Enacts the "fairness in cooperative homeownership act"; regulates the submission and determinations of applications for ownership of cooperative apartments.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1778A Revised 4/27/2023
SPONSOR: Lavine (MS) TITLE OF BILL:
An act to amend the real property law, in relation to the timing of
decisions for the sales of cooperative apartments
PURPOSE OR GENERAL IDEA OF BILL:
This bill would ensure that the process of purchasing cooperative hous-
ing is fair and transparent by adding uniformity and predictability to
the application process.
SUMMARY OF PROVISIONS:
Section one provides the legislative intent of the bill.
Section two adds a new article 11 to the Real Property Law. The new
article 11 establishes definitions, requires that the board of directors
or managing agent of each cooperative corporation shall maintain a
standardized application and list of requirements for all cooperative
apartments subject to the by-laws or proprietary lease of such corpo-
ration, and establishes a process for prospective purchasers to submit
an application, and for cooperative corporations to acknowledge receipt.
and to notify the prospective purchaser whether the application is
complete. Article 11 also requires that the cooperative corporation
notify an applicant whether consent to a sale is granted or denied with-
in 45 days, providing the reason for denial if the application is
denied, and establishes the tolling of time, Which provides for a longer
timeframe for coop board response during summer months as boards often
meet less frequently during this time.
Section three sets forth the effective date.
JUSTIFICATION:
Residential cooperative purchasers are subject to processes and condi-
tions that do not also apply to purchasers of other single-family resi-
dences. These processes and conditions have the potential to be misused
against a purchaser of cooperative housing. Because New York State
strongly opposes all illegal discrimination and promotes fair housing
laws and regulations, it is essential that the process for purchasing a
cooperative dwelling include the additional safeguards of this bill.
PRIOR LEGISLATIVE HISTORY:
2021-22 S2846 (Kavanagh) / A5856 (Lavine) - judiciary/housing
2019-20: S4677 (Kavanagh) / A6194 (Lavine) - judiciary/housing
2018: S7523 (Hannon)/A10084 (Lavine) - Referred to Judiciary/Referred to
Housing
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None to the state.
EFFECTIVE DATE:
This act shall take effect 120 days after it becomes law and shall apply
to applications submitted and received on or after such date, provided
that the Commissioner of the New York State Division of Human Rights may
take any actions necessary prior to such effective date for the imple-
mentation of this act, including but not limited to establishing guide-
lines and promulgating rules.
STATE OF NEW YORK
________________________________________________________________________
1778--A
2023-2024 Regular Sessions
IN ASSEMBLY
January 20, 2023
___________
Introduced by M. of A. LAVINE, HUNTER, STECK, STIRPE, JEAN-PIERRE,
JACOBSON, JONES, DeSTEFANO, DiPIETRO, BRABENEC, BURDICK, STERN --
Multi-Sponsored by -- M. of A. FITZPATRICK -- read once and referred
to the Committee on Housing -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the real property law, in relation to the timing of
decisions for the sales of cooperative apartments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings. The legislature hereby finds and
2 declares that residential cooperative purchasers are subject to proc-
3 esses and conditions that do not also apply to the purchases of other
4 single-family residences. The provisions of this act are not intended
5 and do not diminish the duty of cooperative boards to uphold their
6 established fiduciary duties. It is the intent of this act to signif-
7 icantly improve the transparency of the cooperative purchase process to
8 the benefit of all parties involved in the transaction.
9 § 2. The real property law is amended by adding a new article 11 to
10 read as follows:
11 ARTICLE 11
12 COOPERATIVE CORPORATIONS; TIMING OF DECISIONS
13 Section 360. Short title.
14 361. Definitions.
15 362. Requirements for determination.
16 363. Acknowledgement of receipt of application.
17 364. Time for determination.
18 365. Tolling of time.
19 366. Construction.
20 § 360. Short title. This article shall be known and may be cited as
21 the "fairness in cooperative homeownership act".
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02825-03-3
A. 1778--A 2
1 § 361. Definitions. As used in this article, unless the context other-
2 wise requires:
3 1. "Application" means the set of documents utilized by a cooperative
4 corporation to facilitate a prospective purchaser's acquisition of
5 certificates of stock, a proprietary lease, or other evidence of an
6 ownership interest in such cooperative corporation.
7 2. "Cooperative corporation" means any corporation governed by the
8 requirements of the state cooperative corporation law or the general
9 business law, which among other things, grants persons the right to
10 reside in a cooperative apartment, that right existing by such person's
11 ownership of certificates of stock, proprietary lease, or other evidence
12 of ownership of an interest in such entity.
13 3. "Proprietary lease" means the lease or occupancy agreement by which
14 a cooperative corporation permits a person to occupy an apartment in the
15 premises owned by the cooperative corporation.
