What's happening
This bill defines residential ground leases and sets rules for tenants' rights to encumber their leaseholds, including required lessor permissions and annual adjustment provisions.
Why it matters
Clarifies and protects tenant financing rights. By explicitly allowing tenants to use their leasehold interest as collateral (unless expressly prohibited), the bill gives tenants greater access to credit and the ability to finance improvements or renovations, impacting both affordability and property investment.
Sets standards for lessor consent. Landlords (lessors) must provide written reasons within 15 days if they deny permission for tenants to encumber their lease, and can only refuse for "reasonable cause." This introduces transparency and limits arbitrary withholding of consent, offering tenants more predictability.
Mandates annual adjustment of encumbrance limits. Any cap on how much a tenant can encumber their leasehold must be adjusted yearly based on inflation (regional Consumer Price Index). This prevents erosion of tenant financing power over long leases due to inflation, helping maintain the real value of the right to encumber.
Prohibits waiver of key tenant protections. Tenants cannot be forced to sign away these rights, as any agreement to waive or modify the statutory adjustment provisions is void. This ensures long-term, non-negotiable protections for tenants regardless of individual bargaining power.
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Who cares
Headline styles
Protect Tenant Ground Lease Rights
Plain English, a few words. Used as the page title.
Sponsors
Assembly Member · Assembly District 26
2 Co-sponsors
History
- Tabled
- Vetoed memo.170
- Delivered to governor
- Returned to assembly
- Passed senateVote 61–0
- 3rd reading cal.702
- Substituted for S3987
- Referred to judiciary
- Delivered to senate
- Passed assembly
- Advanced to third reading cal.273
- Reported
Show 2 earlier actions
- Reported referred to codes
- 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.
Protect Residential Ground Leases
Senate Floor Calendar · Sponsor Toby Ann Stavisky
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
215
2019-2020 Regular Sessions
IN ASSEMBLY (Prefiled)
January 9, 2019
Introduced by M. of A. BRAUNSTEIN, BARRON -- 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 writ-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02662-01-9
A. 215 2
ten statement that sets forth the basis for the refusal within fifteen days of a written request for permission from the lessee.
(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.