S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1177
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              January 8, 2025
                                ___________
 
 Introduced  by  Sen. MATTERA -- 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  transition  of
   control of certain homeowners' associations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The real property law is amended by adding a new article 16
 to read as follows:
                                ARTICLE 16
               TRANSITION TO HOMEOWNERS' ASSOCIATION CONTROL
 SECTION 500. TRANSITION TO HOMEOWNERS' ASSOCIATION CONTROL.
         501. DEFINITIONS.
   § 500. TRANSITION TO HOMEOWNERS' ASSOCIATION CONTROL.  1.  HOMEOWNERS,
 OTHER  THAN THE REAL ESTATE DEVELOPER OF A RESIDENTIAL HOUSING COMMUNITY
 ARE ENTITLED TO ELECT AT LEAST A MAJORITY OF THE MEMBERS OF THE BOARD OF
 DIRECTORS OF THE HOMEOWNERS' ASSOCIATION WHEN THE EARLIER OF THE FOLLOW-
 ING EVENTS OCCURS:
   (A) THREE MONTHS AFTER NINETY PERCENT OF THE PARCELS IN ALL PHASES  OF
 THE  RESIDENTIAL  HOUSING  COMMUNITY THAT WILL ULTIMATELY BE OPERATED BY
 THE HOMEOWNERS' ASSOCIATION HAVE BEEN CONVEYED TO MEMBERS OTHER THAN THE
 DEVELOPER;
   (B) SUCH OTHER PERCENTAGE OF THE PARCELS HAS BEEN CONVEYED TO MEMBERS,
 OR SUCH OTHER DATE OR EVENT HAS OCCURRED, AS IS SET FORTH IN  THE  ARTI-
 CLES OF INCORPORATION AND BYLAWS OF THE HOMEOWNERS' ASSOCIATION IN ORDER
 TO  COMPLY  WITH THE REQUIREMENTS OF ANY GOVERNMENTALLY CHARTERED ENTITY
 WITH REGARD TO THE MORTGAGE FINANCING OF PARCELS;
   (C) UPON THE DEVELOPER ABANDONING OR DESERTING ITS  RESPONSIBILITY  TO
 MAINTAIN  AND  COMPLETE  THE AMENITIES OR INFRASTRUCTURE AS DISCLOSED IN
 THE ARTICLES OF INCORPORATION AND BYLAWS OF THE HOMEOWNERS' ASSOCIATION.
 THERE IS A REBUTTABLE PRESUMPTION THAT THE DEVELOPER HAS  ABANDONED  AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03711-01-5
 S. 1177                             2
              

