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Bill Extending Conflict-of-Interest Disclosure Legislation to Condominiums Passes Legislature

In the December 2017 and February 2018 issues of this Client Advisory we reported on new legislation which, among other things, requires cooperatives to provide their shareholders with an annual report on contracts approved by the Board in which one or more Board members has a conflict of interest.  The sponsors of the legislation intended for it to cover both cooperatives and condominiums, but due to a drafting error, most condominiums were not covered.  Both the New York State Senate and Assembly have now passed Assembly Bill A8993, which would modify the statutory language so that it will now apply to condominiums.  The bill will soon be delivered to Governor Cuomo and, if he signs it, will take effect retroactively to January 1, 2018.  Condominiums would be required to provide their board members with copies of the conflict-of-interest statute, and to issue a report to their unit owners by December 31, 2018, advising whether any covered contracts have been approved since January 1, 2018.  We will continue to report on any further developments regarding this bill and other developments under the new law.