Cooperatives Granted Relief From Restrictions Imposed By The Tenant Protection Act
On June 10, 2021, the New York State legislature exempted most cooperatives from important restrictions imposed by the Housing Stability and Tenant Protection Act of 2019 (HSTPA). The bill will become law immediately when the governor signs it and will apply to actions and proceedings commenced after it is signed. The exemptions apply to cooperative housing corporations except for most low and moderate-income cooperatives organized under the Private Housing Finance Law.
Important changes approved by the legislature are:
1. Rent security deposits and advance rental payments made for owner-occupied cooperative apartments may now exceed one month’s rent;
These exemptions will allow cooperative boards to require the deposit of a maintenance escrow in excess of one month’s rent as a condition of approving applications from prospective tenant-shareholders who may not otherwise have strong financial statements.
Managing agents will be permitted to collect application and other fees that they traditionally charge. Cooperatives will be permitted to collect late fees that may deter rent delinquencies and to collect attorneys’ fees in eviction and other cases should a tenant-shareholder default in the proceeding. It is not clear from the statute whether a cooperative may collect attorneys’ fees in the eviction case if the tenant does not so default.
We will advise you as soon as the governor signs the bill into law so you can obtain the benefits intended by the law.