Northeast Queens lawmakers and community leaders recently celebrated the signing of legislation that provides vital protections for co-op shareholders.
The Co-Op Clarification Bill (S5105C /A350C) was signed into law by Governor Kathy Hochul on Dec. 22. Created in response to unintended burdens for co-op owners that came about from the Housing Stability and Tenant Protection Act in 2019, the new legislation allows co-op owners to set their own processing fee limits, credit and background checks and cost increases for co-op ownership, which used to have predetermined limits under the state law.
“This legislation provides important protections for co-op homeowners from unintended provisions of rent laws passed in 2019,” said Senator John 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.”
HSTPA is widely considered a historic piece of legislation that extended protections for renters in traditional landlord-tenant relationships and created other long-awaited rent reforms across New York State. But its broad language erroneously incorporated co-ops into the law, resulting in conflicts with proprietary leases and increased costs of cooperative management.
“The Housing Stability and Tenant Protection Act inadvertently captured co-ops, causing unintended consequences for NYC co-op boards and shareholders,” Assemblyman Edward 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.”
The Co-Op Clarification Bill is sponsored by Senator John Liu and Assemblyman Edward Braunstein and officially passed in both the Senate and Assembly on June 10, 2021.
“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,” said Warren Schreiber, co-president of Presidents Co-op & Condo Council.