Real Property Actions & Proceedings

ARTICLE 7-A

SPECIAL PROCEEDINGS BY TENANTS OF DWELLINGS
IN THE CITY OF NEW YORK AND THE COUNTIES OF NASSAU,
SUFFOLK, ROCKLAND AND WESTCHESTER FOR JUDGMENT
DIRECTING DEPOSIT OF RENTS AND THE USE THEREOF FOR THE
PURPOSE OF REMEDYING CONDITIONS DANGEROUS TO LIFE,
HEALTH OR SAFETY
Section 769. Jurisdiction; court; venue.
770. Grounds for the proceeding.
771. Commencement; notice of petition; time and manner of
service.
772. Contents of petition.
773. Answer.
774. Trial.
775. Defenses.
776. Judgment.
777. Application by mortgagee or lienor of record or other
person having an interest in the property.
778. Appointment of administrator.
779. Presentation or settlement of accounts.
780. Waiver void.
781. "Owner" defined.
782. "Dwelling" defined.
783. Defense of warranty of habitability inapplicable.

S 769. Jurisdiction; court; venue. 1. A special proceeding by tenants
of a dwelling in the city of New York or the counties of Nassau,
Suffolk, Rockland and Westchester for a judgment directing the deposit
of rents into court and their use for the purpose of remedying
conditions dangerous to life, health or safety may be maintained in the
civil court of the city of New York, the district court of the counties
of Suffolk and Nassau and the county courts or city courts in the
counties of Rockland and Westchester.
2. The place of trial of the special proceeding shall be within the
county in which the real property or a portion thereof from which the
rents issue is situated.

S 770. Grounds for the proceeding. 1. One-third or more of the tenants
occupying a dwelling located in the city of New York or the commissioner
of the department of the city of New York charged with enforcement of
the housing maintenance code of such city, or in the counties of Nassau,
Suffolk, Rockland and Westchester may maintain a special proceeding as
provided in this article, upon the ground that there exists in such
dwellings or in any part thereof a lack of heat or of running water or
of light or of electricity or of adequate sewage disposal facilities, or
any other condition dangerous to life, health or safety, which has
existed for five days, or an infestation by rodents, or any combination
of such conditions; or course of conduct by the owner or his agents of
harassment, illegal eviction, continued deprivation of services or other
acts dangerous to life, health or safety.
2. If the proceeding is instituted by the commissioner of the
department of the city of New York charged with enforcement of the
housing maintenance code of such city, one-third or more of the tenants
may, at any time thereafter during the pendency of the proceeding or
after final judgment pursuant to section seven hundred seventy-six or
seven hundred seventy-seven of this article, petition for substitution
of themselves in place and stead of such commissioner of such
department. Such substitution shall be ordered by the court unless good
reason to the contrary shall be shown.

