Legislation has been introduced in the NYS Senate that will fundamentally alter the ability of co-ops and condos to effectively manage their properties and their quality of life. The legislation will burden co-op and condo owners with the costs associated with delinquent owners and change the landscape of what it means to be a co-op shareholder.
The Real Estate Board of NY (REBNY) and many others think the bill may not come up for a vote until 2021. Others are concerned that it might get passed in a late 2020 end of session rush. The bill which is commonly known as the “Good Cause Eviction Bill” essentially introduces rent regulation throughout the State of New York without the ability for co-ops and condo buildings to increase rents, maintenance or other fees to cover rising property taxes and Major Capital Improvement (MCI) renovation costs.
The legislation caps common charges, assessments and maintenance fee increases to 3% annually. With the anticipation of property tax increases, crushing “green energy” building costs and retrofits, capital improvements, facade and lead law requirements, increases in labor and other operating costs, this law would make it impossible for Boards of Directors to effectively maintain their buildings. In addition to capping increases to 3% per year, the draconian bill provides no assurances that an owner who sublets an apartment will be able to regain possession of it at a later date in a timely manner.
Essentially, the bill would materially affect co-ops and condos by:
1. Limiting the ability to enforce common charge or maintenance increases of more than 3% or 1.5x the Consumer Price Index (CPI) in any calendar year.
2. Making it impossible for co-op and condo owners to sublease their units for limited periods of time with the knowledge that they could regain possession in a timely manner. Under the legislation, owners may be required to offer renewal leases.
3. Exempting owner occupied co-op and condo buildings that are fewer than 4 units, many of which are valued in the millions and NOT exempting owner occupied co-ops and condo buildings that are larger than 4 units many of which have valuations of $500,000 or less. Basing exemptions on size instead of value is the essence of inequity.
This bill is currently sponsored by 24 senators and 58 assembly members. We think many of them may not fully understand the effects of this legislation on co-ops and condos and we are requesting that they have their names removed from sponsorship of the bill. This bill is an onerous piece of legislation that will abridge the rights of co-op and condo owners. We will seek to have this bill amended to exclude co-ops and condos