S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1855

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 13, 2015
                               ___________

Introduced  by M. of A. FARRELL -- read once and referred to the Commit-
  tee on Housing

AN ACT to amend the executive law, in relation to creating the office of
  the cooperative and condominium ombudsman; to amend the  tax  law,  in
  relation  to  authorizing  the  residential unit fee; and to amend the
  state finance law, in relation to establishing the office of the coop-
  erative and condominium ombudsman fund

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The executive law is amended by adding a new article 49-C
to read as follows:
                              ARTICLE 49-C
           OFFICE OF THE COOPERATIVE AND CONDOMINIUM OMBUDSMAN
SECTION 996.   SHORT TITLE.
        996-A.  LEGISLATIVE DECLARATION.
        996-B. DEFINITIONS.
        996-C. OFFICE OF THE COOPERATIVE AND CONDOMINIUM OMBUDSMAN.
        996-D. FUNCTIONS, POWERS AND DUTIES OF THE OFFICE.
        996-E. PRINCIPAL OFFICE AND SATELLITE OFFICES.
        996-F. ASSISTANCE OF OTHER STATE AGENCIES.
        996-G. REPORTS TO THE GOVERNOR, ATTORNEY GENERAL AND THE  LEGIS-
                 LATURE.
        996-H. CONTRACT AUTHORITY.
        996-I. SEPARABILITY.
  S  996.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "COOPERATIVE AND CONDOMINIUM OMBUDSMAN ACT".
  S 996-A. LEGISLATIVE DECLARATION. THE LEGISLATURE FINDS AND DETERMINES
AS FOLLOWS:
  COOPERATIVE AND CONDOMINIUM HOUSING CONSTITUTES A SIGNIFICANT  PORTION
OF  NEW  YORK  STATE'S RESIDENTIAL HOUSING STOCK. IT IS AND HAS BEEN THE
PUBLIC POLICY OF THIS STATE TO ENCOURAGE SUCH FORMS OF HOME OWNERSHIP. A

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00058-01-5
              

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WIDE VARIETY OF LAWS HAVE  BEEN  ENACTED  TO  PROVIDE  FAIRNESS  IN  THE
CONVERSION OF RENTAL PROPERTIES TO COOPERATIVE AND CONDOMINIUM OWNERSHIP
AND  IN  THE  REGULATION  AND TAXATION OF COOPERATIVES AND CONDOMINIUMS.
STATE  AND  LOCAL  LAWS AND REGULATIONS ARE ALSO DESIGNED TO INSURE THAT
THE RESIDENTS OF SUCH HOUSING  ARE  PROVIDED  WITH  SAFE  AND  HABITABLE
ACCOMMODATIONS.
  INEVITABLY,  DISPUTES  HAVE  ARISEN  AMONG COOPERATIVE AND CONDOMINIUM
SPONSORS AND DEVELOPERS, COOPERATIVE SHAREHOLDERS AND  CONDOMINIUM  UNIT
OWNERS,  PROSPECTIVE  SHAREHOLDERS  AND UNIT OWNERS, BOARDS OF DIRECTORS
AND BOARDS OF MANAGERS. SUCH DISPUTES OFTEN RESULT IN LENGTHY AND COSTLY
LITIGATION AND UNCERTAINTY AS TO THE RIGHTS OF THE PARTIES  PENDING  THE
OUTCOME  OF  LITIGATION. SUCH LITIGATION DIVERTS RESOURCES THAT COULD BE
BETTER UTILIZED TO PROVIDE AFFORDABLE AND WELL-MAINTAINED BUILDINGS  AND
GROUNDS FOR THE COMMON GOOD OF THE OWNERS.
  THIS ARTICLE IS NECESSARY TO PROVIDE A NEUTRAL, INFORMATIVE AND ACCES-
SIBLE  RESOURCE AVAILABLE TO ALL PARTIES INVOLVED IN RESIDENTIAL COOPER-
ATIVE AND CONDOMINIUM OWNERSHIP AND GOVERNANCE. THE OMBUDSMAN  APPOINTED
PURSUANT  TO THIS ARTICLE WILL CONDUCT OUTREACH PROGRAMS TO EDUCATE UNIT
OWNERS AND BOARD MEMBERS AS TO THEIR LEGAL RIGHTS AND  RESPONSIBILITIES.
