Extend Rent Overcharge Claims

Section 1. Subdivisions a and g of section 26-516 of the administrative code of the city of New York, subdivision a as amended by chapter 116 of the laws of 1997, are amended to read as follows:

a. Subject to the conditions and limitations of this subdivision, any owner of housing accommodations who, upon complaint of a tenant, or of the state division of housing and community renewal, is found by the state division of housing and community renewal, after a reasonable opportunity to be heard, to have collected an overcharge above the rent authorized for a housing accommodation subject to this chapter shall be liable to the tenant for a penalty equal to three times the amount of such overcharge. [In no event shall such] Except as provided for in section 26-504.4 of this chapter, treble damage [penalty] penalties shall not be assessed against an owner based solely on said owner's failure to file a timely or proper initial or annual rent registration statement. If the owner establishes by a preponderance of the evidence that the overcharge was not willful, the state division of housing and community renewal shall establish the penalty as the amount of the overcharge plus interest. (i) Except as to complaints filed pursuant to

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD05963-01-9

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clause (ii) of this paragraph, the legal regulated rent for purposes of determining an overcharge, shall be the rent indicated in the annual registration statement filed [four] six years prior to the most recent registration statement, (or, if more recently filed, the initial registration statement) plus in each case any subsequent lawful increases and adjustments. Where the amount of rent set forth in the annual rent registration statement filed [four] six years prior to the most recent registration statement is not challenged within [four] six years of its filing, neither such rent nor service of any registration shall be subject to challenge at any time thereafter. (ii) As to complaints filed within ninety days of the initial registration of a housing accommodation, the legal regulated rent shall be deemed to be the rent charged on the date [four] six years prior to the date of the initial registration of the housing accommodation (or, if the housing accommodation was subject to this chapter for less than [four] six years, the initial legal regulated rent) plus in each case, any lawful increases and adjustments. Where the rent charged on the date [four] six years prior to the date of the initial registration of the accommodation cannot be established, such rent shall be established by the division.

Where the rent charged on the date [four] six years prior to the date of initial registration of the housing accommodation cannot be established, such rent shall be established by the division provided that where a rent is established based on rentals determined under the provisions of the local emergency housing rent control act such rent must be adjusted to account for no less than the minimum increases which would be permitted if the housing accommodation were covered under the provisions of this chapter. Where the amount of rent set forth in the annual rent registration statement filed [four] six years prior to the most recent registration statement is not challenged within [four] six years of its filing, neither such rent nor service of any registration shall be subject to challenge at any time thereafter.

(1) The order of the state division of housing and community renewal shall apportion the owner's liability between or among two or more tenants found to have been overcharged by such owner during their particular tenancy of a unit.

(2) Except as provided under clauses (i) and (ii) of this paragraph, a complaint under this subdivision shall be filed with the state division of housing and community renewal within [four] six years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of an overcharge may be based upon an overcharge having occurred more than [four] six years before the complaint is filed. (i) No penalty of three times the overcharge may be based upon an overcharge having occurred more than [two] six years before the complaint is filed or upon an overcharge which occurred prior to April first, nineteen hundred eighty-four. (ii) Any complaint based upon overcharges occurring prior to the date of filing of the initial rent registration as provided in section 26-517 of this chapter shall be filed within ninety days of the mailing of notice to the tenant of such registration. This paragraph shall preclude examination of the rental history of the housing accommodation prior to the [four-year] six-year period preceding the filing of a complaint pursuant to this subdivision.

(3) Any affected tenant shall be notified of and given an opportunity to join in any complaint filed by an officer or employee of the state division of housing and community renewal.

(4) An owner found to have overcharged may be assessed the reasonable costs and attorney's fees of the proceeding and interest from the date

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of the overcharge at the rate of interest payable on a judgment pursuant to section five thousand four of the civil practice law and rules.

(5) The order of the state division of housing and community renewal awarding penalties may, upon the expiration of the period in which the owner may institute a proceeding pursuant to article seventy-eight of the civil practice law and rules, be filed and enforced by a tenant in the same manner as a judgment or not in excess of twenty percent thereof per month may be offset against any rent thereafter due the owner.

g. Any owner who has duly registered a housing accommodation pursuant to section 26-517 of this chapter shall not be required to maintain or produce any records relating to rentals of such accommodation for more than [four] six years prior to the most recent registration or annual statement for such accommodation.

§ 2. Subdivision b and subparagraph (g) of paragraph 1 of subdivision g of section 26-405 of the administrative code of the city of New York, subparagraph (g) of paragraph 1 of subdivision g as amended by section 31 of part A of chapter 20 of the laws of 2015, are amended to read as follows:

b. Such agency, to effectuate the purposes of this chapter, and in accordance with the standards set forth in paragraph two of subdivision c of this section, may set aside and correct any maximum rent resulting from illegality, irregularity in vital matters [or], fraud, or rent overcharges regardless of whether there was fraud or illegality, occurring prior to or after May first, nineteen hundred sixty-two.

