Governs election of board by residents of cooperatives and condominiums

BILL NUMBER:S1659A

Title of bill

An act to amend the general business law, in relation to plans for conversions of residences to cooperative or condominium ownership

Purpose

The purpose of this bill is to assure that control of the converted cooperative or condominium be turned over to the unit owners as soon as possible.

Summary of provisions

Adds a new paragraph (g) to section 352-eee, and to subdivision two of 352-eeee of the general business law, which provides that if twenty or more units are proposed in such plan, that a majority of the Board of Directors shall be elected by the actual occupants of a building when 51% of the shares or units have been sold, or regardless of the number of units sold, within 36 months from the time the plan has been declared effective, whichever comes sooner.

Justification

The future of a co-op or condo building should be in the hands of the people actually living there, not an outside speculator. This bill will provide that as soon as most of the units or shares of a building have been sold, control should be transferred to the most intimately concerned with the building management, the owner occupants. This bill exempts buildings that have fewer than twenty units, because it may be more difficult to comprise the majority of the board of directors from unit owners in smaller buildings. Furthermore, to prevent speculators from selling just under 51% in order to maintain control, the bill provides that in all cases the owners of the units or shares will control 36 months after the plan is declared effective.

Legislative history

This is a new bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately.