As many know, on June 14, 2019, then Governor Andrew Cuomo signed into law a massive overhaul of landlord-tenant laws throughout the State of New York, known as The Housing Stability Tenant Protection Act (HSTPA). Among other things, these new laws made rent regulation – rent control, rent stabilization, and the Emergency Tenant Protection Act of 1974 – permanent. Unfortunately, the way the new law was written, many of the provisions applied to cooperatives in addition to the intended audience: rental tenants.
On December 22, 2021, Governor Kathy Hochul signed the amendments to the HSTPA into law, finally relieving cooperatives from the onerous restrictions of the HSTPA. Under the new law, co-ops are no longer subject to restrictions that, among other things:
- Limited security deposits or maintenance escrows to one month’s rent or maintenance (now co-ops can, for example, condition their approval of a purchase application on the posting of a maintenance escrow, in an amount of their discretion);
- Limited late fees to the lesser of $50.00 or 5% of the outstanding payment (an 8% cap is now imposed, subject to the proprietary lease or occupancy agreement);
- Prohibited application and/or processing fees and credit report and/or background search fees in excess of $20.00;
- Prohibited a co-op board from seeking late fees, penalties, assessments and/or other charges (including legal fees) in any non-payment proceeding brought by the co-op corporation;
- Prohibited a co-op board from seeking legal fees in connection with a default judgment against a delinquent shareholder; and
- Prohibited a co-op board from sending a notice of maintenance default through any method other than certified mail (co-ops can now use any method authorized by the proprietary lease or occupancy agreement).
The full text of the amendment can be found at: https://legislation.nysenate.gov/pdf/bills/2021/S5105C