Stop Co-op Retaliation

Section 1. The real property law is amended by adding a new section 235-k to read as follows:

§ 235-k. Retaliation by cooperative housing corporations prohibited. 1. For the purposes of this section, the following terms shall have the following meanings:

(a) "Cooperative housing corporation" shall mean the board or managing agent of any corporation, entity, or organization formed pursuant to article four of the business corporation law or article eleven of the private housing finance law that operates residential housing on a cooperative basis through proprietary leases, occupancy agreements, or similar arrangements.

(b) "Shareholder" shall mean any owner of shares allocated to a residential unit within a cooperative housing corporation and any lawful occupant residing pursuant to such shareholder's proprietary lease or occupancy agreement.

(c) "Adverse action" shall include, but not be limited to:

(i) commencement of litigation against a shareholder;

(ii) termination or attempted termination of a proprietary lease;

(iii) commencement of proceedings alleging objectionable conduct;

(iv) selective enforcement of house rules, bylaws, or proprietary lease provisions;

(v) imposition of fines, fees, assessments, or penalties not imposed in a substantially similar manner upon other shareholders;

(vi) denial of approvals, permissions, or applications otherwise customarily granted under similar circumstances; or

(vii) any action that would reasonably deter a shareholder from exercising rights protected by this section.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD16513-01-6

2. No cooperative housing corporation shall take adverse action against a shareholder because such shareholder, or someone acting on such shareholder's behalf, in good faith:

(a) made a complaint to the cooperative housing corporation or any governmental authority alleging violation of any health or safety law, regulation, code, or ordinance or the warranty of habitability under section two hundred thirty-five-b of this article;

(b) requested inspection or enforcement by a governmental authority;

(c) exercised rights under the business corporation law, proprietary lease, bylaws, certificate of incorporation, or house rules;

(d) requested access to corporate books and records as authorized by law;

(e) communicated with other shareholders regarding governance, elections, finances, or building operations;

(f) organized, participated in, or supported shareholder associations or groups;

(g) sought legal advice or representation;

(h) commenced, participated in, or testified in any judicial, administrative, or arbitration proceeding involving the cooperative housing corporation; or

(i) otherwise exercised rights protected by federal, state, or local law.

3. An adverse action occurring within one year after a shareholder engages in protected activity shall create a rebuttable presumption that such action was retaliatory. The effect of the presumption shall be to require the cooperative housing corporation to establish a non-retaliatory motive for its acts by a preponderance of the evidence.

4. In any action seeking termination of a proprietary lease or eviction of a shareholder pursuant to an objectionable conduct provision, evidence of retaliation shall be admissible notwithstanding any application of the business judgment rule. Judgement shall be entered for the shareholder if the court finds that the cooperative housing corporation is acting in retaliation for any action set forth in subdivision two of this section.

5. A cooperative housing corporation's board or its agent shall be subject to a civil action for damages, attorney's fees and costs and other appropriate relief, including injunctive and other equitable remedies, as may be determined by a court of competent jurisdiction in any case in which the cooperative housing corporation has violated the provisions of this section.

6. Any provision of a proprietary lease, occupancy agreement, bylaw, rule, policy, or contract purporting to waive or limit rights provided under this section shall be void as contrary to public policy.

7. This section shall not be given effect in any case in which it is established that the condition from which the complaint or action arose was caused by the shareholder, a member of the shareholder's household, or a guest of the shareholder.

8. Nothing in this section shall be construed to classify a cooperative housing corporation as a landlord or a shareholder as a tenant for purposes other than this section.

§ 2. This act shall take effect immediately.