We are pleased to inform you that last week, New York State Governor Kathy Hochul signed S-5105(C), the “carve-out” for Co-ops to most of the provisions of the so-called Tenant Protection Act. In June 2019, New York State passed a sweeping reform of landlord/tenant laws called the Housing Stability and Tenant Protection Act ("HSTPA").
The blanket reforms of the HSTPA included New York Cooperative apartments since Co-Op apartments create a landlord/tenant relationship by virtue of the proprietary lease between the Cooperative Corporation (landlord) and Shareholder (tenant). The inclusion in Co-ops was clearly inadvertent and the amendment to exclude Co-ops was a long time in the making.
Under S-5105(C), which was passed by the New York State Assembly and Senate on June 10th and signed by Governor Kathy Hochul, Co-Ops now have been carved out of certain requirements of the HSTPA as follows:
- Co-Ops may collect more than one month's maintenance as security (protection previously available to Co-Op's for purchasers who may not have the strongest financials when applying for their Co-Op board approval). However, all other landlords may still not collect more than one month's rent as a security deposit.
- Co-Ops may charge up to 8% of the monthly maintenance as a late fee. Previously late fees were capped at $50 and is still capped at $50 for all other landlords.
- Co-Ops may charge fees for conducting a background and credit check as well as processing fees by a managing agent/transfer agent, while all other landlords have application fees which are capped at $20.
Full text of the legislation link here.
If you have any questions regarding this legislation or any other legal matter feel free to contact us.
