Elected officials from northeast Queens gathered at Beech Hills Apartments in Douglaston last Thursday to celebrate the signing of the Ground Lease Renewal Bill, a new law that offers co-op owners and prospective buyers greater flexibility.
The bill allows co-op owners to extend or renew their ground leases before expiration, closing a loophole or “technicality” that previously hindered buyers from securing traditional 30-year mortgages in co-op communities.
State Senator Toby Ann Stavisky and Assembly Member Edward Braunstein introduced the legislation earlier in May. Both of them reside in co-op apartments and have frequently spoken about their importance in preserving the middle class. Governor Kathy Hochul signed it into law last month after they successfully pushed the bill through their respective chambers.
“By amending the real property law to extend the renewal period for ground leases, we have preserved the equity of thousands of middle-class co-op homeowners, many of whom reside in Queens,” said Senator Stavisky.
Under this amended law, co-op owners in Clearview Gardens in Whitestone, Beech Hills in Little Neck and Hilltop Village in Jamaica will all experience more financial security. It will be easier for them to sell their apartments if they choose to or simply maintain the value of their homes if they stay.
Assembly Member Edward Braunstein said, “In recent years, potential buyers for several Eastern Queens co-ops have been having trouble obtaining mortgages due to the timing issue created by these land lease renewal clauses.”
U.S. Representatives in Congress Grace Meng and Tom Suozzi joined state officials and the heads of local civic organizations to celebrate the bill’s passage. They say it will benefit thousands of co-op owners across the city, many of whom reside in their Eastern Queens districts.
“Legislation like this may not be thrilling or glamorous, but it does have a real positive impact on co-op owners here in Queens and throughout New York,” said Suozzi, noting that there are over 2,600 co-op shareholders in his congressional district.
He acknowledged that this “technicality” was preventing prospective buyers from securing a 30-year mortgage if they did not have at least 35 years remaining on their ground lease. The only option would be for prospective buyers to settle for shorter leases of 15-20 years, which can be unaffordable.
“I am proud to have worked with Senator Stavisky and the Presidents Co-op and Condo Council to help rectify this problem and provide these homeowners the assurance that their co-op will remain marketable for the foreseeable future,” added Suozzi.
Bob Friedrich, President of Glen Oaks Village Co-op and Co-President of the Presidents Co-op and Condo Council, said that while this is not a “sexy bill,” it will have a real positive impact on co-op owners with ground leases.
“The refusal of ground leaseholders to allow co-ops to execute their pre-existing contractual renewals was spiteful and economically harmful to co-ops by drying up long-term mortgage money,” he added. “This legislation corrects that flaw and sends a powerful message to the malevolent ‘fat cat’ ground leaseholders who by their very actions show little concern for affordable housing in New York.”