THE   OMBUDSMAN  WILL  ENCOURAGE  ALTERNATIVE  DISPUTE  RESOLUTION  WHEN
DISPUTES DO ARISE. THE OMBUDSMAN WILL BE AVAILABLE  TO  PROVIDE  DISPUTE
RESOLUTION  SERVICES  ON CONSENT OF THE PARTIES. THE OMBUDSMAN WILL ALSO
PROVIDE  MONITORING  AND  SUPERVISION  OF  COOPERATIVE  AND  CONDOMINIUM
ELECTIONS.
  S  996-B.  DEFINITIONS. 1. "COOPERATIVE" MEANS A CORPORATION ORGANIZED
AND OPERATING PURSUANT TO THE GENERAL BUSINESS LAW  OR  THE  COOPERATIVE
CORPORATIONS  LAW FOR THE PRIMARY PURPOSE OF PROVIDING RESIDENTIAL HOUS-
ING TO ITS SHAREHOLDERS.
  2. "CONDOMINIUM" MEANS A HOMEOWNERS  ASSOCIATION  OR  ANY  ASSOCIATION
ORGANIZED  AND OPERATING PURSUANT TO ARTICLE NINE-B OF THE REAL PROPERTY
LAW FOR THE PRIMARY PURPOSE OF PROVIDING RESIDENTIAL HOUSING TO ITS UNIT
OWNERS.
  3. "OFFICE" MEANS  THE  OFFICE  OF  THE  COOPERATIVE  AND  CONDOMINIUM
OMBUDSMAN CREATED BY THIS ARTICLE.
  4. "OMBUDSMAN" MEANS THE CHIEF ADMINISTRATIVE OFFICER OF THE OFFICE OF
THE COOPERATIVE AND CONDOMINIUM OMBUDSMAN.
  5.  "STATE  AGENCY"  MEANS  ANY DEPARTMENT, BOARD, BUREAU, COMMISSION,
DIVISION, OFFICE, COUNCIL OR AGENCY OF THE STATE, OR  A  PUBLIC  BENEFIT
CORPORATION OR AUTHORITY AUTHORIZED BY THE LAWS OF THE STATE.
  6.  "LOCAL  AGENCY"  MEANS  ANY DEPARTMENT, BOARD, BUREAU, COMMISSION,
DIVISION, OFFICE, COUNCIL, OFFICER OR AGENCY OF A CITY, TOWN OR VILLAGE.
  S 996-C. OFFICE OF THE COOPERATIVE AND CONDOMINIUM OMBUDSMAN.  1.  THE
OFFICE  OF  THE  COOPERATIVE AND CONDOMINIUM OMBUDSMAN IS HEREBY CREATED
WITHIN THE DEPARTMENT OF LAW TO HAVE AND EXERCISE THE FUNCTIONS,  POWERS
AND  DUTIES  PROVIDED  BY  THE  PROVISIONS OF THIS ARTICLE AND ANY OTHER
PROVISION OF LAW. THE ATTORNEY GENERAL SHALL BE  RESPONSIBLE  FOR  OVER-
SIGHT OF THE OFFICE.
  2.  THE  HEAD  OF  THE OFFICE SHALL BE THE COOPERATIVE AND CONDOMINIUM
OMBUDSMAN WHO SHALL BE APPOINTED BY THE ATTORNEY GENERAL. THE  OMBUDSMAN
SHALL  HOLD  OFFICE UNTIL THE END OF THE TERM OF THE ATTORNEY GENERAL BY
WHOM HE OR SHE WAS APPOINTED AND UNTIL HIS OR HER SUCCESSOR IS APPOINTED
AND HAS QUALIFIED. THE OMBUDSMAN MAY BE REMOVED BY THE ATTORNEY  GENERAL
FOR CAUSE, AFTER BEING GIVEN AN OPPORTUNITY TO BE HEARD. A VACANCY SHALL
BE FILLED IN THE SAME MANNER AS THE ORIGINAL APPOINTMENT.
