S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7523
 
                             I N  S E N A T E
 
                             January 19, 2018
                                ___________
 
 Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
 AN ACT to amend the real property law, in  relation  to  the  timing  of
   decisions for the sales of cooperative apartments
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Legislative findings.  The  legislature  hereby  finds  and
 declares  that  residential  cooperative purchasers are subject to proc-
 esses and conditions that do not also apply to the  purchases  of  other
 single-family  residences.  The  provisions of this act are not intended
 and do not diminish the duty  of  cooperative  boards  to  uphold  their
 established  fiduciary  duties.  It is the intent of this act to signif-
 icantly improve the transparency of the cooperative purchase process  to
 the benefit of all parties involved in the transaction.
   §  2.  The  real property law is amended by adding a new article 11 to
 read as follows:
 
                                ARTICLE 11
               COOPERATIVE CORPORATIONS; TIMING OF DECISIONS
 
 SECTION 360. SHORT TITLE.
         361. DEFINITIONS.
         362. REQUIREMENTS FOR DETERMINATION.
         363. ACKNOWLEDGEMENT OF RECEIPT OF APPLICATION.
         364. TIME FOR DETERMINATION.
         365. TOLLING OF TIME.
         366. CONSTRUCTION.
   § 360. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY  BE  CITED  AS
 THE "FAIRNESS IN COOPERATIVE HOMEOWNERSHIP ACT".
   § 361. DEFINITIONS. AS USED IN THIS ARTICLE, UNLESS THE CONTEXT OTHER-
 WISE REQUIRES:
   1.  "APPLICATION" MEANS THE SET OF DOCUMENTS UTILIZED BY A COOPERATIVE
 CORPORATION TO  FACILITATE  A  PROSPECTIVE  PURCHASER'S  ACQUISITION  OF
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13573-01-7