S 771. Commencement; notice of petition; time and manner of service.
1. A special proceeding prescribed by this article shall be commenced by
the service of a petition and notice of petition. A notice of petition
may be issued only by a judge or the clerk of the court.
2. The notice of petition shall specify the time and place of the
hearing on the petition and state that if at such time, a defense to
such petition is not interposed and established by the owner or any
mortgagee or lienor of record, a final judgment may be rendered
directing that the rents due on the date of entry of such judgment from
the petitioning tenants and the rents due on the dates of service of
such judgment on all other tenants occupying such dwelling, from such
other tenants, shall be deposited with the administrator appointed
pursuant to section seven hundred seventy-eight of this article, and any
rents to become due in the future from such petitioners and from all
other tenants occupying such dwelling shall be deposited with such
administrator as they fall due; and that such deposited rents shall be
used, subject to the court`s direction, to the extent necessary to
remedy the condition or conditions alleged in the petition.
3. The notice of petition and petition shall be served upon the owner
of such dwelling last registered with the department of housing
preservation and development of such city pursuant to article forty-one
of chapter twenty-six of the administrative code of the city of New York
and in Nassau, Suffolk, Rockland and Westchester counties upon the
person set forth as the owner on the last recorded deed to the rented
property and upon every mortgagee and lienor of record, and upon the
city of New York, at least five days before the time at which the
petition is noticed to be heard.
4. The proof of service shall be filed with the court before which the
petition is to be heard on or before the return date.
5. Manner of service. a. Service of the notice of petition and
petition shall be made by personally delivering them to the person or
persons required to be served pursuant to subdivision three of this
section. Service upon the city of New York shall be made by personal
delivery to the commissioner of the city department charged with
enforcement of the housing maintenance code of such city, or to an agent
duly authorized to accept such service on his behalf. If service cannot
with due diligence be made within the city upon an owner, mortgagee or
lienor of record in such manner, it shall be made:
(1) upon the owner last registered with the department of housing
preservation and development pursuant to article forty-one of chapter
twenty-six of the administrative code of the city of New York and in
Nassau, Suffolk, Rockland and Westchester counties upon the person set
forth as the owner on the last recorded deed to the rented property by
delivering to and leaving personally with the person designated pursuant
to article forty-one of chapter twenty-six of such code as managing
agent of the subject dwelling, and in Nassau, Suffolk, Rockland and
Westchester counties upon the person designated as the managing agent of
the rented property if one shall have been designated, a copy of the
notice of petition and petition;
(2) upon a mortgagee or lienor of record, by registered or certified
mail, return receipt requested, at the address set forth in the recorded
mortgage or lien.
b. If such personal service upon the person designated pursuant to
article forty-one of chapter twenty-six of the administrative code of
the city of New York as managing agent of the subject dwelling and in
Nassau, Suffolk, Rockland and Westchester counties upon the person set
forth as the owner on the last recorded deed to the rented property
cannot be made with due diligence, service upon such last registered
owner shall be made by affixing a copy of the notice and petition upon a
conspicuous part of the subject dwelling; and in addition, within two
days after such affixing, by sending a copy thereof by registered or
certified mail, return receipt requested, to the owner at the last
address registered by him with the department of housing preservation
and development or, in the absence of such registration, to the address
set forth in the last recorded deed with respect to such premises.
6. Notice to non-petitioning tenants. Notice of the proceeding shall
be given to the non-petitioning tenants occupying the dwelling by
affixing a copy of the notice of petition and petition upon a
conspicuous part of the subject dwelling.

S 772. Contents of petition. The petition shall:
1. Allege material facts showing that there exists in such dwelling or
any part thereof one or more of the following: a lack of heat or of
running water or of light or electricity or of adequate sewage disposal
facilities, or any other condition dangerous to life, health or safety,
which has existed for five days, or an infestation of rodents or course
of conduct by the owner or his agents of harassment, illegal eviction,
continued deprivation of services or other acts dangerous to life,
health or safety.
2. If the petitioners shall be tenants occupying the dwelling, they
shall allege the number of petitioners making the petition and that they
constitute one-third or more of the tenants of said dwelling in
occupancy thereof.
3. Allege a brief description of the nature of the work required to
remove or remedy the condition and an estimate as to the cost thereof
except that if the petitioners shall be tenants occupying the dwelling,
the petition may allege the conditions complained of in which event such
description shall not be required to be made by anyone not a party to
the petition.
4. If the petitioners shall be tenants occupying the dwelling, they
shall allege the amount of rent due from each such petitioner, monthly.
5. State the relief sought.

S 773. Answer. At the time when the petition is to be heard, the owner
and any mortgagee or lienor of record, shall answer in writing. If the
notice of petition was served at least eight days before the time at
which it was noticed to be heard and it so demands, the answer shall be
served at least three days before the time the petition is noticed to be
heard and any reply shall be served at least one day before such time.

S 774. Trial. Where triable issues of fact are raised, they shall be
tried by the court without a jury at the time when issue is joined.
However, the court, in its discretion, may grant an adjournment of such
trial at request of either party, if it determines that an adjournment
is necessary to enable either of the parties to procure the necessary
witnesses, or upon consent of all the parties who appear. Such
adjournment shall not be for more than five days except by consent of
all the parties who appear.

S 775. Defenses. It shall be a sufficient defense to the proceeding,
if the owner or any mortgagee or lienor of record establish that:
a. The condition or conditions alleged in the petition did not in fact
exist or that such condition or conditions have been removed or
remedied; or
b. Such condition or conditions has been caused by a petitioning
tenant or tenants or members of the family or families of such
petitioner or petitioners or of their guests or by other residents of
the dwelling or their families or guests; or
c. Any tenant or resident of the dwelling has refused entry to the
owner or his agent to a portion of the premises for the purpose of
correcting such condition or conditions.

