Authorizes the commissioner of housing preservation and development for the city of New York to bring a special proceeding for appointment of an administrator for distressed property

Summary of provisions

Section 1 adds the issuance of an order by the Commissioner of the New York City Department of Housing Preservation and Development ("HPD") pursuant to Administrative Code § 27-2153 as a basis for bringing a special proceeding to appoint an administrator.

This section also adds the existence of any municipal arrears or lien on the property as a basis for HPD to bring an Article 7P. proceeding. New York City Administrative Code § 27-2153 sets forth the City's Alternative Enforcement Program ("AEP"), which empowers fin to designate certain poorly maintained properties as candidates for special enforcement treatment. Under the AEP, if an owner fails to comply with a directive to repair violations, HPD may issue an order and file it against the property, requiring that significant repair work be performed. If an owner fails to do the work, HPD ensures that such work is performed, and the cost of the work and program fees become a lien against the property.

Section 2 clarifies that the court may authorize an administrator to lease all or any part of the premises that he or she administers. It also requires an owner to pay or enter into a payment agreement to pay all outstanding real property tax liens claimed by NYC, all outstanding charges of the alternative enforcement program, and all other liens filed by NYC under RPL Section 778. Finally, it provides that the administrator can be reimbursed for legal fees incurred in connection with management of the property.

Section 3 clarifies that even when an administrator is appointed, an owner remains liable for injury to persons and property as a result of conditions on the premises.

Section 4 authorizes the bill to take effect immediately.

Justification

When owners of buildings included in the AEP abandon their buildings, often no one is left in place to manage them. This causes undue hardship and confusion for existing tenants, in addition to allowing buildings to fall into disrepair. While the City steps in to repair such buildings, there is still a need for a day-to-day manager or administrator. This legislation provides two additional grounds for bringing a special proceeding to appoint such an administrator: an owner's failure to comply with an ASP order, and the existence of municipal arrears or liens on these buildings. Appointment of an administrator in these two cases will help ensure

that tenants are provided with essential services, and help prevent abandonment or further deterioration of such buildings.

The provision related to leasing is important to ensure that buildings are competently run and able to realize all potential revenue. Mandating that an owner repay or enter into a payment agreement to repay all outstanding real property tax liens, all outstanding emergency repair liens filed and recorded by the City of New York and outstanding liens filed and recorded by the City pursuant to this section before the administrator is discharged ensures that the owner is financially capable of keeping the building in sound condition and reimburses the City for rehabilitating the building. The provisions related to administrator liability address a continuing issue where administrators must defend themselves in litigation which should properly be brought against an owner. These provisions provide for reimbursement of the administrator for legal fees incurred in such proceedings, and clarify that the owner is still liable for injury to persons or property due to conditions on the premises.

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

Legislative history

New Bill.

FISCAL IMPLICATIONS:Mone.

Effective date

This act shall take effect immediately.