allocations. These surcharges, typically for natural gas or electricity, are inherently unpredictable, are not quantified in tenant leases, and are not knowable in advance. As such, they cause great hardship to tenants living on fixed incomes from social security, disability and pensions, who lack significant savings. Frequently, heating surcharges imposed by owners are not subject to outside audit or verification by the tenant and are therefore inherently prone to abuse. Shifting building owners' heating costs to tenants through unpredictable and continually varying surcharges. renders these costs not transparent to tenants, because owners are not obligated to reveal the energy inefficiencies of their buildings or the amount of energy wasted by the heating equipment they operate. In contrast, if building owners retain direct responsibility for heating costs, they will recover those costs in the rent they charge and they will have the incentive to adopt cost effective efficiency measures. The charge for rent is fixed and transparent, and can be understood by existing and prospective tenants. The Multiple Dwelling Law already imposes upon landlords the obligation to provide heat or heating fixtures to tenants.

This bill prevents owners of multiple dwellings from imposing charges for natural gas, electricity, or other fuel used fox space heating separate from the stated rent. It does not affect situations where a tenant has directly metered gas or electric service from a franchised gas corporation or electric corporation.

Requiring tenants to pay surcharges to building owners for fuel and electricity for heating denies them the protections of programs designed by the legislature to protect low income utility customers from abuse, such as the Home Energy Fair Practices Act (HEFPA), and the legislatively-created safety nets for the needy including the emergency utility assistance program under Social Services Law § 131-s and the energy crisis provisions of the home energy assistance program under Social Services Law 97 (HEAP). Customer remedies and assistance in these programs is triggered by a notice of termination of utility service, and is not available when surcharges for heating costs are deemed to be "added rent," allowing landlords to evict tenants for nonpayment. Tenants who encounter temporary difficulty in meeting their obligations to pay for fluctuating charges heat-related utility service are in a far worse position than direct utility company over unpaid or disputed charges; they are given the opportunity to pay arrears over time in affordable installments through deferred payment plans, which must be offered as an alternative to termination of utility service, and they have the opportunity to obtain emergency HEAP or Social Services Law section 131-s assistance. Such assistance is not available when the landlord imposes a rent surcharge for a utility service it provides through its own meters or for the cost of utility service which the landlord uses to heat the premises and allocates based on square footage or other factors.

Prior legislative history

2011-2012: S.1775 Referred to Housing, Construction & Community Development 2009-2010: S.4749 Referred to Housing, Construction & Community Development

Fiscal implications

None is anticipated.

Effective date

This act shall take effect immediately.