S 776. Judgment. The court shall render a final judgment either
a. Dismissing the petition for failure to affirmatively establish the
allegations thereof or because of the affirmative establishment by the
owner or a mortgagee or lienor of record of a defense or defenses
specified in section seven hundred seventy-five of this article; or
b. Directing that (1) the rents due on the date of the entry of such
judgment from the petitioning tenants and the rents due on the dates of
service of the judgment on all other residential and non-residential
tenants occupying such dwelling from such other tenants, shall be
deposited with the administrator appointed by the court, pursuant to
section seven hundred seventy-eight of this article; (2) any rents to
become due in the future from all tenants occupying such dwelling shall
be deposited with such administrator as they fall due; (3) such
deposited rents shall be used, subject to the court`s direction, to the
extent necessary to remedy the condition or conditions alleged in the
petition and (4) upon the completion of such work in accordance with
such judgment, any remaining surplus shall be turned over to the owner,
together with a complete accounting of the rents deposited and the costs
incurred; and granting such other and further relief as to the court may
seem just and proper. A certified copy of such judgment shall be served
personally upon each non-petitioning tenant occupying such dwelling and
upon the city of New York by service as provided in subdivision five of
section seven hundred seventy-one of this article. If personal service
on any such non-petitioning tenant cannot be made with due diligence,
service on such tenant shall be made by affixing a certified copy of
such judgment on the entrance door of such tenant`s apartment, store or
other unit and, in addition, within one day after such affixing, by
sending a certified copy thereof by registered mail, return receipt
requested, to such tenant. Any right of the owner of such dwelling to
collect such rent moneys from any petitioning tenant of such dwelling on
or after the date of entry of such judgment, and from any
non-petitioning tenant of such dwelling on or after the date of service
of such judgment on such non-petitioning tenant as herein provided,
shall be void and unenforceable to the extent that such petitioning or
non-petitioning tenant, as the case may be, has deposited such moneys
with the administrator in accordance with the terms of such judgment,
regardless of whether such right of the owner arises from a lease,
contract, agreement or understanding heretofore or hereafter made or
entered into or arises as a matter of law from the relationship of the
parties or otherwise. It shall be a valid defense in any action or
proceeding against any such tenant to recover possession of real
property for the non-payment of rent or for use or occupation to prove
that the rent alleged to be unpaid was deposited with the administrator
in accordance with the terms of a judgment entered under this section.

S 777. Application by mortgagee or lienor of record or other person
having an interest in the property. a. If, after a trial, the court
shall determine that the facts alleged in the petition have been
affirmatively established by the petitioners, that no defense thereto
specified in section seven hundred seventy-five has been affirmatively
established by the owner or a mortgagee or lienor of record, and that
the facts alleged in the petition warrant the granting of the relief
sought, and if the owner or any mortgagee or lienor of record or other
person having an interest in the property, shall apply to the court to
be permitted to remove or remedy the conditions specified in such
petition and shall (1) demonstrate the ability promptly to undertake the
work required; and (2) post security for the performance thereof within
the time, and in the amount and manner, deemed necessary by the court,
then the court, in lieu of rendering judgment as provided in section
seven hundred seventy-six of this article, may issue an order permitting
such person to perform the work within a time fixed by the court.
b. If, after the issuance of an order pursuant to subdivision a of
this section, but before the time fixed in such order for the completion
of the work prescribed therein, it shall appear to the petitioners that
the person permitted to do the same is not proceeding with due
diligence, the petitions may apply to the court on notice to those
persons who have appeared in the proceeding for a hearing to determine
whether judgment should be rendered immediately as provided in
subdivision c of this section.
c. If, upon a hearing authorized in subdivision b hereof, the court
shall determine that such owner, mortgagee, lienor or other person is
not proceeding with due diligence, or upon the failure of such owner,
mortgagee, lienor or other person to complete the work in accordance
with the provisions of said order, the court shall render a final
judgment appointing an administrator as authorized in section seven
hundred seventy-eight of this article. Such judgment shall direct the
administrator to apply the security posted by such person to the
removing or remedying of the condition or conditions specified in the
petition. In the event that the amount of such security should be
insufficient for such purpose, such judgment shall direct the deposit of
rents with the administrator, as authorized by section seven hundred
seventy-six of this article, to the extent of such deficiency. In the
event that such security should exceed the amount required to remove or
remedy such condition or conditions, such judgment shall direct the
administrator to file with the court, upon completion of the work
prescribed therein, a full accounting of the amount of such security and
the expenditures made pursuant to such judgment, and to turn over such
surplus to the person who posted such security, together with a copy of
such accounting.

