STATE OF NEW YORK ________________________________________________________________________ 3987 2019-2020 Regular Sessions IN SENATE February 22, 2019 ___________ Introduced by Sen. STAVISKY -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary 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 Assem- bly, do enact as follows: 1 Section 1. The real property law is amended by adding a new section 2 220-a to read as follows: 3 § 220-a. Residential ground leases. 1. Definitions. For the purposes 4 of this section only, a "residential ground lease" shall be defined as a 5 rental agreement that: 6 (a) has a term of at least ten years; 7 (b) is for the use of real property, which may or may not include any 8 improvements or structures, but shall not apply to real property owned 9 as the common property of any Indian nation, tribe, or band as such 10 lands are described under and protected by Indian law and/or Title 25 of 11 the United States Code; and 12 (c) allows a tenant to construct or substantially improve, renovate, 13 or rehabilitate structures or improvements that include one or more 14 residential dwellings upon such real property. 15 2. Refinancing. (a) If any residential ground lease does not contain 16 express provisions prohibiting a lessee from encumbering its interest in 17 a residential ground lease, a lessee may encumber up to and including 18 its entire interest in such residential ground lease. If such residen- 19 tial ground lease contains provisions restricting the lessee's ability 20 to encumber its interest, the lessee must obtain the lessor's written 21 permission prior to such encumbrance. 22 (b) If the lessee is required to obtain the lessor's permission to 23 encumber the lessee's interest, the lessor may only refuse to grant such 24 permission for reasonable cause and must provide the lessee with a writ- 25 ten statement that sets forth the basis for the refusal within fifteen 26 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. LBD02662-01-9

S. 3987 2 1 (c) Any residential ground lease provision that limits the amount a 2 lessee could encumber its interest, up to and including its entire 3 interest in such residential ground lease, shall also adjust such amount 4 annually on the first day of October of each year by the change in the 5 regional consumer price index for all urban consumers, New York-Northern 6 New Jersey-Long Island, NY-NJ-CT-PA, as established the preceding 7 August. 8 If a lessee has encumbered its interest in a residential ground lease, 9 no adjustment pursuant to this paragraph that reduces the amount such 10 lessee could receive shall be considered a breach of the residential 11 ground lease. Any agreement by a lessee waiving or modifying the 12 provisions as set forth in this paragraph shall be void as contrary to 13 public policy. 14 § 2. This act shall take effect immediately.

Relates to ground leases

What's Happening

Why It Matters