(g) There has been since July first, nineteen hundred seventy, a major capital improvement required for the operation, preservation or maintenance of the structure. An adjustment under this subparagraph (g) for any order of the commissioner issued after the effective date of the rent act of 2015 shall be in an amount sufficient to amortize the cost of the improvements pursuant to this subparagraph (g) over an eight-year period for buildings with thirty-five or fewer units or a nine year period for buildings with more than [thiry-five] thirty-five units, or

§ 3. Section 26-504.2 of the administrative code of the city of New York is amended by adding a new subdivision c to read as follows:

c. Notwithstanding section 26-516 of this chapter and section two hundred thirteen-a of the civil practice law and rules, the periods provided for therein for examination of the rental history of the accommodation for the determination of an overcharge and whether the accommodation is subject to this law are extended by the period during which the owner is not in compliance with the requirements of subdivision b of this section.

§ 4. The administrative code of the city of New York is amended by adding a new section 26-504.4 to read as follows:

§ 26-504.4 Deregulation. Notwithstanding any provision of law to the contrary, where a unit is deregulated as a result of overcharges, the unit shall be returned to rent stabilization under the applicable sections of law, within six months. Where an owner fails to register such unit as rent stabilized pursuant to section 26-517 of this chapter, the state division of housing and community renewal shall impose a penalty equal to the amount of such overcharge, plus accrued interest. For each year an owner fails to register such unit pursuant to section 26-517 of this chapter, penalties imposed by the state division of housing and community renewal shall be at least two thousand dollars and shall not exceed ten thousand dollars.

§ 5. Paragraph 1 of subdivision a of section 12 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant

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protection act of nineteen seventy-four, as amended by chapter 403 of the laws of 1983, the opening paragraph and clause (i) of subparagraph (b) as amended by chapter 116 of the laws of 1997, is amended to read as follows:

(1) Subject to the conditions and limitations of this paragraph, any owner of housing accommodations in a city having a population of less than one million or a town or village as to which an emergency has been declared pursuant to section three, who, upon complaint of a tenant or of the state division of housing and community renewal, is found by the state division of housing and community renewal, after a reasonable opportunity to be heard, to have collected an overcharge above the rent authorized for a housing accommodation subject to this act shall be liable to the tenant for a penalty equal to three times the amount of such overcharge. [In no event shall such] Except as provided for in section five-b of this section, treble damage [penalty] penalties shall not be assessed against an owner based solely on said owner's failure to file a proper or timely initial or annual rent registration statement. If the owner establishes by a preponderance of the evidence that the overcharge was neither willful nor attributable to his negligence, the state division of housing and community renewal shall establish the penalty as the amount of the overcharge plus interest at the rate of interest payable on a judgment pursuant to section five thousand four of the civil practice law and rules. (i) Except as to complaints filed pursuant to clause (ii) of this paragraph, the legal regulated rent for purposes of determining an overcharge, shall be deemed to be the rent indicated in the annual registration statement filed [four] six years prior to the most recent registration statement, (or, if more recently filed, the initial registration statement) plus in each case any subsequent lawful increases and adjustments. Where the amount of rent set forth in the annual rent registration statement filed [four] six years prior to the most recent registration statement is not challenged within [four] six years of its filing, neither such rent nor service of any registration shall be subject to challenge at any time thereafter. (ii) As to complaints filed within ninety days of the initial registration of a housing accommodation, the legal regulated rent for purposes of determining an overcharge shall be deemed to be the rent charged on the date [four] six years prior to the date of the initial registration of the housing accommodation (or, if the housing accommodation was subject to this act for less than [four] six years, the initial legal regulated rent) plus in each case, any lawful increases and adjustments. Where the rent charged on the date [four] six years prior to the date of the initial registration of the accommodation cannot be established, such rent shall be established by the division. Where the amount of rent set forth in the annual rent registration statement filed [four] six years prior to the most recent registration statement is not challenged within [four] six years of its filing, neither such rent nor service of any registration shall be subject to challenge at any time thereafter.

(a) The order of the state division of housing and community renewal shall apportion the owner's liability between or among two or more tenants found to have been overcharged by such owner during their particular tenancy of a unit.

(b) (i) Except as provided under clauses (ii) and (iii) of this subparagraph, a complaint under this subdivision shall be filed with the state division of housing and community renewal within [four] six years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of an overcharge

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may be based upon an overcharge having occurred more than [four] six years before the complaint is filed. This paragraph shall preclude examination of the rental history of the housing accommodation prior to the [four-year] six-year period preceding the filing of a complaint pursuant to this subdivision.