The New York City Council recently enacted Int. 1120-2024 B, or the Cooperative Application Timeline Law (L.L. 2026/058). This addition to the New York City Administrative Code establishes deadlines for Co-op Boards to approve or deny applications for the sale of apartments in their buildings. The new law takes effect on July 28, 2026, and will govern purchase applications made on or after that date.

The Cooperative Application Timeline Law requires that a Co-op Board timely acknowledge, then approve or deny an applicant, but stops short of requiring a Board to indicate the reason(s) for a denial. Consequences for failing to adhere to these new strict deadlines are varied, and include automatic completeness and civil penalties should a Board's actions or failure to act be challenged.

The Board has just 15 days to either acknowledge receipt of an application or request additional or missing information if the application is not complete. Absent a request for additional information, an application is deemed complete as of that 15-day deadline.

Additionally, and unless a Board or applicant takes advantage of the law’s extension provisions, a Board’s failure to approve or deny an application within 45 days of receiving a complete application may result in a $1,000 fine for a first offense, with increased fines thereafter. 

Boards are advised to discuss with their counsel the impact that the Cooperative Application Timeline Law might have on their and their managing agent’s policies and procedures. The discussion should include transfer requirements, content of the application package, a denial procedure, and how to draft a denial notice that will withstand scrutiny under City, State, and Federal housing discrimination laws. The law should not be confused with the so-dubbed Reason Law, Intro-440, which was not put to the City Council for a vote in 2025. That bill, as written, sought to compel written statements, certified by an officer of the Co-op, stating, among other things, which aspects of the purchase application were found to be deficient or conflicting with Board requirements, and the methods used for coming to that conclusion. The Cooperative Application Timeline Law does not require a Board to state the reason for a denial.

Although it does not discuss them in any detail, the Cooperative Application Timeline Law provides for “conditional approvals.” One reason a Board might want to offer a conditional approval is to ensure compliance with the Fair Chance for Housing Act. Effective January 1, 2025, the Fair Chance for Housing Act, among other things, restricts a landlord or cooperative from asking an applicant about or running a background check for criminal conviction history until a tenant or purchaser is otherwise approved or conditionally approved, subject to receipt of favorable report. Individuals with felony convictions older than 5 years and misdemeanor convictions older than 3 years are a protected class pursuant to the City’s discrimination laws. (Sex offense convictions requiring registration do not have time restrictions.) A Board may also want to condition approval in other instances, such as where the applicant’s documents, such as a trust, or where the applicant’s financial documents, require additional consideration. 

The Law is silent on interviews and how the interview process correlates with the time restrictions. Boards should be prepared to organize and conduct interviews as part of the 45-day requirement. Boards and prospective purchasers may also take advantage of the time extensions provided by the law. The Board is entitled to one 14-day extension as of right, and may obtain additional review time upon the prospective purchaser’s written consent. The law also provides for a summer recess period, which permits a Board to adopt a summer break policy tolling the 45-day time restraint during the months of July and August.

Not all cooperatives are governed by the Cooperative Application Timeline Law. Cooperatives with 10 or fewer units, HDFC cooperatives, and other cooperative housing, subject to the approval of a governmental housing agency, such as Mitchell-Lama developments, are exempt from the law.

New York City’s new Cooperative Application Timeline Law is not unique. Suffolk County’s Cooperative Law was enacted in 2009, which, in addition to adhering to a timeline, requires Boards to provide the reason for a denial. Westchester County’s law pertaining to the purchase and sale of cooperative shares mandates the use of a County-provided form letter of rejection, which includes, among other things, a list of reasons for rejection, and further requires that the Board notify the Westchester County Human Rights Commission of the denial with the rejected applicant’s contact information.

The Commissioner of Housing Preservation and Development (HPD) will be tasked with commencing proceedings to recover civil penalties imposed under the new Cooperative Application Timeline Law. Gallet Dreyer & Berkey will monitor for updates about the anticipated rules and procedures from HPD.

The law is silent on sublets, but applies to sales as broadly defined by the law to include transfers and gifts. The new chapter to the City’s Administrative Code is entitled "Sales of Cooperative Apartments," which defines an "Application" as one "that a cooperative corporation requires to be submitted in connection with a sale requiring board approval." Whether this law will be expanded by the City Council or the courts to include subletting remains to be seen. 

If you have questions about your Board’s readiness, please feel free to reach out to Beth at bmg@gdblaw.com or 212-93503131.