 S. 7523                             2
 
 CERTIFICATES  OF  STOCK,  A  PROPRIETARY  LEASE, OR OTHER EVIDENCE OF AN
 OWNERSHIP INTEREST IN SUCH COOPERATIVE CORPORATION.
   2.  "COOPERATIVE  CORPORATION"  MEANS  ANY CORPORATION GOVERNED BY THE
 REQUIREMENTS OF THE STATE COOPERATIVE CORPORATION  LAW  OR  THE  GENERAL
 BUSINESS  LAW,  WHICH  AMONG  OTHER  THINGS, GRANTS PERSONS THE RIGHT TO
 RESIDE IN A COOPERATIVE APARTMENT, THAT RIGHT EXISTING BY SUCH  PERSON'S
 OWNERSHIP OF CERTIFICATES OF STOCK, PROPRIETARY LEASE, OR OTHER EVIDENCE
 OF OWNERSHIP OF AN INTEREST IN SUCH ENTITY.
   3. "PROPRIETARY LEASE" MEANS THE LEASE OR OCCUPANCY AGREEMENT BY WHICH
 A COOPERATIVE CORPORATION PERMITS A PERSON TO OCCUPY AN APARTMENT IN THE
 PREMISES OWNED BY THE COOPERATIVE CORPORATION.
   4.  "PROSPECTIVE  PURCHASER"  MEANS  A  PERSON  WHO HAS ENTERED INTO A
 CONTRACT OF SALE TO PURCHASE THE PROPRIETARY  LEASE  AND  THE  OWNERSHIP
 INTEREST IN A COOPERATIVE CORPORATION FROM A PROSPECTIVE SELLER.
   5. "PROSPECTIVE SELLER" MEANS A PERSON WHO HAS A PROPRIETARY LEASE AND
 AN  OWNERSHIP  INTEREST IN A COOPERATIVE CORPORATION AND WHO HAS ENTERED
 INTO A CONTRACT OF SALE TO  SELL  THE  PERSON'S  PROPRIETARY  LEASE  AND
 OWNERSHIP  INTEREST  IN  A  COOPERATIVE  CORPORATION  TO  A  PROSPECTIVE
 PURCHASER.
   6. "SALE" MEANS THE TRANSFER OF A PERSON'S  OWNERSHIP  INTEREST  IN  A
 COOPERATIVE  CORPORATION  AND THAT PERSON'S PROPRIETARY LEASE TO ANOTHER
 PERSON.
   § 362. REQUIREMENTS FOR DETERMINATION. 1. THE BOARD  OF  DIRECTORS  OR
 MANAGING  AGENT  OF EACH COOPERATIVE CORPORATION SHALL MAINTAIN A STAND-
 ARDIZED APPLICATION AND LIST OF REQUIREMENTS FOR ALL COOPERATIVE  APART-
 MENTS SUBJECT TO THE BY-LAWS OR PROPRIETARY LEASE OF SUCH CORPORATION.
   2.  THE  BOARD  OF  DIRECTORS  OR  MANAGING AGENT OF EVERY COOPERATIVE
 CORPORATION SHALL PROVIDE THE CORPORATION'S STANDARDIZED APPLICATION AND
 LIST OF REQUIREMENTS TO ANY PROSPECTIVE PURCHASERS AND PROSPECTIVE SELL-
 ERS, OR THEIR RESPECTIVE REAL ESTATE AGENTS, PROMPTLY UPON REQUEST,  AND
 SHALL  INCLUDE  INSTRUCTIONS  AS TO WHERE AND HOW TO SUBMIT THE REQUIRED
 MATERIALS INCLUDING THE MAILING ADDRESS AND DESIGNATED EMAIL ADDRESS FOR
 THE COOPERATIVE CORPORATION.
   § 363. ACKNOWLEDGEMENT OF RECEIPT OF  APPLICATION.  1.  A  PROSPECTIVE
 PURCHASER  SHALL  SUBMIT  AN  APPLICATION  VIA REGISTERED MAIL, AND SUCH
 APPLICATION SHALL INCLUDE A MAILING ADDRESS AND  EMAIL  ADDRESS.  WITHIN
 TEN  BUSINESS  DAYS  OF  RECEIVING  AN  APPLICATION  FROM  A PROSPECTIVE
 PURCHASER, A COOPERATIVE CORPORATION  SHALL  PROVIDE  TO  A  PROSPECTIVE
 PURCHASER  VIA ELECTRONIC MAIL AND REGISTERED MAIL A WRITTEN ACKNOWLEDG-
 MENT OF THE RECEIPT OF SUCH APPLICATION. ELECTRONIC MAIL DELIVERY  SHALL
 SERVE AS AN ADDITIONAL NOTICE, BUT SHALL NOT REPLACE THE REQUIREMENT FOR
 DELIVERY  BY REGISTERED MAIL. THE REQUIREMENTS OF THIS SUBDIVISION SHALL
 APPLY BOTH TO A PROSPECTIVE PURCHASER'S INITIAL SUBMISSION  AND  TO  ANY
 SUBSEQUENT SUBMISSIONS THE PROSPECTIVE PURCHASER MAY MAKE.
   2.  AN  ACKNOWLEDGEMENT  OF  RECEIPT  SHALL SET FORTH WITH SPECIFICITY
 WHETHER THE  APPLICATION  SUBMITTED  FULLY  SATISFIES  THE  REQUIREMENTS
 THEREFOR  AND  LIST  OF  THE  REQUIREMENTS PROVIDED FOR IN SECTION THREE
 HUNDRED SIXTY-TWO OF THIS ARTICLE, THE WAY OR WAYS THE SUBMITTED  APPLI-
 CATION  FAILED  TO  COMPLY  WITH  THE  COOPERATIVE CORPORATION'S LIST OF
 REQUIREMENTS MAINTAINED AND  PROVIDED  BY  THE  COOPERATIVE  CORPORATION
 PURSUANT  TO SUCH SECTION, AND IF ADDITIONAL MATERIALS ARE REQUESTED FOR
 CLARIFICATION OF A PREVIOUSLY SUBMITTED APPLICATION, WHAT MATERIALS  ARE
 DESIRED.
   3.  FAILURE BY A COOPERATIVE CORPORATION TO PROVIDE A WRITTEN ACKNOWL-
 EDGEMENT PURSUANT TO THIS SECTION WITHIN TEN BUSINESS DAYS FROM THE DATE

