Requires the board of directors of a cooperative apartment corporation to notify applicants seeking to purchase shares of the corporation of the reason or reasons the board of directors has refused such request.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1064
SPONSOR: Bichotte Hermelyn TITLE OF BILL:
An act to amend the general business law, in relation to requiring the
board of directors of a cooperative apartment corporation to notify
applicants seeking to purchase shares of the corporation of the reason
or reasons the board of directors has refused such request
PURPOSE OR GENERAL IDEA OF BILL:
general business law, in relation of a cooperative apartment corpoto
purchase shares of the corpoboard of directors has refused such The
purpose of this bill is to ensure the applicants seeking to purchase
shares of a cooperative corporation receive a reason or reasons for the
refusal of their request.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends the general business law by adding a new section 352-m
regarding the denial of right to purchase shares of a cooperative corpo-
ration.
Section 2 is the effective date.
JUSTIFICATION:
Current procedure only requires the board of directors of a cooperative
apartment corporation to notify applicants seeking to purchase shares of
said corporation of their refusal. This bill would make it so the board
must indicate the reasoning behind their decision in a timely manner.
In 40 West 67th Street v. Pullman, the Court of Appeals held that the
Board of a cooperative apartment buildings can evict tenants, without
the need to comply with the RPAPL which requires a landlord to institute
eviction proceedings to evict a tenant, and prove objectionable conduct
by competent evidence in court. The Court held that the Board could
reach its decisions based upon its own procedure/process, and that
courts must defer to the Cooperative's judgment unless tenants can show
that the decision was a result of illegality or bad faith.
Under state law, landlords are generally required to go to court for
evictions based on "objectionable" conduct by residents. The Court,
however, exempted Cooperatives, holding that the cooperative apartment's
relationship with its apartment owners is different from that of a land-
lord and tenant and that the Cooperative did not need to go to court and
prove its case to evict shareholders. The Court found that in a cooper-
ative building where members have agreed, residents can be evicted for
objectionable" conduct and the building's findings will generally be
taken as sufficient evidence to justify the eviction.
One attorney who represents Board of cooperative of apartment buildings
has said: "This case allows a board of directors or shareholders to
evict someone from their building without a, trial." These cases are
often based on greed, self-interest or an improper agenda as opposed to
being legitimate.
The solution to this problem lies within the amendment of RRAPI,§ 711 to
define "tenant" as including a shareholder in Cooperative Apartment
Building.
PRIOR LEGISLATIVE HISTORY:
2021-22: A07773; Referred to housing
2019-20: A7512; referred to housing
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
1064
2023-2024 Regular Sessions
IN ASSEMBLY
January 13, 2023
___________
Introduced by M. of A. BICHOTTE HERMELYN, DURSO, GLICK, EPSTEIN, RIVERA,
TAYLOR, JOYNER, SIMON -- read once and referred to the Committee on
Housing
AN ACT to amend the general business law, in relation to requiring the
board of directors of a cooperative apartment corporation to notify
applicants seeking to purchase shares of the corporation of the reason
or reasons the board of directors has refused such request
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new section
2 352-m to read as follows:
3 § 352-m. Denial of right to purchase shares of a cooperative corpo-
4 ration. In the event that the board of directors of a cooperative corpo-
5 ration denies the request of an applicant to purchase shares of such
6 corporation allotted to a particular dwelling unit, the board of direc-
7 tors shall notify such applicant in writing of the reason or reasons the
8 board of directors has denied the request to purchase the shares. Such
9 notification shall be provided to the applicant within thirty days of
10 the board's decision to deny the applicant's request to purchase the
11 shares.
12 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01170-01-3
