N.Y. Private Housing Finance Law Section 31
Rentals and selection of tenants


1.

(a) A company may, with the approval of the commissioner or the supervising agency, as the case may be, fix maximum rentals per room to be charged tenants of the dwellings, the average of the rentals for the dwellings in any project not to exceed the maximum average rentals determined by the commissioner or the supervising agency, as the case may be, before any commitments are made by the company for the construction of the project. The commissioner or the supervising agency, upon his or its own motion, or upon application by the company or of a stockholder, lienholder, a creditor, or of holders of at least ten per centum of the bonds of the company, or by the federal government where the mortgage loan of the company is insured or held by the federal government, may vary such rental rate from time to time so as to secure, together with all other income of the company, sufficient income for it to meet within reasonable limits all necessary payments to be made or projected to be made during the term of a lease by the said company, of all expenses including fixed charges, sinking funds, reserves and dividends on outstanding stock as authorized by the commissioner or the supervising agency, as the case may be. Letting, subletting or assignment of leases of apartments at greater rentals than those approved by the commissioner or the supervising agency shall be unlawful. Where the mortgage loan of a company is insured or held by the federal government or where a project is owned by the federal government, rental rates shall be varied without regard to the provisions of any general, special or local law which would otherwise limit or control such rental rates or the determination or variation thereof for so long as such mortgage loan remains outstanding or the project financed by such a mortgage loan is owned by the federal government. No variation of a rental rate in a project financed by a mortgage loan insured or held by, or owned by the federal government shall be effective unless approved by the federal government.

(b)

Unless any applicable regulation of or regulatory agreement with the federal government shall otherwise provide, (i) the tenants in a project financed by a mortgage loan insured or held by the federal government shall be entitled and may elect to enter in a lease for a term of up to three years at such rental rates as may be established by the commissioner or the supervising agency, as the case may be, pursuant to paragraph (a) of subdivision one of this section, (ii) the rental rates to be charged under any such lease shall be established after consideration of the term of such lease and may differ from the rental rates to be charged under any other lease of a different term and (iii) the commissioner or the supervising agency, as the case may be, shall in establishing such rental rates consider the obligations of the company under any instruments evidencing or securing any residual indebtedness. Such leases shall contain a provision authorizing the variation of the rental rates during the term of such leases upon an application made by the federal government pursuant to paragraph (a) of subdivision one of this section. * (c) A company may, with the approval of the commissioner or the supervising agency, as the case may be, fix maximum charges to be paid by each occupant for the non-housekeeping accommodations, aged care accommodations or non-housekeeping accommodations for handicapped persons, which charges may include payment for board and such other services as may be provided as an incident to occupancy, the average of such charges for all the non-housekeeping accommodations, aged care accommodations or non-housekeeping accommodations for handicapped persons in any project not to exceed the maximum average charges for all such non-housekeeping accommodations, aged care accommodations or non-housekeeping accommodations for handicapped persons determined by the commissioner or the supervising agency as the case may be, before any commitments are made by the company for the construction of the project. The commissioner or the supervising agency upon his or its own motion, or upon application by the company or of a stockholder, lien holder, a creditor or of holders of at least ten (10%) per centum of the bonds of the company, may vary such charges from time to time so as to secure, together with all other income of the company, sufficient income for it to meet within reasonable limits all necessary payments to be made by said company, of all expenses including fixed charges, sinking funds, reserves and dividends on outstanding stock as authorized by the commissioner or supervising agency as the case may be. It shall be unlawful to make non-housekeeping accommodations, aged care accommodations or non-housekeeping accommodations for handicapped persons available at greater charges than those approved by the commissioner or the supervising agency. * NB There are 2 (c)’s * (c) Disclosure of bases. The commissioner, administrator or supervising agency, as the case may be, shall make available for inspection and copying by the residents in any affected development, all items and data and recommendations utilized as the various bases for the decision on increases in rental or carrying charges, upon notification of the decision to the applicant of the action taken. * NB There are 2 (c)’s 2.

