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Governor Cuomo is Expected to Sign Into Law Sweeping Legislative Amendments that Create Major Carveouts for Non-HDFC Cooperatives

  |   By Manu Davidson

Governor Cuomo is expected to sign into law amendments to the general obligations law, the real property law, and the RPAPL, which excludes non-HDFC cooperatives from certain housing provisions.  As a result of these amendments, (1) cooperatives are not required to limit their security deposit requirements to one month’s maintenance; (2) cooperatives will not be limited to charging only $20.00 for an application fee, rather they will be allowed to recoup actual costs related to credit and background checks for prospective shareholders; (3) attorney’s fees, penalties, or assessments other than maintenance will be recoverable in housing court so long such charges are recoverable under the proprietary lease or occupancy agreement; (4) the cap on penalties for late maintenance payments will increase to 8%, with no monetary limits; and (5) cooperatives may designate the methods for sending arrears notices by mail other than certified mail so long as such method of sending notices is provided for in the proprietary lease or occupancy, and the lessee is a shareholder of the cooperative. 

Cooperatives have not been carved out of the hardship exemption, which allows a shareholder to demonstrate “extreme hardship” to stave off eviction.  The amendments will immediately go into effect after they are signed by the Governor and will apply to actions and proceedings prospectively.

The full text of the amendments may be viewed here.