  3.  THE  OMBUDSMAN  SHALL  RECEIVE AN ANNUAL SALARY TO BE FIXED BY THE
ATTORNEY GENERAL WITHIN THE AMOUNT MADE AVAILABLE THEREFOR BY AN  APPRO-

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PRIATION  AND  SHALL BE ALLOWED HIS OR HER ACTUAL AND NECESSARY EXPENSES
IN THE PERFORMANCE OF HIS OR HER DUTIES. THE OMBUDSMAN'S SALARY SHALL BE
NO LESS THAN THE SALARIES OF CERTAIN STATE OFFICERS  HOLDING  THE  POSI-
TIONS  INDICATED  IN  PARAGRAPH  (A)  OF  SUBDIVISION ONE OF SECTION ONE
HUNDRED SIXTY-NINE OF THIS CHAPTER.
  4. THE OMBUDSMAN SHALL BE AN ATTORNEY  WITH  EXTENSIVE  EXPERIENCE  IN
REAL  ESTATE, COOPERATIVE AND CONDOMINIUM LAW AND IN CONFLICT AND ALTER-
NATIVE DISPUTE RESOLUTION.
  5. THE OMBUDSMAN SHALL DIRECT THE WORK OF THE OFFICE AND SHALL BE  THE
CHIEF  EXECUTIVE  OFFICER  OF THE OFFICE. THE OMBUDSMAN MAY APPOINT SUCH
OFFICERS AND EMPLOYEES AS HE OR SHE MAY DEEM NECESSARY, PRESCRIBE  THEIR
POWERS AND DUTIES, FIX THEIR COMPENSATION AND PROVIDE FOR THE REIMBURSE-
MENT  OF  THEIR  EXPENSES, ALL WITHIN AMOUNTS MADE AVAILABLE THEREFOR BY
APPROPRIATION. SUCH OFFICERS AND EMPLOYEES SHALL INCLUDE  ATTORNEYS  AND
OTHER  PROFESSIONALS  WITH  EXTENSIVE EXPERIENCE IN REAL ESTATE, COOPER-
ATIVE AND CONDOMINIUM LAW AND IN CONFLICT AND ALTERNATIVE DISPUTE RESOL-
UTION.
  6. THE OMBUDSMAN AND OFFICERS AND EMPLOYEES OF THE OFFICE SHALL ADHERE
TO A CODE OF ETHICS IN ORDER TO INSPIRE PUBLIC CONFIDENCE AND  TRUST  IN
THE  FAIRNESS  AND  IMPARTIALITY  OF  THE  OFFICE.  THE  OMBUDSMAN SHALL
PRESCRIBE SUCH CODE OF ETHICS. SUCH CODE SHALL REQUIRE THAT THE  OMBUDS-
MAN AND OFFICERS AND EMPLOYEES OF THE OFFICE RESPECT AND COMPLY WITH THE
LAW; THAT THEY NOT USE OR ATTEMPT TO USE THEIR POSITIONS TO SECURE PRIV-
ILEGES  OR  EXEMPTIONS  FOR THEMSELVES OR OTHERS; THAT THEY NOT SOLICIT,
ACCEPT OR AGREE TO ACCEPT ANY GIFTS OR GRATUITIES FROM PERSONS HAVING OR
LIKELY TO HAVE ANY OFFICIAL TRANSACTION WITH THE OFFICE; THAT  THEY  NOT
REQUEST  OR ACCEPT ANY PAYMENT IN ADDITION TO THEIR REGULAR COMPENSATION
FOR ASSISTANCE GIVEN AS PART OF THEIR OFFICIAL  DUTIES;  AND  THAT  THEY
SHALL  NOT  PERFORM  ANY FUNCTION IN A MANNER THAT IMPROPERLY FAVORS ANY
PERSON OR PARTY.