(a)

The dwelling or non-housekeeping accommodations without board in a company project shall be available for persons or families of low income whose probable aggregate annual income at the time of admission and during the period of occupancy does not exceed, the greater of (i) the median income for such persons or families for the metropolitan statistical area in which the project is located, or if a project is located outside a metropolitan statistical area, the median income for such persons or families for the county in which the project is located, as most recently determined by the United States department of housing and urban development, in which case any person or family becoming eligible for admission pursuant to this subparagraph shall pay, from the time of admission, a rental surcharge as provided for in subdivision three of this section, computed on the basis of the income limitations applicable to such persons or families in the absence of this subparagraph, or

(ii)

eight times the rental, including the value or cost to them of heat, light, water and cooking fuel, of the dwellings that may be furnished to such persons or families, except that in the case of families with three or more dependents, such ratio shall not exceed nine to one. Persons or families with two or less dependents eligible for admission or continued occupancy pursuant to subparagraph (ii) of this paragraph or subparagraph (ii) of this paragraph prior to the effective date of a chapter of the laws of two thousand nineteen that amended subparagraph (ii) of this paragraph, shall pay a rental surcharge computed on the basis of an income limitation of seven times the rental and families with three or more dependents eligible for admission or continued occupancy pursuant to subparagraph (ii) of this paragraph or subparagraph (ii) of this paragraph prior to the effective date of a chapter of the laws of two thousand nineteen that amended subparagraph (ii) of this paragraph, shall pay a rental surcharge computed on the basis of an income limitation of eight times the cost of the rental, including in each instance the value or cost to the persons or families of heat, light, water and cooking fuel, of the dwellings furnished to such persons or families. The “probable aggregate annual income” in the case of dwelling accommodations means the annual income of the chief wage earner of the family, plus all other income of other members of the family over the age of twenty-one years, plus a proportion of income of gainfully employed members under the age of twenty-one years, the proportion to be determined by the company as approved by the commissioner or the supervising agency, as the case may be, excluding therefrom a deduction of fifteen thousand dollars from the income of secondary wage earners of the family or a larger deduction if approved by the commissioner or the supervising agency, as the case may be, except that the company, as approved by the commissioner or the supervising agency, as the case may be, may exclude a proportion of the income of other members of the family over the age of twenty-one years for the purpose of determining eligibility for admission or continued occupancy, or for establishing the rental of such family, or for all such purposes; in the case of such non-housekeeping accommodations it means the annual income of the occupant, provided that the commissioner or supervising agency, as the case may be, may make rules and regulations relative to the allocation of the income of a family among the members thereof for the purpose of determining the income attributable to such occupant.

(b)

For the purpose of determining maximum income to establish eligibility for admission or continued occupancy of, or the imposition of surcharges upon, tenant-cooperators in a mutual company project, or for all such purposes, there may be added to the total annual carrying charges an amount equal to six per centum of the investment of a person or family in the equity obligations of such housing company and, where not included in the carrying charges payable to such company, the value or cost to them of heat, light, water and cooking fuel and, to the extent authorized by the commissioner or the supervising agency as the case may be, the value or cost to them of repainting and replacement of fixtures and appliances.

(c)

The non-housekeeping accommodations with board in a company project including non-housekeeping accommodations with board designed for the occupancy of handicapped persons shall be available for persons of low income whose probable aggregate annual income at the time of admission and during the period of occupancy does not exceed four times the annual charges to be paid by such persons and in the case of aged care accommodations two times the annual charges to be paid by such persons. The “probable aggregate annual income” means the annual income of the person occupying such non-housekeeping accommodations, aged care accommodations or non-housekeeping accommodations for handicapped persons, provided that the commissioner or supervising agency, as the case may be, may make rules and regulations relating to the allocation of the income of a family among the members thereof for the purpose of determining the income attributable to such occupant.