S 778. Appointment of administrator. 1. The court is authorized and
empowered, in implementation of a judgment rendered pursuant to section
seven hundred seventy-six or seven hundred seventy-seven of this
article, to appoint a person other than the owner, a mortgagee or
lienor, to receive and administer the rent moneys or security deposited
with him subject to the court`s direction. The court may appoint the
commissioner of the department of the city of New York charged with
enforcement of the housing maintenance code of such city or his designee
as such administrator, provided that he shall consent, in writing, to
such appointment. Any administrator is authorized and empowered in
accordance with the direction of the court, to order the necessary
materials, labor and services to remove or remedy the conditions
specified in the judgment, and to make disbursements in payment thereof;
and to demand, collect and receive the rents from the tenants; and to
institute all necessary legal proceedings including, but not limited to,
summary proceedings for the removal of any tenant or tenants; and to
rent or lease for terms not exceeding three years any part of said
premises, however, the court may direct the administrator to rent or
lease commercial parts of said premises for terms that the court may
approve. In addition, such administrator is authorized and empowered in
accordance with the direction of the court to accept and repay such
moneys as may be received from the department charged with enforcement
of the housing maintenance code of the city of New York for the purpose
of replacing or substantially rehabilitating systems or making other
repairs or capital improvements authorized by the court. All moneys
expended by the department pursuant to the foregoing shall constitute a
debt recoverable from the owner and a lien upon the building and lot,
and upon the rents and other income thereof. Such lien shall be enforced
in accordance with the provisions of article eight of subchapter five of
the housing maintenance code of the city of New York. Such
administrator, shall, upon completion of the work prescribed in such
judgment, file with the court a full accounting of all receipts and
expenditures for such work. Such administrator shall dispose of the
rents and other monies deposited with him according to the following
order of priority:
(a) Payment in full for all of the work specified in the judgment.
Until all of the work specified in the judgment has been completed and
payment for such work has been made, no other disbursements shall be
permitted, except for fuel bills, fire and liability insurance, and
bills for ordinary repairs and maintenance.
(b) Payment of a reasonable amount for the services of such
administrator.
(c) Payment of outstanding real property tax liens claimed by the city
of New York.
(d) Payment of outstanding emergency repair liens filed and recorded
by the city of New York and outstanding liens filed and recorded by the
city pursuant to this section.
(e) Payment to the owner of any surplus remaining after payments of
paragraphs (a) through (d) of this subdivision have been made.
2. Unless the administrator is the city of New York, the court may
allow from the rent moneys or security on deposit a reasonable amount
for services of such administrator.
3. Unless such administrator is the city of New York, the
administrator so appointed shall furnish a bond, the amount and form of
which shall be approved by the court. In its discretion and for good
cause shown, the court may dispense with the necessity for a bond. The
cost of a required bond shall be paid from the moneys so deposited.
4. Such administrator shall file a transcript of the judgment
appointing him with the county clerk within fifteen days of his
appointment.
5. The duties of such administrator shall not be affected by the
appointment of a receiver in an action to foreclose a mortgage on the
premises, except that the rights of the owner, including the right to
any surplus, pursuant to paragraph (e) of subdivision one of this
section, shall pass to the receiver. The court in which the action to
foreclose a mortgage on the premises is pending may appoint such
administrator to serve as receiver in that action in addition to his
duties as administrator pursuant to this article.
6. Such administrator shall be liable only in his official capacity
for injury to persons and property by reason of conditions of the
premises in a case where an owner would have been liable; he shall not
have any liability in his personal capacity.
7. No city or county specified in section seven hundred sixty-nine of
this article shall be liable to any party, including such administrator
or the owner, for injury to persons or property by reason of conditions
of the premises or the acts or omissions of such administrator, except
that when the city of New York is appointed administrator, liability
shall be determined in accordance with subdivision six of this section.
8. The commissioner of the department of the city of New York charged
with the enforcement of the housing maintenance code of such city shall
promulgate rules and regulations regarding criteria for the selection of
administrators to be appointed pursuant to this section and shall
establish and maintain a list of persons approved by such department.
Unless the administrator is the city of New York, any person appointed
as an administrator within such city shall be selected from among the
persons approved as administrators pursuant to such list.
9. Such administrator shall, within thirty days of appointment, file
with the court a plan for the provision of essential services and for
the correction of such other hazardous conditions as may exist at the
premises, specifying dates by which such services shall be provided and
such conditions corrected. If such administrator cannot provide such
services and correct such conditions by the dates specified in the plan,
he shall be required to file with the court an amendment to the plan
setting forth the reasons why such services and corrections could not be
provided by such date and specifying new dates for such services and
corrections. Such plan and any amendments to such plan shall be provided
to the tenants by mail or by posting in a common area of the building
and to the owner of record by mail.
* 10. (a) Where a building for which an administrator has been
appointed pursuant to this section is transferred to a new owner at any
time following the appointment of such administrator, whether or not
such building remains subject to such administrator, the department
charged with enforcement of the housing maintenance code of the city of
New York may enter into a regulatory agreement with such new owner. Such
regulatory agreement may impose such terms and conditions upon the
operation and repair of such building as such department may determine.
Notwithstanding any general, special or local law to the contrary, such
regulatory agreement may provide that, upon transfer of such building to
the new owner, any outstanding liens filed with and recorded by the city
pursuant to this section or pursuant to section three hundred nine of
the multiple dwelling law shall immediately be reduced to zero, provided
that such regulatory agreement shall require, in consideration for such
reduction to zero, the provision of adequate, safe and sanitary housing
accommodations for persons of low income for a period of not less than
thirty years. Any regulatory agreement pursuant to this subdivision
shall include a certification by the new owner of the real property that
(i) the prior owner has no direct or indirect interest in such real
property, and (ii) the prior owner has no direct or indirect interest in
such new owner.
(b) On or about June thirtieth, two thousand three, the city shall
submit a report to the governor, the temporary president of the senate,
the speaker of the assembly, the minority leader of the senate and the
minority leader of the assembly. Such report shall describe the program
activities carried out during the two prior calendar years pursuant to
this subdivision.
* NB Repealed June 30, 2004

