Bill Text: NY A06194 | 2019-2020 | General Assembly | Introduced


Bill Title: Enacts the "fairness in cooperative homeownership act"; regulates the submission and determinations of applications for ownership of cooperative apartments.

Spectrum: Slight Partisan Bill (Democrat 11-5)

Status: (Introduced) 2019-03-04 - referred to housing [A06194 Detail]

Download: New_York-2019-A06194-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          6194
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                      March 4, 2019
                                       ___________
        Introduced  by  M.  of  A.  LAVINE,  CUSICK,  HUNTER,  PICHARDO,  STECK,
          JEAN-PIERRE -- Multi-Sponsored by -- M. of A. FITZPATRICK -- read once
          and referred to the Committee on Housing
        AN ACT to amend the real property law, in  relation  to  the  timing  of
          decisions for the sales of cooperative apartments
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Legislative findings.  The  legislature  hereby  finds  and
     2  declares  that  residential  cooperative purchasers are subject to proc-
     3  esses and conditions that do not also apply to the  purchases  of  other
     4  single-family  residences.  The  provisions of this act are not intended
     5  and do not diminish the duty  of  cooperative  boards  to  uphold  their
     6  established  fiduciary  duties.  It is the intent of this act to signif-
     7  icantly improve the transparency of the cooperative purchase process  to
     8  the benefit of all parties involved in the transaction.
     9    §  2.  The  real property law is amended by adding a new article 11 to
    10  read as follows:
    11                                 ARTICLE 11
    12                COOPERATIVE CORPORATIONS; TIMING OF DECISIONS
    13  Section 360. Short title.
    14          361. Definitions.
    15          362. Requirements for determination.
    16          363. Acknowledgement of receipt of application.
    17          364. Time for determination.
    18          365. Tolling of time.
    19          366. Construction.
    20    § 360. Short title. This article shall be known and may  be  cited  as
    21  the "fairness in cooperative homeownership act".
    22    § 361. Definitions. As used in this article, unless the context other-
    23  wise requires:
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04610-01-9

        A. 6194                             2
     1    1.  "Application" means the set of documents utilized by a cooperative
     2  corporation to  facilitate  a  prospective  purchaser's  acquisition  of
     3  certificates  of  stock,  a  proprietary  lease, or other evidence of an
     4  ownership interest in such cooperative corporation.
     5    2.  "Cooperative  corporation"  means  any corporation governed by the
     6  requirements of the state cooperative corporation  law  or  the  general
     7  business  law,  which  among  other  things, grants persons the right to
     8  reside in a cooperative apartment, that right existing by such  person's
     9  ownership of certificates of stock, proprietary lease, or other evidence
    10  of ownership of an interest in such entity.
    11    3. "Proprietary lease" means the lease or occupancy agreement by which
    12  a cooperative corporation permits a person to occupy an apartment in the
    13  premises owned by the cooperative corporation.
    14    4.  "Prospective  purchaser"  means  a  person  who has entered into a
    15  contract of sale to purchase the proprietary  lease  and  the  ownership
    16  interest in a cooperative corporation from a prospective seller.
    17    5. "Prospective seller" means a person who has a proprietary lease and
    18  an  ownership  interest in a cooperative corporation and who has entered
    19  into a contract of sale to  sell  the  person's  proprietary  lease  and
    20  ownership  interest  in  a  cooperative  corporation  to  a  prospective
    21  purchaser.
    22    6. "Sale" means the transfer of a person's  ownership  interest  in  a
    23  cooperative  corporation  and that person's proprietary lease to another
    24  person.
    25    § 362. Requirements for determination. 1. The board  of  directors  or
    26  managing  agent  of each cooperative corporation shall maintain a stand-
    27  ardized application and list of requirements for all cooperative  apart-
    28  ments subject to the by-laws or proprietary lease of such corporation.
    29    2.  The  board  of  directors  or  managing agent of every cooperative
    30  corporation shall provide the corporation's standardized application and
    31  list of requirements to any prospective purchasers and prospective sell-
    32  ers, or their respective real estate agents, promptly upon request,  and
    33  shall  include  instructions  as to where and how to submit the required
    34  materials including the mailing address and designated email address for
    35  the cooperative corporation.
    36    § 363. Acknowledgement of receipt of  application.  1.  A  prospective
    37  purchaser  shall  submit  an  application  via registered mail, and such
    38  application shall include a mailing address and  email  address.  Within
    39  ten  business  days  of  receiving  an  application  from  a prospective
    40  purchaser, a cooperative corporation  shall  provide  to  a  prospective
    41  purchaser  via electronic mail and registered mail a written acknowledg-
    42  ment of the receipt of such application. Electronic mail delivery  shall
    43  serve as an additional notice, but shall not replace the requirement for
    44  delivery  by registered mail. The requirements of this subdivision shall
    45  apply both to a prospective purchaser's initial submission  and  to  any
    46  subsequent submissions the prospective purchaser may make.
    47    2.  An  acknowledgement  of  receipt  shall set forth with specificity
    48  whether the  application  submitted  fully  satisfies  the  requirements
    49  therefor  and  list  of  the  requirements provided for in section three
    50  hundred sixty-two of this article, the way or ways the submitted  appli-
    51  cation  failed  to  comply  with  the  cooperative corporation's list of
    52  requirements maintained and  provided  by  the  cooperative  corporation
    53  pursuant  to such section, and if additional materials are requested for
    54  clarification of a previously submitted application, what materials  are
    55  desired.

