Assemblyman Edward C. Braunstein and State Senator John C. Liu and joined with community and elected leaders to announce that their bill to ensure vital protections for housing cooperative (co-op) shareholders was signed into law by Governor Hochul on December 22, 2021.
The legislation, A.350-C, was drafted in response to the passage of the Housing Stability and Tenant Protection Act of 2019 (HSTPA), a historic piece of legislation that provided much-needed rent reforms across the state of New York. However due to the broad language of HSTPA, many of those new rent reforms also erroneously incorporated co-ops into the law, resulting in unintended and burdensome effects for co-ops, one of New York’s most unique forms of affordable home ownership.
A.350-C gives co-op homeowners the freedom to determine limits on processing fees, credit and background checks, and cost increases for co-op ownership, whereas, under HSTPA, limits on these criteria were predetermined by state law.
“The Housing Stability and Tenant Protection Act inadvertently captured co-ops, causing unintended consequences for NYC co-op boards and shareholders,” Assemblyman Braunstein said. “The Co-Op Clarification Bill acknowledges the unique relationship that co-op boards and corporations have with their shareholders and exempts them from these provisions, protecting shareholders from shouldering the burden when fellow owners fail to meet their financial obligations. I thank Governor Hochul for signing this bill into law.”
“This legislation provides important protections for co-op homeowners from unintended provisions of rent laws passed in 2019,” said Senator Liu. “By implementing this new law, we allow New York City’s cooperatives the freedom to govern themselves independently without weakening the important tenant protections for renters that the Housing and Tenant Protection Act was intended to reform.”
Senator Stavisky said, “The Housing Stability and Tenant Protection Act of 2019 has done wonders in ensuring fairness in the landlord-tenant relationship. However, co-ops and their shareholders share a different relationship. These changes will ensure that co-ops remain an affordable option for middle class housing. I want to thank Governor Hochul for signing this important piece of legislation put forth by Senator Liu and Assemblyman Braunstein.”
Warren Schreiber, Co-president of Presidents Co-op & Condo Council said, “For many middle-income families, co-ops represent the last bastion of affordable housing. 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 along with the pride of ownership.”
Bob Friedrich, President of Glen Oaks Village Co-op said, “The road to hell is paved with great intentions and so was the original Housing Stability and Tenant Protection Act of 2019. Thankfully, the worst parts of this legislation have now been repealed and we are thankful for the Governor's signature. Probably the most onerous provision was the limit on security deposits to 1 month’s rent. This meant individuals seeking to move into a co-op who are retired, have limited income or borderline financials could not do so. An act meant to help them, hurt them instead. With the new change in the law, an individual could put up escrow-security, giving the co-op confidence that future maintenance payments would be made. The signing of this bill will help families achieve quality of life living.”