 S. 7523                             3
 
 OF RECEIPT OF THE SUBMISSION OF  AN  APPLICATION  SHALL  RESULT  IN  THE
 APPLICATION BEING DEEMED TO BE COMPLETE.
   §  364.  TIME  FOR  DETERMINATION.  1.  FOLLOWING  THE SUBMISSION OF A
 COMPLETED APPLICATION CONTAINING THE INFORMATION AND DOCUMENTS CONTAINED
 IN THE LIST REQUIRED TO BE MAINTAINED AND PROVIDED PURSUANT  TO  SECTION
 THREE  HUNDRED  SIXTY-TWO  OF  THIS ARTICLE AND ANY ADDITIONAL MATERIALS
 REQUESTED FOR CLARIFICATION, A COOPERATIVE CORPORATION  SHALL  INFORM  A
 PROSPECTIVE PURCHASER WHETHER ITS CONSENT TO A SALE IS GRANTED OR WHETH-
 ER ITS CONSENT TO A SALE IS DENIED WITHIN FORTY-FIVE DAYS.
   2.  THE TIME PERIOD PROVIDED IN SUBDIVISION ONE OF THIS SECTION MAY BE
 EXTENDED AT ANY TIME WITH THE CONSENT OF THE PROSPECTIVE PURCHASER.  THE
 COOPERATIVE  CORPORATION SHALL BE ENTITLED TO ONE FOURTEEN DAY EXTENSION
 WITHOUT THE CONSENT  OF  THE  PURCHASER  AFTER  SENDING  NOTICE  TO  THE
 PROSPECTIVE  PURCHASER  VIA  REGISTERED  MAIL  WITHIN FORTY-FIVE DAYS OF
 RECEIVING A COMPLETED APPLICATION.
   3. IF AFTER THE FORTY-FIVE DAY PERIOD FOR DETERMINATION AND ANY APPLI-
 CABLE EXTENSIONS, THE COOPERATIVE CORPORATION DOES NOT ACT ON AN  APPLI-
 CATION, A PROSPECTIVE PURCHASER MAY INFORM THE BOARD OF SUCH CORPORATION
 THAT  IF NO ACTION IS TAKEN WITHIN TEN DAYS THEN THE FAILURE TO ACT WILL
 CONSTITUTE CONSENT BY THE COOPERATIVE CORPORATION TO THE SALE.
   4. IF NO ACTION IS TAKEN FOLLOWING THE TEN DAY NOTICE PERIOD  PURSUANT
 TO  SUBDIVISION THREE OF THIS SECTION, THE COOPERATIVE CORPORATION SHALL
 BE DEEMED TO HAVE CONSENTED TO THE SALE.
   5. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO  PROHIBIT  A  COOPER-
 ATIVE  CORPORATION  FROM  LAWFULLY  DENYING ITS CONSENT TO A SALE AT ANY
 TIME PRIOR TO THE EXPIRATION OF THE FORTY-FIVE DAY DETERMINATION  PERIOD
 AND TEN DAY NOTICE PERIOD.
   § 365. TOLLING OF TIME. IF A COOPERATIVE CORPORATION'S BOARD OF DIREC-
 TORS  HAS PLACED A MEMORANDUM OR OTHER WRITING IN ITS FILES STATING THAT
 SUCH BOARD DOES NOT ORDINARILY MEET IN THE MONTHS OF  JULY  AND  AUGUST,
 THEN SUCH BOARD OF DIRECTORS OR MANAGING AGENT SHALL HAVE SIXTY CALENDAR
 DAYS  OR UNTIL THE TENTH OF SEPTEMBER, WHICHEVER IS LATER, AFTER RECEIV-
 ING AN APPLICATION TO ACKNOWLEDGE RECEIPT THEREOF AND BEGIN THE DETERMI-
 NATION PROCESS FOR ANY APPLICATION RECEIVED ON OR AFTER JULY  FIRST  BUT
 BEFORE SEPTEMBER TENTH OF ANY CALENDAR YEAR.
   §  366.  CONSTRUCTION.  NOTHING  IN THIS ARTICLE SHALL BE CONSTRUED OR
 INTERPRETED TO LIMIT OR RESTRICT THE RIGHTS AND REMEDIES GRANTED BY  ANY
 OTHER PROVISION OF LAW.
   § 3. This act shall take effect on the one hundred twentieth day after
 it shall have become a law and shall apply to applications submitted and
 received  on or after such date; provided, however, that effective imme-
 diately the state commissioner of human rights is authorized to take any
 actions necessary prior to such effective date for the implementation of
 the provisions of this act on its  effective  date  including,  not  not
 limited to, establishing guidelines and promulgating rules.