On December 22, 2023, Governor Hochul signed S2980C (the “Bill”) into law, with certain amendments to be passed by the Legislature in the upcoming session, commencing on January 3, 2024. The Senate version of the bill is available here. We expect the signed version of the Bill will include some significant amendments in the upcoming legislative session that deviate from the details set forth below.
The Bill, in its current form, requires the following:
- owners of substantially rehabilitated buildings obtain an affirmative determination from DHCR of the building’s exempt status;
- owners are required to file an application with DHCR to determine the exemption within one year of the completion of the project;
- the elimination of DHCR’s “First Rent Rule”;
- permanently vacating would be determined by the date the tenant permanently stops residing in the housing accommodation, regardless of subsequent contacts with the unit or the signing of lease renewals or continuation of rent payments;
- a new definition of the scope of the fraud exception to pre-HSTPA four year rules for calculating rents to circumvent Regina; and
- the Bill imparts new penalties for not filing rent registrations.
However, there is some good news for owners: Governor Hochul vetoed Assembly Bill A4047B, which sought to create liability for rent overcharge – including those issues set forth in Regina, particularly redefining an owner’s collection of overcharges and failure to return apartments to rent stabilization as fraud, among other impositions.
Uncertainty lingers as owners wait to learn the specific details of Governor Hochul’s bill. We will provide an update once we receive the amended version of the Bill, as signed by the Governor.
For more information or if you have any questions, please reach out to your BBG attorney of record or contact us here.