16 4. "Prospective purchaser" means a person who has entered into a
17 contract of sale to purchase the proprietary lease and the ownership
18 interest in a cooperative corporation from a prospective seller.
19 5. "Prospective seller" means a person who has a proprietary lease and
20 an ownership interest in a cooperative corporation and who has entered
21 into a contract of sale to sell the person's proprietary lease and
22 ownership interest in a cooperative corporation to a prospective
23 purchaser.
24 6. "Sale" means the transfer of a person's ownership interest in a
25 cooperative corporation and that person's proprietary lease to another
26 person.
27 § 362. Requirements for determination. 1. The board of directors or
28 managing agent of each cooperative corporation shall maintain a stand-
29 ardized application and list of requirements for all cooperative apart-
30 ments subject to the by-laws or proprietary lease of such corporation.
31 2. The board of directors or managing agent of every cooperative
32 corporation shall provide the corporation's standardized application and
33 list of requirements to any prospective purchasers and prospective sell-
34 ers, or their respective real estate agents, promptly upon request, and
35 shall include instructions as to where and how to submit the required
36 materials including the mailing address and designated email address for
37 the cooperative corporation.
38 § 363. Acknowledgement of receipt of application. 1. A prospective
39 purchaser shall submit an application via registered mail, and such
40 application shall include a mailing address and email address. Within
41 ten business days of receiving an application from a prospective
42 purchaser, a cooperative corporation shall provide to a prospective
43 purchaser via electronic mail and registered mail a written acknowledg-
44 ment of the receipt of such application. Electronic mail delivery shall
45 serve as an additional notice, but shall not replace the requirement for
46 delivery by registered mail. The requirements of this subdivision shall
47 apply both to a prospective purchaser's initial submission and to any
48 subsequent submissions the prospective purchaser may make.
49 2. An acknowledgement of receipt shall set forth with specificity
50 whether the application submitted fully satisfies the requirements
51 therefor and list of the requirements provided for in section three
52 hundred sixty-two of this article, the way or ways the submitted appli-
53 cation failed to comply with the cooperative corporation's list of
54 requirements maintained and provided by the cooperative corporation
55 pursuant to such section, and if additional materials are requested for
A. 1778--A 3
1 clarification of a previously submitted application, what materials are
2 desired.
3 3. Failure by a cooperative corporation to provide a written acknowl-
4 edgement pursuant to this section within ten business days from the date
5 of receipt of the submission of an application shall result in the
6 application being deemed to be complete.
7 § 364. Time for determination. 1. Following the submission of a
8 completed application containing the information and documents contained
9 in the list required to be maintained and provided pursuant to section
10 three hundred sixty-two of this article and any additional materials
11 requested for clarification, a cooperative corporation shall inform a
12 prospective purchaser whether its consent to a sale is granted or wheth-
13 er its consent to a sale is denied within forty-five days.
14 2. The time period provided in subdivision one of this section may be
15 extended at any time with the consent of the prospective purchaser. The
16 cooperative corporation shall be entitled to one fourteen day extension
17 without the consent of the purchaser after sending notice to the
18 prospective purchaser via registered mail within forty-five days of
19 receiving a completed application.
20 3. If after the forty-five day period for determination and any appli-
21 cable extensions, the cooperative corporation does not act on an appli-
22 cation, a prospective purchaser may inform the board of such corporation
23 that if no action is taken within ten days then the failure to act will
24 constitute consent by the cooperative corporation to the sale.
25 4. If no action is taken following the ten day notice period pursuant
26 to subdivision three of this section, the cooperative corporation shall
27 be deemed to have consented to the sale.
28 5. Nothing in this section shall be construed to prohibit a cooper-
29 ative corporation from lawfully denying its consent to a sale at any
30 time prior to the expiration of the forty-five day determination period
31 and ten day notice period, provided that notice is given to the prospec-
32 tive purchaser stating the reason for denial.
33 § 365. Tolling of time. If a cooperative corporation's board of direc-
34 tors has placed a memorandum or other writing in its files stating that
35 such board does not ordinarily meet in the months of July and August,
36 then such board of directors or managing agent shall have sixty calendar
37 days or until the tenth of September, whichever is later, after receiv-
38 ing an application to acknowledge receipt thereof and begin the determi-
39 nation process for any application received on or after July first but
40 before September tenth of any calendar year.
41 § 366. Construction. Nothing in this article shall be construed or
42 interpreted to limit or restrict the rights and remedies granted by any
43 other provision of law.
44 § 3. This act shall take effect on the one hundred twentieth day after
45 it shall have become a law and shall apply to applications submitted and
46 received on or after such date. Effective immediately the state commis-
47 sioner of human rights is authorized to take any actions necessary prior
48 to such effective date for the implementation of the provisions of this
49 act on its effective date including, but not limited to, establishing
50 guidelines and promulgating rules.