(d)

A company may, with the approval of the commissioner or the supervising agency, as the case may be, lease dwellings in a project to an authority, at rentals fixed for such dwellings pursuant to the provisions of subdivision one of this section less an appropriate adjustment for the increased tax exemption, if any, attributable to such dwellings pursuant to subdivision three of § 33 (Tax exemptions)section thirty-three of this chapter, for occupancy by persons and families of low income who are eligible and pay rents therefor pursuant to the provisions of the public housing law.

(e)

Notwithstanding the provisions of this subdivision, families whose probable aggregate annual income does not exceed one hundred twenty-five percent of the limitations as to income as determined pursuant to paragraphs (a) and (b) of this subdivision, shall also be eligible for admission to the dwelling or non-housekeeping accommodations without board of a project on the understanding that any family becoming eligible for admission by reason hereof shall pay, from the time of admission, a rental surcharge as provided for in subdivision three of this section, computed on the basis of the income limitations applicable to such family in the absence of this subdivision. In applying the provisions of subdivision three of this section to a family becoming eligible by reason of this section, the maximum income prescribed by law for admission or occupancy shall for all purposes be computed without reference to this paragraph. 2-a. Notwithstanding any other provision of law, the commissioner or supervising agency shall authorize and make provision in rules and regulations for an immediate downward adjustment in surcharge upon a showing of substantial decrease in income caused by events including, but not limited to death, disability or illness.

3.

In the event that the income of a person or family in occupancy should increase and exceed the maximum prescribed by law for admission or for continued occupancy, based on the latest existing rent, by more than twenty-five per centum, such person or family shall be subject to removal from the dwelling, non-housekeeping, aged care accommodations or non-housekeeping accommodations for handicapped persons provided, however, that such person or family may be permitted to remain in occupancy until such income exceeds the maximum prescribed by law by more than fifty per centum, if the company, with the approval of the commissioner or the supervising agency, shall determine that removal would cause hardship to such person or family. Any person or family in occupancy whose income exceeds the maximum prescribed by law shall pay a rental surcharge in accordance with a schedule of surcharges to be promulgated by the company with the approval of the commissioner or the supervising agency, as the case may be, provided, however, such rental surcharge shall in no event exceed fifty per centum of the existing rent.

4.

Twenty-five per cent of rental surcharges collected pursuant to this section on account of rentals payable prior to July first, nineteen hundred eighty-one shall be paid by the company to the municipality which has granted tax exemption pursuant to § 33 (Tax exemptions)section thirty-three of this article as a credit against the grant of tax exemption, the value of such tax exemption and of such credit to be determined on an individual dwelling, non-housekeeping, aged care accommodation or non-housekeeping accommodations for handicapped persons unit basis. In the event that such tax exemption has not been granted, or in the event that a sum equal to the total of all accrued taxes as to individual dwelling, non-housekeeping, aged care accommodation or non-housekeeping accommodations for handicapped persons units where such tax exemption was granted have been paid to the municipality, the excess if any, of surcharges and all surcharges imposed after June thirtieth, nineteen hundred eighty-one shall be applied to the expenses of operation and management as approved by the commissioner or the supervising agency.

5.

Notwithstanding the provisions of this section or of any other general, special or local law, persons or families living in a project under a lease for ninety-nine years renewable, or in perpetuity, or by reason of ownership of stock in such company may, with the approval of the commissioner or of the supervising agency, as the case may be, be permitted to remain in occupancy for not more than three years after such increase in income exceeds the maximum prescribed by law by more than fifty per centum unless such occupancy is extended with the approval of the commissioner or of the supervising agency, as the case may be. Any such occupant required to remove from the project because of excessive income as herein provided shall be discharged from liability on any note, bond or other evidence of indebtedness relating thereto and shall be reimbursed for all sums paid by such occupant to the company on account of the purchase of stock or income debentures as a condition of such occupancy.

6.

Preference in admission to a project shall be given to families displaced by a limited-profit housing project.

7.