  7. THE OMBUDSMAN AND OFFICERS AND EMPLOYEES OF THE  OFFICE  SHALL  NOT
SERVE  AS OFFICERS OR EMPLOYEES OF A POLITICAL PARTY OR A CLUB OR ORGAN-
IZATION RELATED TO A POLITICAL PARTY, RECEIVE  REMUNERATION  FOR  ACTIV-
ITIES  ON BEHALF OF ANY CANDIDATE FOR PUBLIC OFFICE OR PARTY POSITION OR
ENGAGE IN SOLICITING VOTES OR OTHER ACTIVITIES ON BEHALF OF A  CANDIDATE
FOR PUBLIC OFFICE OR PARTY POSITION.
  8.  THE SECRETARY TO THE GOVERNOR SHALL ASSURE THAT ALL STATE AGENCIES
PROVIDE THE OMBUDSMAN WITH ASSISTANCE IN ADVANCING THE PURPOSES  OF  THE
OFFICE AND TO ASSURE THAT THE ACTIVITIES OF THE OFFICE ARE FULLY COORDI-
NATED WITH THE ACTIVITIES OF STATE AGENCIES PROVIDING RELATED SERVICES.
  S  996-D. FUNCTIONS, POWERS AND DUTIES OF THE OFFICE. THE OFFICE SHALL
HAVE THE FOLLOWING FUNCTIONS, POWERS AND DUTIES:
  1. TO EDUCATE AND INFORM SHAREHOLDERS OF COOPERATIVES AND UNIT  OWNERS
OF CONDOMINIUMS, THEIR BOARDS OF DIRECTORS AND BOARDS OF MANAGERS, PROP-
ERTY  MANAGERS, PROFESSIONALS WORKING WITH AND FOR SUCH BOARDS AND OTHER
INTERESTED PARTIES OF THEIR LEGAL RIGHTS AND RESPONSIBILITIES UNDER  THE
FEDERAL,  STATE AND LOCAL LAWS AND REGULATIONS APPLICABLE TO COOPERATIVE
AND CONDOMINIUM HOUSING IN THE STATE OF NEW YORK AND UNDER  THE  COOPER-
ATIVE AND CONDOMINIUM DOCUMENTS GOVERNING THE RESPECTIVE PROPERTIES.
  2.  TO  COORDINATE  AND  ASSIST  IN THE PREPARATION AND PUBLICATION OF
EDUCATIONAL AND REFERENCE MATERIALS ABOUT RESIDENTIAL  COOPERATIVES  AND
CONDOMINIUMS,  TO  MAKE SUCH RESOURCES KNOWN AND AVAILABLE TO THE WIDEST
POSSIBLE AUDIENCE.
  3. TO ORGANIZE AND CONDUCT MEETINGS,  WORKSHOPS,  CONFERENCES,  PUBLIC
HEARINGS  AND FORUMS AND TO UTILIZE ALL FORMS OF COMMUNICATIONS MEDIA TO

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DISSEMINATE ACCURATE AND  TIMELY  INFORMATION  OF  INTEREST  TO  PERSONS
RESIDING IN, OWNING AND MANAGING COOPERATIVE AND CONDOMINIUM HOUSING.
  4.  TO  PROVIDE  MEETINGS,  MEDIATION,  ARBITRATION AND OTHER FORMS OF
ALTERNATIVE DISPUTE RESOLUTION SERVICES TO COOPERATIVE  AND  CONDOMINIUM
SPONSORS  AND  DEVELOPERS, COOPERATIVE SHAREHOLDERS, CONDOMINIUM OWNERS,
THEIR BOARDS OF DIRECTORS AND  MANAGERS,  PROSPECTIVE  SHAREHOLDERS  AND
UNIT  OWNERS  AND  OTHER PARTIES SO AS TO AVOID COSTLY AND LENGTHY LITI-
GATION AND REDUCE EXPENSES FOR THOSE INVOLVED IN DISPUTES.
  5. TO SUBPOENA AND ENFORCE THE  ATTENDANCE  OF  WITNESSES,  ADMINISTER
OATHS  OR  AFFIRMATIONS AND EXAMINE WITNESSES UNDER OATH AND REQUIRE THE
PRODUCTION OF ANY BOOKS AND PAPERS DEEMED RELEVANT OR  MATERIAL  TO  THE
RESOLUTION OF ANY DISPUTE PENDING BEFORE THE OFFICE.
  6.  TO  ENGAGE  WITH THE HOUSING COURTS, OTHER TRIAL COURTS, STATE AND
LOCAL AGENCIES AND WITH ALTERNATIVE DISPUTE  RESOLUTION  PROGRAMS  MAIN-
TAINED  BY  THE  OFFICE  OF  COURT  ADMINISTRATION  IN  ORDER TO PROVIDE
SPECIALIZED EXPERTISE IN THE RESOLUTION OF COOPERATIVE  AND  CONDOMINIUM
DISPUTES AS AN ALTERNATIVE TO LITIGATION.
  7.  TO OFFER PROCEDURES, MONITORS AND VOTE COUNTING SERVICES TO ASSURE
FAIR ELECTIONS FOR MEMBERS OF COOPERATIVE BOARDS OF DIRECTORS AND CONDO-
MINIUM BOARDS OF MANAGERS.  FIFTEEN PERCENT OF THE TOTAL  VOTING  INTER-
ESTS  IN  A  COOPERATIVE OR CONDOMINIUM OR SHAREHOLDERS OR OWNERS OF SIX
RESIDENTIAL UNITS, WHICHEVER IS GREATER,  MAY  PETITION  THE  OFFICE  TO
ATTEND AND CONDUCT AN ELECTION OF DIRECTORS OR MANAGERS. ALL COSTS ASSO-
CIATED WITH THE ELECTION MONITORING PROCESS SHALL BE PAID BY THE COOPER-
ATIVE OR CONDOMINIUM.
  8.  TO REFER ANY COMPLAINT RECEIVED TO THE APPROPRIATE LAW ENFORCEMENT
AGENCY FOR PROSECUTION, IF DEEMED APPROPRIATE BY THE OFFICE.
  9. TO PERFORM ANY OTHER FUNCTIONS THAT ARE NECESSARY OR APPROPRIATE TO
FULFILL THE DUTIES AND RESPONSIBILITIES OF THE OFFICE.
  S 996-E. PRINCIPAL OFFICE AND  SATELLITE  OFFICES.  THE  OFFICE  SHALL
MAINTAIN  ITS  PRINCIPAL  OFFICE  IN THE CITY OF NEW YORK AND SHALL HAVE
SATELLITE OFFICES IN OTHER LOCATIONS WITHIN THE STATE OF NEW YORK  WHERE
THERE ARE SIGNIFICANT CONCENTRATIONS OF COOPERATIVE OR CONDOMINIUM HOUS-
ING.
  S  996-F.  ASSISTANCE  OF  OTHER  STATE  AGENCIES.  TO  EFFECTUATE THE
PURPOSES OF THIS ARTICLE, THE OMBUDSMAN MAY REQUEST AND SHALL  BE  ENTI-
TLED  TO  RECEIVE  FROM ANY STATE AGENCY, AND THE SAME ARE AUTHORIZED TO
PROVIDE, SUCH ASSISTANCE, SERVICES, FACILITIES, AND DATA AS WILL  ENABLE
THE  OFFICE  TO  CARRY  OUT  ITS  FUNCTIONS, POWERS AND DUTIES, AND SUCH
TEMPORARILY OR PERMANENTLY ASSIGNED PERSONNEL AS  THE  DIRECTOR  OF  THE
BUDGET MAY APPROVE.
  S  996-G.  REPORTS  TO THE GOVERNOR, ATTORNEY GENERAL AND THE LEGISLA-
TURE. THE OFFICE SHALL MAKE AN ANNUAL  REPORT,  TO  BE  RECEIVED  ON  OR
BEFORE JANUARY FIRST, TO THE GOVERNOR, ATTORNEY GENERAL AND THE LEGISLA-
TURE CONCERNING THE ACTIVITIES UNDERTAKEN BY THE OFFICE, RECOMMENDATIONS
FOR  LEGISLATIVE PROPOSALS, DATA CONCERNING PROGRAM ACTIVITIES AND OTHER
PERTINENT INFORMATION AS MAY BE REQUIRED.
