BRI News

New York Housing Co-ops Cheer New Law Clarifying Obligations Under the Housing Stability and Tenant Protection Act

FOR IMMEDIATE RELEASE
December 23, 2021
Contact:
Mary Ann Rothman
CNYC Executive Director
212 496-7400
Rothman@CNYC.coop

New York Housing Co-ops Cheer New Law Clarifying Obligations Under the Housing Stability and Tenant Protection Act

NEW YORK, NY – Organizations representing housing cooperatives across New York State and other associations that support co-ops and their shareholders applauded the news that Governor Kathy Hochul had signed A. 350-C (Braunstein) / S. 5105-C (Liu) into law. The law – which passed nearly unanimously in the Assembly and Senate earlier this year – corrects an unintended error in the 2019 Housing Stability and Tenant Protection Act of 2019 (HSTPA) which conflated “commercial landlords” with cooperative boards.

“CNYC is very pleased that the legislature and the governor have recognized that co-ops need to be treated differently from rentals, and hopes that this trend will continue in future legislation,” said Marc Luxemburg, president of the Council of New York Cooperatives & Condominiums (CNYC).

“This important legislation will protect and increase access to affordable homeownership for hundreds of thousands of New Yorkers. We applaud Governor Hochul for signing the bill and Senator Liu and Assemblymember Braunstein for sponsoring it at such a critical time for co-op shareholders throughout the City,” said REBNY President James Whelan. “This collaborative effort is a prime example of how a broad array of stakeholders can work together to advance commonsense solutions to New York’s housing policy challenges.”

When HSTPA became law in 2019, it contained a number of provisions that were designed to protect tenants’ rights in a normal landlord-tenant relationship, but which were misapplied to shareholders within a cooperative. Shareholders pay maintenance fees and other charges to their co-op and are not commonly thought of as “rent”, since they are in all respects owners and not renters, owning shares in the co-op itself. Since cooperatives are mutually owned and operated on a non-for-profit, “break even” basis, these additional requirements and limitations were already beginning to hamper some co-ops ability to function efficiently and have adversely affected their operating budgets, reducing the quality of life for residents.

“The New York City Bar Association applauds Governor Hochul’s signing of the Braunstein/Liu bill, which corrects an error in the Housing Stability and Tenant Protection Act of 2019 that has burdened the effective operation of housing cooperatives by treating them as if they were for-profit rental buildings, rather than as entities owned by and for their residents,” commented

Margery N. Weinstein, Chair of the Cooperative and Condominium Law Committee of the New York City Bar Association, an organization which urged swift passage of the legislation.

“We are pleased that our elected state officials, in enacting this legislation to reverse unintended consequences of HSTPA, recognize that shareholder residents of co-operatives are owners, not renters, and that co-operatives are a unique form of affordable home ownership, whose integrity merits protection,” said Jane Curtis, Chair of the Cooperative & Condominium Advisory Council of Westchester and past board member at Vernon Woods Apartments in Mount Vernon.

Prior to HSTPA, cooperatives could admit more financially marginal applicants by asking for escrows, which the co-op relied on to protect itself if these new shareholders could not meet their monthly maintenance obligations. In a co-op, when one shareholder fails to pay their maintenance, the burden falls on all other shareholders to make up that revenue. Under HSTPA, escrow and any prepayment is limited to one month’s rent. Without the co-ops ability to protect itself from new shareholders with marginal financials, they had little choice but to reject these applicants. The bill similarly restores the ability of cooperatives to charge application fees, late fees, attorney fees, etc. so that these costs do not fall on the backs of families in the co-op. With the bill’s signing, all of those tools will once again available to mitigate financial risk to the non-profit co-op and its shareholders.

“Cooperatives are operated on a non-for-profit basis and provide affordable housing for hundreds of thousands of New Yorkers,” said Bob Friedrich, Co-Pres of Presidents Co-op & Condo Council (PCCC) and President of Glen Oaks Village Co-op in Queens. “Under HSTPA and without the clarifying language offered by this bill, co-ops faced new expenses and restrictions that would have negatively impacted those who the bill was meant to protect.”

“For many middle-income families, co-ops represent the last bastion of affordable housing,” said Warren Schreiber, Co-President, Presidents Co-op & Condo Council and President, Bay Terrace Cooperative Section I, Inc. in Queens. “Exempting co-ops from Part M of HSTPA is a significant step toward preserving the cooperative housing stock. Prospective shareholders will once again be able to enjoy the benefits of well-maintained housing and the pride of ownership.”

“Cooperative housing serves a wide swath of economic levels in New York State,” said Greg Carlson, executive director of the Federation of New York Housing Cooperatives & Condominiums (FNYHC) and, president of the New York Association of Realty Managers (NYARM) and NYARM’s Executive Director, Margie Russell. “It is a valuable lifestyle that allows for building shareholders to have a voice in the performance of their property. Thank you to our NYS elected officials for exempting co-ops from Part M of HSTPA. This act helps preserve the satisfying experience that coop living has to offer.”

This bill makes it clear that cooperatives are not rental housing, and the provisions of HSTPA relating to a true landlord/tenant relationship ought not to apply. Importantly, the new law is limited and only applies to cooperatives in their dealings with their shareholders; it does not limit any HSTPA protections to subtenants residing under conventional leases.

This new law took effect immediately upon the Governor’s signing it into law.

-30-



Send me an email when this page has been updated!

Name*