Preference in admission to a project with an open waiting list, as determined by the commissioner or the supervising agency, shall be given by a mutual company or an urban rental company or by the New York state housing finance agency when subleasing dwellings in projects of such companies pursuant to § 44-A (Low rent dwelling accommodations)section forty-four-a of this chapter, to persons or surviving spouses of persons who are veterans as such term is defined pursuant to Civil Service Law § 85 (Additional credit allowed veterans in competitive examinations)section eighty-five of the civil service law. The number of persons given preference as a veteran or a surviving spouse of a veteran shall be published adjacent to the application to be on such waiting list. For projects with a closed list, as determined by the commissioner or the supervising agency, such preference shall be given upon the opening of the waiting list. Notwithstanding the foregoing, persons who are residing in a limited-profit housing project shall be given first priority for an internal transfer in the project in which they are residing in accordance with rules and regulations promulgated by the commissioner or the supervising agency. 7-b. Preference in admission to projects located in a city with a population of one hundred thousand or more shall be given to members of a police force of such city, provided such members otherwise qualify for admission and provided, further, that such city has adopted a local law authorizing such program.

8.

Preference in admission to any project or to such portion of any project which has been specifically designed for occupancy by aged or handicapped persons, as the case may be, shall be given to such persons. 8-a. A company may rent one or more dwelling units to a social services official or duly authorized agency, as defined in Social Services Law § 371 (Definitions Unless the context or the subject matter manifestly requires a different interpretation, when used in this article or in any ...)section three hundred seventy-one of the social services law, for the operation of agency boarding homes or group homes or to any public agency as defined in General Municipal Law § 461 (Definitions)section four hundred sixty-one of the general municipal law which provides residences and social services to dependent aged persons.

9.

(a) For the purpose of enabling lower income elderly persons to continue in occupancy without paying rentals in excess of a fair proportion of their income, any municipality having a population of less than one million is authorized to make and to contract to make periodic payments to a company in an amount not exceeding the difference between the rent or carrying charges for the dwellings occupied by such lower income persons and one-third of their net probable aggregate annual income, where such rent or carrying charges exceed such one-third of income; provided that the aggregate amount of periodic payments to be made in accordance with contracts entered into by the municipality during any fiscal year thereof pursuant to this subdivision, subdivision seven of section eighty-five-a, section one hundred twenty-six and section five hundred seventy-seven-a of this chapter shall not exceed the aggregate amount of all real property taxes paid or payable during such fiscal year by all companies organized pursuant to this article, article IV, article V, and article XI of this chapter and the aggregate estimated receipts of all such companies in such fiscal year from rental surcharges collected or to be collected pursuant to this chapter.

(b)

Such payments shall be made only on account of a person or family in occupancy where the head of the household is sixty-two years of age or older and is not a recipient of public assistance pursuant to the social services law, and where the net probable aggregate annual income of the person or family in occupancy does not exceed six thousand five hundred dollars a year. Notwithstanding the provisions of subdivision twenty-nine of § 2 (Definitions)section two of this chapter, net probable aggregate annual income as used in this subdivision shall mean annual income of family members from all sources after deduction of federal, state and city income taxes; provided that any municipality may provide that increases in benefits under the social security act which take effect after such person or family has assumed occupancy shall not be taken into account.

(c)

A company having a contract with the municipality pursuant to this subdivision may not collect from persons or families in occupancy on whose account such payments are made any rentals in excess of the amounts specified in such contract.

10.

A housing company shall accept federal reimbursement under section eight of the Housing and Community Development Act of 1974 in lieu of such amount in rent payment for a person qualifying under such act and residing in a project of such company. A housing company shall not reject an applicant for an apartment solely on the basis that all or part of the rent shall be paid under section eight of the Housing and Community Development Act of 1974.

11.

Every company subject to the provisions of this article shall on a form prescribed by the commissioner or supervising agency annually certify to such commissioner or supervising agency that all necessary steps are being undertaken to ensure that all surcharges due pursuant to this section are being properly billed, collected and remitted.