        A. 6194                             3
     1    3.  Failure by a cooperative corporation to provide a written acknowl-
     2  edgement pursuant to this section within ten business days from the date
     3  of receipt of the submission of  an  application  shall  result  in  the
     4  application being deemed to be complete.
     5    §  364.  Time  for  determination.  1.  Following  the submission of a
     6  completed application containing the information and documents contained
     7  in the list required to be maintained and provided pursuant  to  section
     8  three  hundred  sixty-two  of  this article and any additional materials
     9  requested for clarification, a cooperative corporation  shall  inform  a
    10  prospective purchaser whether its consent to a sale is granted or wheth-
    11  er its consent to a sale is denied within forty-five days.
    12    2.  The time period provided in subdivision one of this section may be
    13  extended at any time with the consent of the prospective purchaser.  The
    14  cooperative  corporation shall be entitled to one fourteen day extension
    15  without the consent  of  the  purchaser  after  sending  notice  to  the
    16  prospective  purchaser  via  registered  mail  within forty-five days of
    17  receiving a completed application.
    18    3. If after the forty-five day period for determination and any appli-
    19  cable extensions, the cooperative corporation does not act on an  appli-
    20  cation, a prospective purchaser may inform the board of such corporation
    21  that  if no action is taken within ten days then the failure to act will
    22  constitute consent by the cooperative corporation to the sale.
    23    4. If no action is taken following the ten day notice period  pursuant
    24  to  subdivision three of this section, the cooperative corporation shall
    25  be deemed to have consented to the sale.
    26    5. Nothing in this section shall be construed to  prohibit  a  cooper-
    27  ative  corporation  from  lawfully  denying its consent to a sale at any
    28  time prior to the expiration of the forty-five day determination  period
    29  and ten day notice period.
    30    § 365. Tolling of time. If a cooperative corporation's board of direc-
    31  tors  has placed a memorandum or other writing in its files stating that
    32  such board does not ordinarily meet in the months of  July  and  August,
    33  then such board of directors or managing agent shall have sixty calendar
    34  days  or until the tenth of September, whichever is later, after receiv-
    35  ing an application to acknowledge receipt thereof and begin the determi-
    36  nation process for any application received on or after July  first  but
    37  before September tenth of any calendar year.
    38    §  366.  Construction.  Nothing  in this article shall be construed or
    39  interpreted to limit or restrict the rights and remedies granted by  any
    40  other provision of law.
    41    § 3. This act shall take effect on the one hundred twentieth day after
    42  it shall have become a law and shall apply to applications submitted and
    43  received  on or after such date; provided, however, that effective imme-
    44  diately the state commissioner of human rights is authorized to take any
    45  actions necessary prior to such effective date for the implementation of
    46  the provisions of this act on its  effective  date  including,  but  not
    47  limited to, establishing guidelines and promulgating rules.
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