Provides omnibus co-op or condominium conversion requirements, including existing tenants right to purchase and capital replacement reserve fund

BILL NUMBER:S2091

Title of bill

An act to amend the general business law, in relation to the conversion of residential property to cooperative or condominium ownership

Purpose/summary of provisions

To revise the statutes regulating cooperative and condominium conversions of rental buildings in New York City, Westchester, Nassau and Rockland Counties in order to make the process more equitable for sponsors, purchasers and non-purchasing tenants and to improve the physical and financial condition of converted buildings. This bill increases from 15% to 25% the number of tenants in occupancy who must purchase dwelling units in order to declare a cooperative or condominium conversion plan effective. Such purchasers must have been in occupancy at the time the plan was accepted for filing by the Attorney General, rather than on the date the plan is declared effective. Tenants in occupancy will be afforded a ninety-day exclusive purchase period in all eviction and non-eviction conversions and a one year additional period to match any purchase agreement for the units they occupy. The bill also requires the creating of a minimum 10% reserve fund for capital replacements of major building systems in each conversion. Restrictions on the warehousing of vacant apartments are substantially modified to prohibit holding vacant more that 5% of a building's units or more than one unit in buildings of less than twenty units. The purchaser of any occupied apartment will be required to sign an affidavit indicating his or her acknowledgment of the rent regulated status of such apartment and the purchaser's duty to abide by such regulation and other applicable housing laws. Each building undergoing a conversion will be inspected by local code enforcement authorities and must be certified as free of housing code violations before the conversion plan can be declared effective.

Justification

Extensive experience with the vast number of cooperative and condominium conversions in the New York City metropolitan area demonstrates the need for significant reform of the conversion process. This bill will give tenants in occupancy the ability to participate in meaningful negotiations during the conversion of their buildings under non-eviction plans. The bill will also eliminate incentives to warehouse sound apartments that exist in the present statutes and will insure that reserve funds are adequate to protect purchasers against the need for special assessments for capital replacements. provisions for code enforcement inspections will aid both purchasers and non-purchasing tenants to upgrade their

living conditions. Purchasers of occupied apartments will benefit from greater disclosure of their obligations to non-purchasing tenants.

Existing law

None.

Fiscal implications

This bill will have minimal fiscal impact on state and local governments.

Fiscal implications

State and local government.

Effective date

This act shall take effect immediately and shall apply to conversion plans accepted for filing by the attorney general on or after the date it shall have become a law; provided that the amendments to section 352-eee of the general business law made by this act shall expire on the same date as such section expires and shall not affect the expiration of such section as provided in section 4 of chapter 402 of the laws of 1983, as amended and that the amendments to section 352-eeee of such law made by this act shall expire on the same date as such section expires and shall not affect the expiration of such section as provided in section 10 of chapter 555 of the laws of 1982, as amended.