12.

All municipally-aided projects shall post the first and last names of all persons on each waiting list maintained by such project, in chronological order, by such project’s management office, or, if there is no management office on the site of such municipally-aided project, in such project’s lobby.

13.

The commissioner or supervising agency shall develop a written procedure with regard to how applications for admission to a company are processed and numbered, and how tenants are selected. Such procedure shall be implemented and followed by all limited-profit housing companies subject to the provisions of this article; provided, however, that any limited-profit housing company may elect additional procedures so long as such procedures are not inconsistent with the procedures developed by the commissioner or supervising agency and any other requirements set forth in this article.

14.

The commissioner or supervising agency shall develop a procedure whereby applicants are notified in the case that their application is rejected by a limited-profit housing company subject to the provisions of this article, and such procedure shall also include the appeal’s process available to the rejected applicant. The notification that shall be sent to the applicant shall be in written form, include reasons why the applicant was rejected, the appeal’s process, and be sent to the applicant within sixty days after the limited-profit housing company decided to reject such applicant. Any limited-profit housing company may elect additional procedures so long as such procedures are not inconsistent with the procedures developed by the commissioner or supervising agency and any other requirements set forth in this article. For purposes of this subdivision, an applicant shall not be deemed rejected if their application is still active on the limited-profit housing company’s waiting list and such waiting list is still open and accepting applications.

15.

The commissioner or the supervising agency shall develop and require the use of a publicly available electronic automated system for limited-profit housing companies to store, process, and maintain applications and waiting lists. Waiting lists maintained by each such company shall use a method that protects any personally identifiable information of applicants from being publicly disclosed or accessible to the public. Such electronic automated system shall also include general information about each company, including, but not limited to: the name and address of the company; the management office and address; the number and size of all units in each building; and information on the status of each waiting list, including whether the limited-profit housing company is currently accepting applications and how long applicants may have to wait.

Source: Section 31 — Rentals and selection of tenants, https://www.­nysenate.­gov/legislation/laws/PVH/31 (updated May 10, 2024; accessed Jul. 13, 2024).

10
Short title
11
Policy and purposes of article
11‑A
Additional policy and purposes of article
12
Definitions
13
Limited-profit housing companies
13‑A
The applicability of not-for-profit corporation law
13‑B
Verification of papers filed with supervising agency
13‑C
Voting, election and referendum procedures
14
Consent of commissioner to incorporation
15
Participation by certain corporations and individuals
16
Limited-profit housing companies
17
Powers
18
Designation of and service of process on secretary of state and registered agent
19
Consideration for issuance of stock, bonds or income debentures
20
Mortgages, mortgage bonds and notes
21
Capital structure
22
State loans
22‑A
Redevelopment loans
22‑B
Loans for state-aided limited-profit housing companies
23
Municipal loans and municipally aided projects
23‑A
Mortgage modifications, evidence of pre-existing indebtedness
23‑B
Participation in loan or investment
23‑C
Mortgage modifications
24
Income debentures
25
Working capital
26
Conditions and security for loans
26‑A
Findings for municipally-aided projects
26‑B
Special provisions with respect to state urban development corporation projects
26‑C
Special provisions with respect to Battery Park city projects
27
Limitations
28
Payments from earnings
29
Acquisition of property
30
Transfer of real property
31
Rentals and selection of tenants
31‑A
Resale price of shares
31‑B
Assignment or pledge of tenant cooperator’s shares
31‑C
Tenant-cooperators
32
Supervision and regulation
32‑A
Additional supervision and regulation
32‑B
Annual reports
33
Tax exemptions
34
Foreclosure and judgments
35
Voluntary dissolution
35‑A
Requirements regarding dissolution
36
Sale of project prior to termination of tax exemption
36‑A
Additional powers of municipalities
37
Separability clause

Accessed:
Jul. 13, 2024

Last modified:
May 10, 2024

§ 31’s source at nysenate​.gov

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