The New York Housing Stability and Tenant Protection Act (NYHSTPA) of 2019, signed into law on June 14th has negative consequences for cooperatives and in some instances condominiums.
Application or processing fees are no longer permitted under the Act. Condominiums can no longer collect a fee for processing an application regarding the condominium’s waiver of a right of first refusal. . Managing agents are not mentioned in the Act. Therefore, it is possible that they may still be able to collect application or processing fees.
As security deposits in excess of one month are prohibited, coops can no longer require a purchaser to place more than one month of maintenance in escrow. The Act also prohibits late fees greater than $50. This provides a further restraint on coops.
Coops must send delinquency notices to shareholders who are five (5) or more days late paying maintenance. These notices must be sent by certified mail. The absence of such notices may preclude summary proceedings. On the issue of defaults, when they are non-monetary in nature, shareholders must be provided thirty days within which to cure.
Finally, coops cannot combine summary proceedings for eviction with claims for assessments, legal fees, late fees and the like. This will ultimately result in doubling of litigation efforts.
Efforts are underway to make coop corporations exempt from some of these rules, but until the Act is amended or repealed, coops and condos must abide by the Act.