A New Year’s Gift to Co-Op BoardsJanuary 5, 2022
You may recall that in 2019 the New York State Legislature blindsided residential landlords, including cooperative boards, with the “Housing Stability Tenant Protection Act,” which imposed crippling restrictions on the operations of cooperative apartment corporations.
On December 22, 2021, Governor Hochul signed into law a series of amendments to this legislation which exempt co-ops (other than those organized under the Private Housing Finance Law, such as Mitchell-Lamas, mutual development housing and the like) from some of the most onerous aspects of the 2019 statute.
Governor Hochul’s revisions allow, subject to prevailing proprietary lease restrictions in any given co-op, exempted co-op corporations to:
- Require escrow deposits from owner-occupant purchasers for more than one-month’s maintenance as a condition of approval of purchase applications. Previously, escrows and other types of security deposits in excess of one-month’s maintenance were prohibited.
- To collect late fees up to 8% of maintenance. Previously, late charges in excess of $50 or 5%, whichever is less, were prohibited.
- To charge fees in connection with processing sales and sublet applications. Such fees were previously prohibited.
- To charge the actual cost of conducting background checks. Previously, charges in excess of $20 were prohibited.
- To collect additional rent and fees in Summary Proceedings against defaulting tenants rather than having to initiate a separate, costly and time-consuming Proceeding to collect these fees, as was previously required.
- To send Notices of non-payment to delinquent shareholders by methods other than certified mail. Previously the burdensome method of certified mail service was mandated.
- Seek reimbursement of legal fees in connection with obtaining a default judgment against delinquent shareholders, which was previously prohibited.
Herrick welcomes your inquiries as to how these beneficial changes in the law apply to your cooperative.
For more information on condominium and cooperative law matters, please contact:
Bruce A. Cholst at +1 212 592 1621 or [email protected]
Andrew B. Freedland at +1 212 592 1623 or [email protected]
Peter I. Livingston at +1 212 592 1625 or [email protected]
Karol S. Robinson at +1 212 592 1624 or [email protected]
Philip Tucker at +1 212 592 1482 or [email protected]
Andrew J. Wagner at +1 212 592 1622 or [email protected]
Devin W. Ness at +1 212 592 1627 or [email protected]
@ 2022 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.