SIGNIFICANT VICTORY FOR COOPERATIVES AS NY LEGISLATURE EXEMPTS COOPS FROM KEY PROVISIONS OF HSTPA
Cooperatives finally got long-awaited clarification from the New York State legislature on various sections of the Housing Stability and Tenant Protection Act of 2019 (the “HSTPA”). The HSTPA, meant to provide safeguards for tenants, created a number of unintended effects for cooperative boards. On June 10, 2021, the New York State legislature finally clarified that the inclusion of cooperatives in the tenant-protective provisions of the HSTPA was inadvertent. While the legislation still needs to be signed by the Governor, it is expected to be signed upon delivery to the Governor’s desk.
The new legislation provides that:
- Cooperatives will no longer be restricted to requiring just one month’s maintenance for security deposits, but can once again require maintenance escrow deposits and lump sum maintenance prepayments as conditions for approving purchasers;
- Cooperatives will not be limited to 5% maintenance increases;
- Cooperative application and processing fees are no longer capped at $20;
- HSTPA caps penalties for late rent or maintenance payments at $50 or 5% of the monthly maintenance or rent (whichever is less); under the newly passed legislation, the cap will be raised to 8%, with no dollar limit;
- Cooperatives are no longer limited to seeking only maintenance and assessments in Housing Court proceedings but can, as prior to the HSTPA, pursue late fees, attorneys’ fees, and other charges in addition to maintenance and assessments;
- Rent Demands to Cooperative shareholders can now be sent in the manner prescribed by the proprietary lease, and not only by certified mail, as required by the HSTPA.
Please contact DNCT if you would like to discuss the particulars of the legislation.
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