City Council Enhances HPD's Ability to Recoup Relocation Expenses

On Aug. 14, 2019, the City Council passed Intro 30-A, which gives HPD liens a stronger position. It establishes that outstanding charges resulting from relocation expenses incurred by HPD following the issuance of certain vacate orders constitute a tax lien on a property. In other words, after HPD issues an order to vacate the premises, the subsequent costs to relocate the displaced tenant will now be considered high-status tax liens on the property. The law is intended to discourage the negligence of building owners and give HPD greater ability to recover the relocation expenses of those tenants who were forced to vacate. These liens will have priority over all other liens and encumbrances on the building and lot except for other tax liens and assessments.

The bill was originally introduced by Councilmember Margaret Chin on Jan. 31, 2018, because HPD often has difficulty receiving reimbursement from owners when tenants are displaced and relocated as a result of vacate orders issued by the department. These expenses include all departmental costs, expenses incurred by providing temporary housing such as hotels or motels, and any other reasonable allowances related to moving. These vacate orders are often a result of negligent and willful misconduct of the landlords. By giving the vacate orders priority, the bill is designed to encourage landlords to remedy conditions in a more timely fashion.

During the public hearing of the Committee on Housing and Buildings, the Real Estate Board of New York (REBNY) expressed concern over the scope of Intro 30-A. REBNY pointed out that vacate orders may be issued for a number of reasons unrelated to tenant harassment, such major storm damage or fire. Responding to concern, the Council amended the bill by specifying that liens would result only from negligent or intentional acts of the owner.

The legislation was passed unanimously by the City Council. The bill has since been sent to the mayor and awaits approval. This law will go into effect two years after it becomes law.