New York's Cooperative and Condominium Community
Gov. Kathy Hochul has signed a law that will make it easier for owners of small rental buildings — those with five or fewer units — to convert such properties to a cooperative or condominium. Under the Housing Stability and Tenant Protection Act of 2019, at least 51% of residents had to approve a conversion; now that threshold has been reduced to 15%.
"Albany lawmakers and the governor recognize that building owners are chafing against the restrictions in their ability to convert buildings to condominium or cooperative ownership due to the HSTPA," Erica Buckley, a partner at the law firm Nixon Peabody, writes in the firm's newsletter. "By enacting this law, the legislature and governor have demonstrated a (limited) willingness to unburden small-building owners of those restrictions."
The law is the result of two bills introduced by Democratic legislators from Brooklyn.
“The previous law posed too many restrictions on apartment dwellers and owners of three-to-five family buildings,” Assemblyman Simcha Eichenstein, who sponsored the bill with state Sen. Andrew Gounardes, tells the website BoroPark24. “As a result, it became extremely difficult for such buildings to convert to a condominium and for individual apartments to be bought and sold. In my district and elsewhere, this new legislation will create new opportunities for hard-working New Yorkers to buy or sell their homes more easily. It’s a win-win for everyone involved.”
The new law could soon be followed by others. As Buckley writes: "Nixon Peabody expects the action in the next legislative session to further loosen restrictions on certain building conversions. One extensive piece of legislation sponsored last session by Sen. Cordell Cleare and Assembly member Harvey Epstein is now being refined for reintroduction in the new legislative session... That bill, A9340/S8334, would permit a small class of mixed-income buildings whose regulatory agreements with city and state agencies are soon expiring to convert the market-rate units to condominium ownership with just 15% of market-rate tenants or outside bona fide purchasers contracting for a unit... This change would also come at a time when for-sale housing stock is at an all-time low, and budget woes will only grow worse in the face of reduced transfer tax revenue."
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