Bill Text: NY S03805 | 2019-2020 | General Assembly | Introduced

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Bill Title: Relates to establishing the tenancy deposit protection program; requires the commissioner of housing and community renewal to establish a program to hold security deposits in third-party accounts and create a dispute resolution process regarding the withholding of security deposits.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2020-01-08 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S03805 Detail]

Download: New_York-2019-S03805-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          3805
                               2019-2020 Regular Sessions
                    IN SENATE
                                    February 14, 2019
                                       ___________
        Introduced  by  Sen.  RAMOS  -- read twice and ordered printed, and when
          printed to be committed to the Committee on Housing, Construction  and
          Community Development
        AN  ACT to amend the public housing law and the general obligations law,
          in relation to establishing the tenancy deposit protection program
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Subdivision  1 of section 14 of the public housing law is
     2  amended by adding a new paragraph (x) to read as follows:
     3    (x) administer the tenancy  deposit  protection  program  pursuant  to
     4  section 7-103 of the general obligations law.
     5    § 2. Section 7-103 of the general obligations law, as amended by chap-
     6  ter 1009 of the laws of 1970, subdivisions 2 and 2-a as amended by chap-
     7  ter 402 of the laws of 1979, is amended to read as follows:
     8    § 7-103. Money deposited or advanced for use or rental of real proper-
     9  ty;  [waiver  void;  administration expenses] tenancy deposit protection
    10  program. 1. [Whenever money shall be deposited or advanced on a contract
    11  or license agreement for the use or rental of real property as  security
    12  for  performance  of  the  contract  or  agreement  or  to be applied to
    13  payments upon such contract or agreement  when  due,  such  money,  with
    14  interest  accruing  thereon,  if  any, until repaid or so applied, shall
    15  continue to be the money of the person making such  deposit  or  advance
    16  and  shall  be  held  in  trust  by the person with whom such deposit or
    17  advance shall be made and shall not be mingled with the personal  moneys
    18  or become an asset of the person receiving the same, but may be disposed
    19  of  as provided in section 7-105 of this chapter.] There shall be estab-
    20  lished within the division of housing and community  renewal  a  tenancy
    21  deposit protection program.
    22    2. [Whenever the person receiving money so deposited or advanced shall
    23  deposit such money in a banking organization, such person shall thereup-
    24  on notify in writing each of the persons making such security deposit or
    25  advance,  giving  the  name  and  address of the banking organization in
    26  which the deposit of security money is made,  and  the  amount  of  such
    27  deposit.  Deposits  in a banking organization pursuant to the provisions

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00548-01-9
        S. 3805                             2

     1  of this subdivision shall be made in a  banking  organization  having  a
     2  place  of business within the state. If the person depositing such secu-
     3  rity money in a banking organization shall deposit same in  an  interest
     4  bearing  account,  he  shall  be  entitled to receive, as administration
     5  expenses, a sum equivalent to one per cent per annum upon  the  security
     6  money  so  deposited, which shall be in lieu of all other administrative
     7  and custodial expenses. The balance of the interest paid by the  banking
     8  organization  shall  be  the  money  of the person making the deposit or
     9  advance and shall either be held in trust by the person with  whom  such
    10  deposit or advance shall be made, until repaid or applied for the use or
    11  rental of the leased premises, or annually paid to the person making the
    12  deposit of security money.
    13    2-a.  Whenever the money so deposited or advanced is for the rental of
    14  property containing six  or  more  family  dwelling  units,  the  person
    15  receiving  such  money shall, subject to the provisions of this section,
    16  deposit it in an interest bearing  account  in  a  banking  organization
    17  within the state which account shall earn interest at a rate which shall
    18  be  the  prevailing rate earned by other such deposits made with banking
    19  organizations in such area.
    20    2-b. In the event that a lease terminates other than at the time  that
    21  a  banking organization in such area regularly pays interest, the person
    22  depositing such security money shall pay over to his tenant such  inter-
    23  est  as  he  is  able to collect at the date of such lease termination.]
    24  Such program shall:
    25    (a) include a system where tenant security deposits or advances  on  a
    26  contract or agreement for the use or rental of real property are held by
    27  a third-party custodian and arbiter, with interest accruing thereon;
    28    (b)  require landlords to place a tenant's security deposit or advance
    29  in such system if a security deposit or advance is received;
    30    (c) include a process for returning the security deposit or advance to
    31  the tenant;
    32    (d) require that if a landlord wishes to withhold such security depos-
    33  it or advance, the landlord shall make  an  agreement  with  the  tenant
    34  specifying  the  amount of money to be withheld and the reasons for such
    35  withholding;
    36    (e) establish a dispute resolution service for  disagreements  arising
    37  over  the withholding of a security deposit or advance to be provided at
    38  no cost to the landlord and tenant;
    39    (f) require that both parties agree prior to using the dispute  resol-
    40  ution service that the decision of such service is binding; and
    41    (g)  include  any  other  regulations  as  determined necessary by the
    42  commissioner of housing and community renewal.
    43    2-a. Any person who violates the requirement  specified  in  paragraph
    44  (b) of subdivision two of this section shall be punished by a civil fine
    45  of up to fifteen percent of the annual rent under such contract.
    46    3.  Any provision of such a contract or agreement whereby a person who
    47  so deposits or advances money waives any provision of  this  section  is
    48  absolutely void.
    49    4. The term "real property" as used in this section is co-extensive in
    50  meaning with lands, tenements and hereditaments.
    51    § 3. This act shall take effect on the one hundred twentieth day after
    52  it  shall have become a law. Effective immediately, the addition, amend-
    53  ment and/or repeal of any rule or regulation necessary for the implemen-
    54  tation of this act on its effective date are authorized to be  made  and
    55  completed on or before such effective date.