What's happening
This bill defines residential ground leases and sets rules for lessees to encumber their lease interest, including conditions for lessor approval and annual adjustment limits.
Why it matters
Clarifies and standardizes the definition of "residential ground lease". , making it clear when these legal protections and obligations apply. This helps both landlords and tenants understand their rights and duties under such long-term arrangements.
Empowers lessees (tenants) to use their leasehold interest as collateral for loans or refinancing. , unless the lease specifically forbids it. This can enhance access to credit for homeowners or developers who lease land, potentially making it easier to finance improvements or renovations.
Requires lessors (landowners) to act fairly and transparently when a lessee requests permission to encumber the lease. , permitting refusal only for "reasonable cause" and mandating a written explanation within 15 days. This limits arbitrary or unexplained denials, providing greater predictability for tenants.
Mandates that any limits on how much a lessee can encumber (borrow against) their lease must automatically adjust each year according to inflation. , using the regional Consumer Price Index. This protects lessees from having their borrowing power eroded over time and voids any attempt to waive these protections, reinforcing tenant rights as a matter of public policy.
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Who cares
Residential ground-lease tenants
The bill would allow tenants under qualifying leases to pledge up to their entire leasehold interest as collateral unless the lease expressly prohibits it, with written landlord permission required where restrictions apply.
Residential ground lessors
Landlords whose permission is required would have to base refusals on reasonable cause and provide written reasons within fifteen days of a tenant’s written request.
Lenders financing residential leasehold interests
The bill would require annual inflation adjustments to lease provisions limiting how much tenants may borrow against their interests and prevent downward adjustments from making existing borrowing a lease breach.
Headline styles
Let Tenants Borrow on Leases
Plain English, a few words. Used as the page title.
Sponsors
Assembly Member · Assembly District 26
1 Co-sponsor
History
- Referred to judiciary
- Delivered to senate
- Passed assembly
- Ordered to third reading cal.33
- Returned to assembly
- Died in senate
- Referred to codes
- Delivered to senate
- Passed assembly
- Advanced to third reading cal.85
- Reported
- Reported referred to codes
Show 1 earlier action
- Referred to housing
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Let Tenants Borrow on Leases
In Senate Committee · Judiciary · Sponsor Toby Ann Stavisky
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
353
2017-2018 Regular Sessions
IN ASSEMBLY
January 5, 2017
Introduced by M. of A. BRAUNSTEIN -- read once and referred to the Committee on Housing
AN ACT to amend the real property law, in relation to ground leases
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The real property law is amended by adding a new section 220-a to read as follows:
§ 220-a. Residential ground leases. 1. Definitions. For the purposes of this section only, a "residential ground lease" shall be defined as a rental agreement that:
(a) has a term of at least ten years;
(b) is for the use of real property, which may or may not include any improvements or structures, but shall not apply to real property owned as the common property of any Indian nation, tribe, or band as such lands are described under and protected by Indian law and/or Title 25 of the United States Code; and
(c) allows a tenant to construct or substantially improve, renovate, or rehabilitate structures or improvements that include one or more residential dwellings upon such real property.
2. Refinancing. (a) If any residential ground lease does not contain express provisions prohibiting a lessee from encumbering its interest in a residential ground lease, a lessee may encumber up to and including its entire interest in such residential ground lease. If such residential ground lease contains provisions restricting the lessee's ability to encumber its interest, the lessee must obtain the lessor's written permission prior to such encumbrance.
(b) If the lessee is required to obtain the lessor's permission to encumber the lessee's interest, the lessor may only refuse to grant such permission for reasonable cause and must provide the lessee with a written statement that sets forth the basis for the refusal within fifteen days of a written request for permission from the lessee.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01747-01-7
A. 353 2
(c) Any residential ground lease provision that limits the amount a lessee could encumber its interest, up to and including its entire interest in such residential ground lease, shall also adjust such amount annually on the first day of October of each year by the change in the regional consumer price index for all urban consumers, New York-Northern New Jersey-Long Island, NY-NJ-CT-PA, as established the preceding August.
If a lessee has encumbered its interest in a residential ground lease, no adjustment pursuant to this paragraph that reduces the amount such lessee could receive shall be considered a breach of the residential ground lease. Any agreement by a lessee waiving or modifying the provisions as set forth in this paragraph shall be void as contrary to public policy.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.