N.Y. Real Property Actions & Proceedings Law § 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 such owner, mortgagee or lienor, 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 the commissioner's designee as such administrator, provided that the commissioner or the commissioner's designee 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 managing the premises, 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 such administrator according to the following order of priority:
1. (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.
2. (b) Payment of a reasonable amount for the services of such administrator, including reimbursement of any legal fees incurred by such administrator in connection with management of the building.
3. (c) Payment of outstanding real property tax liens claimed by the city of New York.
4. (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.
5. (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 or her 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 or she shall not have any liability in his or her personal capacity. Appointment of an administrator pursuant to subdivision one of this section shall not relieve an owner of liability for injury to persons and property in such case.
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 nine and for every three years thereafter for as long as the program continues to be in effect, 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. Each report following the initial report shall describe the program activities carried out during the three prior calendar years pursuant to this subdivision. * NB Repealed June 30, 2018
11. The court may only discharge an administrator if the owner has paid in full or entered into a payment agreement to pay in full all outstanding real property tax liens claimed by the city of New York, all outstanding emergency repair liens filed and recorded by the city of New York, all outstanding charges and liens assessed in connection to the alternative enforcement program authorized by section 27-2153 of the administrative code of the city of New York, and outstanding liens filed and recorded by the city pursuant to this section. The provisions of this subdivision shall not apply to buildings transferred pursuant to subdivision ten of this section.