  S 996-H. CONTRACT AUTHORITY. THE OFFICE IS HEREBY EMPOWERED  TO  ENTER
INTO  ANY AGREEMENT OR CONTRACT WITH ANY STATE OR LOCAL AGENCY NECESSARY
OR CONVENIENT TO CARRY OUT THE PROVISIONS OF THIS ARTICLE.
  S 996-I. SEPARABILITY. IF ANY CLAUSE, SENTENCE, PARAGRAPH, SECTION  OR
PART  OF THIS ARTICLE SHALL BE ADJUDGED BY ANY COURT OF COMPETENT JURIS-
DICTION TO BE INVALID, SUCH JUDGMENT SHALL NOT AFFECT, IMPAIR OR INVALI-
DATE THE REMAINDER THEREOF, BUT SHALL BE CONFINED IN  ITS  OPERATION  TO
THE  CLAUSE,  SENTENCE,  PARAGRAPH,  SECTION  OR  PART  THEREOF DIRECTLY

A. 1855                             5

INVOLVED IN THE CONTROVERSY IN  WHICH  SUCH  JUDGMENT  SHALL  HAVE  BEEN
RENDERED.
  S  2.  The tax law is amended by adding a new section 186-g to read as
follows:
  S 186-G. RESIDENTIAL UNIT FEE. A COOPERATIVE HOUSING CORPORATION OR  A
HOMEOWNERS ASSOCIATION, AS SUCH TERMS ARE DEFINED IN SECTION TWO HUNDRED
TEN OF THIS CHAPTER, SHALL PAY AN ANNUAL FEE OF SIX DOLLARS PER YEAR FOR
EACH  RESIDENTIAL UNIT LOCATED IN A BUILDING OR BUILDINGS OWNED OR OPER-
ATED BY SUCH CORPORATION OR ASSOCIATION. SUCH FEE SHALL  BE  PAYABLE  TO
THE  DEPARTMENT.  ALL  REVENUE  FROM  THE  FEE  IMPOSED PURSUANT TO THIS
SECTION SHALL BE PAID BY THE DEPARTMENT TO THE STATE COMPTROLLER  TO  BE
DEPOSITED TO AND CREDITED TO THE OFFICE OF THE COOPERATIVE AND CONDOMIN-
IUM  OMBUDSMAN  FUND,  ESTABLISHED PURSUANT TO SECTION EIGHTY-ONE OF THE
STATE FINANCE LAW.
  S 3. The state finance law is amended by adding a new  section  81  to
read as follows:
  S  81.  OFFICE  OF  THE COOPERATIVE AND CONDOMINIUM OMBUDSMAN FUND. 1.
THERE IS HEREBY ESTABLISHED IN THE CUSTODY OF THE  STATE  COMPTROLLER  A
SPECIAL FUND TO BE KNOWN AS THE "OFFICE OF THE COOPERATIVE AND CONDOMIN-
IUM OMBUDSMAN FUND".
  2.  THE OFFICE OF THE COOPERATIVE AND CONDOMINIUM OMBUDSMAN FUND SHALL
CONSIST OF MONIES APPROPRIATED THERETO, FUNDS TRANSFERRED FROM ANY OTHER
FUND OR SOURCES, AND MONIES DEPOSITED THEREIN PURSUANT  TO  SECTION  ONE
HUNDRED EIGHTY-SIX-G OF THE TAX LAW.
  3. THE MONIES IN THE OFFICE OF THE COOPERATIVE AND CONDOMINIUM OMBUDS-
MAN  FUND  SHALL  BE KEPT SEPARATE FROM AND SHALL NOT BE COMMINGLED WITH
ANY OTHER MONIES IN THE CUSTODY OF THE STATE  COMPTROLLER.  SUCH  MONIES
SHALL  BE  ALLOCATED TO AND EXPENDED BY THE DEPARTMENT OF LAW SOLELY FOR
THE STAFFING AND ADMINISTRATION OF THE OFFICE  OF  THE  COOPERATIVE  AND
CONDOMINIUM OMBUDSMAN OF SUCH DEPARTMENT.
  S 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law.