Housing Stability Tenant Protection Act Provisions Rolled Back for Cooperatives

December 29, 2021 Advisory

As the 2021 New York legislative session wound down, a law of great significance to the cooperative community was passed and now, after many months, has been signed into law by Gov. Kathy Hochul. This is extremely important and should immediately be reviewed by all cooperative boards, shareholders, managers and attorneys.

In 2019, legislation was passed known as the Housing Stability and Tenant Protection Act (HSTPA), which affected all aspects of leasing. It affected cooperatives as well, although to some the intent was clearly to affect residential rental landlord-tenant relationships and not tenant-shareholders in cooperatives.

The new law, which became effective on Dec. 22, 2021, modifies the HSTPA by excluding cooperatives from certain provisions. The following provisions of the HSTPA no longer apply to cooperatives

  1. The provision limiting security deposits and advances to one month’s rent. This has been a serious impediment, as before HSTPA, cooperative boards often conditioned consent for a purchaser with insufficient or marginal finances upon the posting of a significant maintenance escrow. Cooperative boards may now use maintenance escrows again, without a limitation on the amount held in escrow. See GOL 7-108.
  2. The requirement for the landlord to give notice if a lease renewal is not offered to a tenant, or if a renewal is offered at an increase of rent equal to or greater than 5%. Cooperatives must comply with the provisions of their governing documents or any other laws on this point. See RPL 226-c.
  3. The prohibition of fees at the beginning of a tenancy, except for a credit or background check reimbursement of no more than $20. A cooperatives transfer agent or management company may now charge fees for processing an application, and they are now entitled to full reimbursement of the cost of a credit check, regardless of the amount. A comment in the Governor’s signing memo makes reference to the fees being reasonable and “approved by a supervising agency.” These comments are not yet part of the law, and we are not certain how that second requirement will be considered going forward. See RPL 238-a.
  4. The limitation of payments, fees or charges for the late payment of rent to $50 or 5%, whichever is less. The proprietary lease or occupancy agreement often provides for interest and/or late fees, and these may now be collected once again, though the total amount of “any payment, fee or charge for the late payment of rent” is limited to EIGHT (8%) PERCENT of the monthly maintenance if the proprietary lease or occupancy agreement permits. See RPL 238-a.
  5. The provision that only rent (as narrowly defined by HSTPA) may be sought in a summary proceeding. A cooperative may now again seek eviction of a tenant shareholder for nonpayment of both “rent” and any fees, charges, penalties or assessments due under the proprietary lease or occupancy agreement in a summary proceeding. See RPAPL 702.
  6. The requirement that an additional five-day notice be sent by certified mail if maintenance is not timely received. This provision does not relieve a cooperative of the additional five-day notice that HSTPA mandates, but does allow the notice to be given in the manner required by the proprietary lease or occupancy agreement rather than by certified mail. Since most proprietary leases require notices to be given by certified or registered mail, this change may be of little impact. See RPL 235-e.
  7. The provision prohibiting the collection of attorneys’ fees when there is a default judgment in a summary eviction proceeding. If there is a provision in the proprietary lease or occupancy agreement that permits the recovery of attorneys’ fees, it is now possible to recover the fees even if the tenant shareholder defaults. See RPL 234.

Note: While these rollbacks of the HSTPA benefit cooperatives generally, they specifically do not apply to Mitchell Lamas, Housing Development Fund Corporations and cooperatives subject to Articles 4 and 5 of the Private Housing Finance Law with limited exceptions. For these cooperatives, all the provisions of the HSTPA remain applicable.

Should you have questions about how this new law impacts your unique situation, please contact one of the attorneys listed below.

Contact Us
  • Worldwide
  • Boston, MA
  • Chicago, IL
  • Denver, CO
  • Dublin, Ireland
  • Edwardsville, IL
  • Jefferson City, MO
  • Kansas City, MO
  • Las Vegas, NV
  • London, England
  • Miami, FL
  • New York, NY
  • Orange County, CA
  • Philadelphia, PA
  • Princeton, NJ
  • Salt Lake City, UT
  • St. Louis, MO
  • Washington, D.C.
  • Wilmington, DE
Worldwide
abstract image of world map
Boston, MA
800 Boylston St.
30th Floor
Boston, MA 02199
Google Maps
Boston, Massachusetts
Chicago, IL
100 North Riverside Plaza
Suite 1500
Chicago, IL 60606-1520
Google Maps
Chicago, Illinois
Denver, CO
4643 S. Ulster St.
Suite 800
Denver, CO 80237
Google Maps
Denver, Colorado
Dublin, Ireland
Fitzwilliam Hall, Fitzwilliam Place
Dublin 2, Ireland
Google Maps
Edwardsville, IL
115 N. Second St.
Edwardsville, IL 62025
Google Maps
Edwardsville, Illinois
Jefferson City, MO
101 E. High St.
First Floor
Jefferson City, MO 65101
Google Maps
Jefferson City, Missouri
Kansas City, MO
2345 Grand Blvd.
Suite 1500
Kansas City, MO 64108
Google Maps
Kansas City, Missouri
Las Vegas, NV
7160 Rafael Rivera Way
Suite 320
Las Vegas, NV 89113
Google Maps
Las Vegas, Nevada
London, England
Royal College of Surgeons of England
38-43 Lincoln’s Inn Fields
London, WC2A 3PE
Google Maps
Miami, FL
355 Alhambra Circle
Suite 1200
Coral Gables, FL 33134
Google Maps
Photo of Miami, Florida
New York, NY
7 Times Square, 44th Floor
New York, NY 10036
Google Maps
New York City skyline
Orange County, CA
19800 MacArthur Boulevard
Suite 300
Irvine, CA 92612
Google Maps
Philadelphia, PA
2005 Market Street
29th Floor, One Commerce Square
Philadelphia, PA 19103
Google Maps
Philadelphia, Pennsylvania
Princeton, NJ
100 Overlook Center
Second Floor
Princeton, NJ 08540
Google Maps
Princeton, New Jersey
Salt Lake City, UT
222 South Main St.
Suite 1830
Salt Lake City, UT 84101
Google Maps
Salt Lake City, Utah
St. Louis, MO
7700 Forsyth Blvd.
Suite 1800
St. Louis, MO 63105
Google Maps
St. Louis, Missouri
Washington, D.C.
1717 Pennsylvania Avenue NW
Suite 400
Washington, DC 20006
Google Maps
Photo of Washington, D.C. with the Capitol in the foreground and Washington Monument in the background.
Wilmington, DE
1007 North Market Street
Wilmington, DE 19801
Google Maps
Wilmington, Delaware