Bill Morris in Board Operations on December 27, 2021
In a resounding year-end triumph for co-op advocates, Gov. Kathy Hochul has signed a bill that exempts co-op boards from the strictures of the 2019 Housing Stability and Tenant Protection Act. The law was widely condemned for inadvertently lumping co-op boards with commercial landlords because of the “tenant-landlord” relationship that exists in housing cooperatives.
“This is very good news for the co-op community,” says Geoffrey Mazel, a partner at the law firm Hankin & Mazel and the legal counsel for the Presidents Co-op & Condo Council, one of nine organizations that wrote to the governor in September beseeching her to sign the bill. Mazel continues, “This bill corrects the mistakes the Legislature made. After long hard battles with legislators, we got traction and worked on compromise language — and wound up getting 90% of what we wanted. It’s been a sensational year.”
As a result of the governor signing a bill that had broad support in both houses of the state Legislature, co-op boards can once again collect more than one month’s maintenance as security deposit. Previously, co-ops were prevented from having purchasers with marginal financial profiles from putting several months of maintenance in an escrow account — a restriction that blocked the approval of many applicants. (Rental landlords are still limited to collecting one month’s rent as a security deposit.)
Additionally, the carve out removes the $50 cap on late fees and frees co-op boards to impose late fees equal to 8% of the monthly maintenance. The $20 cap on application fees has also been removed, freeing boards to charge appropriate fees for running background, credit and criminal history checks, as well as fees paid to transfer agents. Boards can now collect legal fees, late fees and other charges in Housing Court.
In addition to the Presidents Council, the following groups signed the letter to Gov. Hochul urging her to sign the bill: the Association of Riverdale Cooperatives & Condominiums; the Cooperatives and Condominiums Advisory Council of Westchester; the Council of New York Cooperatives & Condominiums; the Federation of New York Housing Cooperatives; the New York Association of Realty Managers; the Queens County Bar Association; the Real Estate Board of New York; and the Urban Homesteading Assistance Board.
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