S 779. Presentation or settlement of accounts. The court shall
require the keeping of written accounts itemizing the receipts and
expenditures under an order issued pursuant to section seven hundred
seventy-six or seven hundred seventy-seven of this article, which shall
be open to inspection by the owner, any mortgagee or lienor or any other
person having an interest in such receipts or expenditures provided,
however, notwithstanding any other provision of law to the contrary,
such information as may be in the possession of the city of New York
with the department charged with the enforcement of the housing
maintenance code of such city shall be available from such department
for inspection only by the owner, tenant of such property, or person
having a recorded interest in the property. Upon motion of the court or
the administrator or of the owner, any mortgagee or lienor of record or
of any person having an interest, the court may require a presentation
or settlement of the accounts with respect thereto. Notice of a motion
for presentation or settlement of such accounts shall be served on the
owner, any mortgagee or other lienor of record who appeared in the
proceeding and any person having an interest in such receipts or
expenditures.

S 780. Waiver void. Any provision of a lease or other agreement
whereby any provision of this article for the benefit of a tenant,
resident or occupant of a dwelling is waived, shall be deemed against
public policy and shall be void.

S 781. "Owner" defined. As used in this article, the term "owner"
shall mean and include the owner or owners of the freehold of the
premises or lesser estate therein, mortgagee or vendee in possession,
assignee of rents, receiver, executor, trustee, lessee, agent, or any
other person, firm or corporation, directly or indirectly in control of
a dwelling, but shall not include a receiver appointed pursuant to
section three hundred nine of the multiple dwelling law.

S 782. "Dwelling" defined. As used in this article, the term
"dwelling" shall mean any building or structure or portion thereof which
is occupied in whole or in part as the home, residence or sleeping place
of one or more human beings and is either rented, leased, let or hired
out, to be occupied, or is occupied as the residence or home of three or
more families living independently of each other; or is a garden-type
maisonette dwelling project as defined in the multiple dwelling law or
other similar dwellings which in their aggregate are arranged or
designed to provide three or more apartments, have common facilities
such as but not limited to a sewer line, water main, or heating plant
and are operated as a unit under common ownership, notwithstanding that
certificates of occupancy were issued for portions thereof as one or two
family dwellings or that the dwellings are not a multiple dwelling as
defined in the multiple dwelling law.

S 783. Defense of warranty of habitability inapplicable.
Notwithstanding any other provision of law, in any proceeding for the
payment of rent commenced by an administrator appointed pursuant to this
article, the provisions of section two hundred thirty-five-b of the real
property law pertaining to the warranty of habitability shall not be a
defense to such a proceeding for rent which accrues during the period of
time that a judgment or an order pursuant to this article is in effect,
unless the court determines that the conditions upon which such defense
is based were caused by the failure of such administrator to perform his
duties in a reasonable manner.