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Legislation Would Relieve Cooperatives of Most Restrictions Imposed Under the Housing Stability and Tenant Protection Act

            Since 2019, cooperatives have been subject to several burdensome restrictions imposed by the New York State Housing Stability and Tenant Protection Act. This law was drafted with rental tenants in mind, but because of the way it was drafted, many of its provisions applied to cooperatives as well.

On June 10, 2021, the New York State Legislation passed legislation that would exempt cooperatives from many, although not all, provisions of this law. If the bill is signed by the Governor, cooperatives will no longer be subject to restrictions (1) limiting security deposits or maintenance escrows to one month’s rent or maintenance; (2) capping fees that can be charged to applicants at $20 (the actual cost of processing the application or obtaining a background check could be charged); (3) capping late fees at $50 or 5% of the monthly maintenance (the new limit would be 8%); and (4) forbidding the Housing Court from awarding attorneys’ fees and costs to a cooperative if it prevails in a litigation. We will provide an update on the status of this legislation in a future issue of this Client Advisory.