The Rules Keep Changing for Co-op and Condo Boards

For co-op and condo boards, the rules keep changing in the middle of the game. In just this past year, the state Legislature and New York City Council passed major legislation affecting everything from tenant protections to shareholder meetings, reverse mortgages, housing discrimination, prevailing wages for staff, climate change, city construction codes, energy efficiency, interim certificates of occupancy and lead paint. The list goes on and on.

And it promises to keep growing. We know that the state and local authorities have been actively considering additional legislation on, among other things, expanded gas-piping inspections, new restrictions on gas installations, co-op budgeting requirements and co-op purchaser applications, not to mention the possibility of additional legislation relating to the ongoing COVID-19 pandemic.

This recent flurry of legislative activism follows a pair of monumental changes to how co-op and condo boards conduct business: first was the Housing Stability and Tenant Protection Act of 2019, which rewrote the rules governing landlord-tenant relationships; then came the sweeping Climate Mobilization Act, which will require many boards to cut their buildings’ carbon emissions or face stiff fines.

If it were only the volume of new legislation that were the issue, that would be one thing. But the added difficulty for co-op and condo boards is that it’s often unclear how — or even if — the new rules apply to them.

For example, the Tenant Protection Act mandated major changes to the laws governing landlords and tenants. But, as all readers of this magazine understand, the relationship between a co-op board and its tenant-shareholders is much different from that between a landlord and a rental tenant, even if both technically involve a “landlord-tenant relationship.” However, the Tenant Protection Act as originally drafted made no attempt to distinguish the unique features of cooperative housing. Thus, for the last two years, co-op boards have had to try their best to comply, even though many of the required changes as applied to co-ops made little practical sense.

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Co-op and condominium advocacy groups have had to become more organized with legislators. In the case of the Tenant Protection Act, proposed legislation to exclude co-ops from the new requirements was circulated within weeks of the law’s passage. Industry groups pursued this amendment through successive legislative sessions and a change in administration, and their diligence was finally rewarded at the end of 2021 when Gov. Kathy Hochul signed an amendment to the Tenant Protection Act that carves co-ops out of many of its most onerous — and unintended — provisions.

Advocates have claimed additional recent victories, including avoiding a proposed ban on criminal background checks on buyers or renters, as well as obtaining additional time to comply with the gas piping inspections mandated by Local Law 152.

For co-op and condo board members, participating in this sort of grass-roots activism may be more rewarding — and have a more tangible benefit for their buildings — than the often mundane responsibilities of administering a tightly stretched budget with few discretionary funds. Board members with the time and inclination should consider participating in legislative outreach to better protect the interests of their buildings and the co-op and condominium community at large.

William D. McCracken is a partner at the law firm Ganfer Shore Leeds & Zauderer.