A01778 Summary:

COSPNSRHunter, Steck, Stirpe, Jean-Pierre, Jacobson, Jones, DeStefano, DiPietro, Brabenec, Burdick, Stern, Santabarbara, Bendett, Glick, Beephan, Lemondes, Gallahan, Cunningham, Kelles
Add Art 11 360 - 366, RP L
Enacts the "fairness in cooperative homeownership act"; regulates the submission and determinations of applications for ownership of cooperative apartments.
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A01778 Actions:

01/20/2023referred to housing
04/27/2023amend and recommit to housing
04/27/2023print number 1778a
01/03/2024referred to housing
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A01778 Committee Votes:

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A01778 Memo:

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.
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A01778 Text:

                STATE OF NEW YORK
                               2023-2024 Regular Sessions
                   IN ASSEMBLY
                                    January 20, 2023
        Introduced  by  M.  of  A.  LAVINE,  HUNTER, STECK, STIRPE, JEAN-PIERRE,
          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
    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.

        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.
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