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A05841 Summary:

BILL NOA05841
 
SAME ASNo Same As
 
SPONSORWeprin
 
COSPNSR
 
MLTSPNSR
 
Amd §352-eeee, Gen Bus L
 
Provides that a plan may not be declared effective for conversion to cooperative or condominium ownership until written purchase agreements have been executed and delivered for at least twenty-five percent of all dwelling units in the building or group of buildings and written consent has been obtained from the bona fide tenants who were in occupancy of fifty-one percent of the dwelling units in the building or group of buildings or development on the date a letter was issued by the attorney general accepting the plan for filing.
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A05841 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5841
 
SPONSOR: Weprin
  TITLE OF BILL: An act to amend the general business law, in relation to the conversion of certain real property to cooperative or condominium ownership in the city of New York   PURPOSE OR GENERAL IDEA OF BILL: This legislation would permit occupied buildings to convert to cooper- ative or condominium ownership upon purchase agreements being executed and delivered by twenty-five percent of the bona fide tenants in occu- pancy and written consent obtained from fifty-one percent of bona fide tenants in occupancy.   SUMMARY OF PROVISIONS: Section 1: Amends section 352-eeee of the general business law by providing that for a Non-eviction plan for an occupied building , a plan may not be declared effective for conversion to cooperative or condomin- ium ownership until written purchase agreements have been executed and delivered for at least twenty-five percent of all dwelling units in the building or group of buildings or development by bona fide tenants in occupancy on the date a letter was issued by the attorney general accepting the plan for filing and written consent obtained by the bona fide tenants in occupancy of fifty-percent of the dwelling units in the building or group of buildings or development on the date a letter was issued by the attorney general accepting the plan for filing. Section 2: Amends section 352-eeee of the general business law by providing that for a Non-eviction plan for an occupied building, the offering plan may not be declared effective until written purchase agreements have been executed and delivered for at least twenty-five percent of all dwelling units in the building or group of buildings or development by bona fide tenants in occupancy on the date a letter was issued by the attorney general accepting the plan for filing and written consent obtained by the bona fide tenants in occupancy of fifty-one percent to the dwelling units in the building or group of buildings or development on the date a letter was issued by the attorney general accepting the plan for filing. Section 3: Provides an effective date.   JUSTIFICATION: In June 2019, Section 352-eeee of the General Business Law was amended to provide that in New York City, an occupied multi-family rental build- ing could not be converted into a cooperative or condominium unless fifty-one percent (51%) of the apartments were entered into contract by tenants who were occupying the building at the time that the offering plan was accepted. Unfortunately, the amendment to the law has severely impacted the real estate market in New York City with regard these buildings. There have been no cooperative or condominium conversions in New York City since the amendment of this law went into effect on June 16, 2019 because it is virtually impossible to obtain purchase agreements from fifty-one percent of the tenants in occupancy. Previously, these conversions added a very important option to real property ownership in New York City. These conversions would enable the owner of a building to sell apartments to the tenants or the public, and the tenants or the public would purchase these apartments. This created an affordable home ownership option for purchasers since the prices for these apartments would usually be significantly less than the prices for single family homes. At the same time, tenants who purchased apartments were able to stay in their homes that many were living in for many years prior. This resulted in a win-win situation for all persons involved. This legislation will reduce the amount of apartments required to have entered into contract for a conversion from 51% to 25% of the tenants in occupancy at the time that the plan is accepted provided that 51% of the tenants in occupancy execute a consent to the conversion of the building to a cooperative or condominium. This will result and benefit to everyone involved: Tenants in occupancy will be able to purchase their apartment at an affordable price; the owners of the building, in contemplation of the sales, will improve the conditions of the buildings to get more sales; and the conversion of rental buildings to a cooperative or condominium building will increase the property taxes and income, and the sales of the units will generate transfer taxes which will benefit both New York City and New York State. Amending the law has no detriment to tenants or owners. Since the law would require written consent from tenants in occupancy of fifty-one percent of the units, a majority of the tenants in the building would have to approve this change before any sales could take place. In addi- tion, at least twenty-five percent of the units in the condominium would thereafter be owned by former tenants. These tenants would then have more say over how the building is operating, as unit owners and the building would be maintained at a higher level by the new owners.   PRIOR LEGISLATIVE HISTORY: New Bill   FISCAL IMPLICATIONS: The conversion of a rental building to a cooperative or condominium building will increase the property taxes and income and the sales of the units will generate transfer taxes which will both New York City and New York State.   EFFECTIVE DATE: This act shall take effect immediately.
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A05841 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5841
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 24, 2025
                                       ___________
 
        Introduced by M. of A. WEPRIN -- read once and referred to the Committee
          on Housing
 
        AN  ACT to amend the general business law, in relation to the conversion
          of certain real property to cooperative or  condominium  ownership  in
          the city of New York
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraph (b) of subdivision 1 of section 352-eeee  of  the
     2  general  business law, as amended by chapter 696 of the laws of 2022, is
     3  amended to read as follows:
     4    (b) "Non-eviction plan". A plan which may not  be  declared  effective
     5  until  written  purchase agreements have been executed and delivered for
     6  at least [fifty-one] twenty-five percent of all dwelling  units  in  the
     7  building  or  group of buildings or development by bona fide tenants who
     8  were in occupancy on the date a letter was issued by the attorney gener-
     9  al accepting the plan for filing and written consent have been  obtained
    10  from the bona fide tenants who were in occupancy of fifty-one percent of
    11  the  dwelling units in the building or group of buildings or development
    12  on the date a letter was issued by the attorney  general  accepting  the
    13  plan  for filing; provided, however, that for a building containing five
    14  or fewer units, and where the sponsor of the offering  plan  offers  the
    15  unit  that  they  or  their  immediate family member has occupied for at
    16  least two years, the plan may not be effective  until  written  purchase
    17  agreements have been executed and delivered for at least fifteen percent
    18  of  all  dwelling  units  in  the  building  subscribed for by bona fide
    19  tenants in occupancy or bona fide purchasers  who  represent  that  they
    20  intend that they or one or more members of their immediate family occupy
    21  the  dwelling  unit when it becomes vacant. The purchase agreement shall
    22  be executed and delivered pursuant to an offering  made  in  good  faith
    23  without  fraud and discriminatory repurchase agreements or other discri-
    24  minatory inducements.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07834-01-5

        A. 5841                             2
 
     1    § 2. Clause 1 of subparagraph (i) of paragraph (c) of subdivision 2 of
     2  section 352-eeee of the general business law, as amended by chapter  696
     3  of the laws of 2022, is amended to read as follows:
     4    (1)  Subject to the provisions of clause two of this subparagraph, the
     5  plan may not be declared effective  until  written  purchase  agreements
     6  have  been  executed  and delivered for at least [fifty-one] twenty-five
     7  percent of all dwelling units in the building or group of  buildings  or
     8  development subscribed for by bona fide tenants in occupancy on the date
     9  a  letter  was  issued  by  the  attorney general accepting the plan for
    10  filing and written consent have been obtained from the bona fide tenants
    11  who were in occupancy of fifty-one percent of the dwelling units in  the
    12  building  or  group of buildings or development on the date a letter was
    13  issued by the attorney general accepting the plan for filing  for  which
    14  purchase agreement shall be executed and delivered pursuant to an offer-
    15  ing made without discriminatory repurchase agreements or other discrimi-
    16  natory inducements.
    17    § 3. This act shall take effect immediately.
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