 
 DESERTED THE PROPERTY IF THE DEVELOPER HAS UNPAID ASSESSMENTS OR GUARAN-
 TEED AMOUNTS A PERIOD OF MORE THAN TWO YEARS;
   (D)  UPON  THE  DEVELOPER  FILING  A PETITION SEEKING PROTECTION UNDER
 CHAPTER SEVEN OF THE FEDERAL BANKRUPTCY CODE;
   (E) UPON THE DEVELOPER LOSING TITLE TO THE PROPERTY THROUGH A FORECLO-
 SURE ACTION OR THE TRANSFER OF A DEED IN LIEU OF FORECLOSURE, UNLESS THE
 SUCCESSOR OWNER HAS ACCEPTED  AN  ASSIGNMENT  OF  DEVELOPER  RIGHTS  AND
 RESPONSIBILITIES FIRST ARISING AFTER THE DATE OF SUCH ASSIGNMENT; OR
   (F)  UPON  A  RECEIVER  FOR THE DEVELOPER BEING APPOINTED BY A CIRCUIT
 COURT AND NOT BEING DISCHARGED WITHIN THIRTY DAYS  AFTER  SUCH  APPOINT-
 MENT, UNLESS THE COURT DETERMINES WITHIN THIRTY DAYS AFTER SUCH APPOINT-
 MENT THAT TRANSFER OF CONTROL WOULD BE DETRIMENTAL TO THE ASSOCIATION OR
 ITS MEMBERS.
   2. (A) MEMBERS OF A HOMEOWNERS' ASSOCIATION, OTHER THAN THE DEVELOPER,
 ARE  ENTITLED  TO ELECT AT LEAST ONE MEMBER OF THE BOARD OF DIRECTORS OF
 THE HOMEOWNERS' ASSOCIATION IF FIFTY PERCENT OF THE PARCELS IN ALL PHAS-
 ES OF THE RESIDENTIAL HOUSING COMMUNITY WHICH WILL ULTIMATELY  BE  OPER-
 ATED  BY  THE  ASSOCIATION  HAVE BEEN CONVEYED TO MEMBERS OTHER THAN THE
 DEVELOPER. FOR PURPOSES OF THIS SECTION, THE TERM  "MEMBERS  OTHER  THAN
 THE  DEVELOPER"  SHALL  NOT INCLUDE BUILDERS, CONTRACTORS, OR OTHERS WHO
 PURCHASE A PARCEL FOR THE PURPOSE OF CONSTRUCTING  IMPROVEMENTS  THEREON
 FOR RESALE.
   (B)  THE  DEVELOPER  IS  ENTITLED  TO ELECT AT LEAST ONE MEMBER OF THE
 BOARD OF DIRECTORS OF THE HOMEOWNERS' ASSOCIATION AS LONG AS THE  DEVEL-
 OPER  HOLDS  FOR  SALE  IN THE ORDINARY COURSE OF BUSINESS AT LEAST FIVE
 PERCENT OF THE PARCELS IN ALL PHASES OF THE RESIDENTIAL HOUSING COMMUNI-
 TY. AFTER THE DEVELOPER RELINQUISHES CONTROL OF THE HOMEOWNERS'  ASSOCI-
 ATION,  THE DEVELOPER MAY EXERCISE THE RIGHT TO VOTE ANY DEVELOPER-OWNED
 VOTING INTERESTS IN THE SAME MANNER AS  ANY  OTHER  MEMBER,  EXCEPT  FOR
 PURPOSES  OF  REACQUIRING  CONTROL  OF  THE  HOMEOWNERS'  ASSOCIATION OR
 SELECTING THE MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS.
   3. AT THE TIME THE MEMBERS ARE ENTITLED TO ELECT AT LEAST  A  MAJORITY
 OF  THE BOARD OF DIRECTORS OF THE HOMEOWNERS' ASSOCIATION, THE DEVELOPER
 SHALL, AT THE DEVELOPER'S EXPENSE,  WITHIN  NO  MORE  THAN  NINETY  DAYS
 DELIVER THE FOLLOWING DOCUMENTS TO THE BOARD:
   (A) ALL DEEDS TO COMMON PROPERTY OWNED BY THE ASSOCIATION;
   (B)  THE  ORIGINAL  OF THE ASSOCIATION'S DECLARATIONS OF COVENANTS AND
 RESTRICTIONS;
   (C) A CERTIFIED COPY OF THE ARTICLES OF INCORPORATION OF  THE  ASSOCI-
 ATION;
   (D) A COPY OF THE BYLAWS;
   (E) THE MINUTE BOOKS, INCLUDING ALL MINUTES;
   (F) THE BOOKS AND RECORDS OF THE ASSOCIATION;
   (G) POLICIES, RULES, AND REGULATIONS, IF ANY, WHICH HAVE BEEN ADOPTED;
   (H)  RESIGNATIONS  OF DIRECTORS WHO ARE REQUIRED TO RESIGN BECAUSE THE
 DEVELOPER IS REQUIRED TO RELINQUISH CONTROL OF THE ASSOCIATION;
   (I) THE FINANCIAL RECORDS OF THE ASSOCIATION FROM THE DATE OF INCORPO-
 RATION THROUGH THE DATE OF TURNOVER;
   (J) ALL ASSOCIATION FUNDS AND CONTROL THEREOF;
   (K) ALL TANGIBLE PROPERTY OF THE ASSOCIATION;
   (L) A COPY OF ALL CONTRACTS WHICH MAY BE IN FORCE WITH THE ASSOCIATION
 AS ONE OF THE PARTIES;
   (M) A LIST OF THE NAMES AND ADDRESSES AND  TELEPHONE  NUMBERS  OF  ALL
 CONTRACTORS,  SUBCONTRACTORS,  OR  OTHERS  IN  THE CURRENT EMPLOY OF THE
 ASSOCIATION;
   (N) ANY AND ALL INSURANCE POLICIES IN EFFECT;
 S. 1177                             3
 
   (O) ANY PERMITS ISSUED TO THE ASSOCIATION BY GOVERNMENTAL ENTITIES;
   (P) ANY AND ALL WARRANTIES IN EFFECT;
   (Q)  A  ROSTER OF CURRENT HOMEOWNERS AND THEIR ADDRESSES AND TELEPHONE
 NUMBERS AND SECTION AND LOT NUMBERS;
   (R) EMPLOYMENT AND SERVICE CONTRACTS IN EFFECT;
   (S) ALL OTHER CONTRACTS IN EFFECT TO WHICH THE ASSOCIATION IS A PARTY;
 AND
   (T) THE FINANCIAL RECORDS, INCLUDING FINANCIAL STATEMENTS OF THE ASSO-
 CIATION, AND SOURCE DOCUMENTS FROM THE INCORPORATION OF THE  ASSOCIATION
 THROUGH  THE  DATE OF TURNOVER. THE RECORDS SHALL BE AUDITED BY AN INDE-
 PENDENT CERTIFIED PUBLIC ACCOUNTANT FOR THE  PERIOD  FROM  THE  INCORPO-
 RATION  OF THE ASSOCIATION OR FROM THE PERIOD COVERED BY THE LAST AUDIT,
 IF AN AUDIT HAS BEEN PERFORMED FOR EACH FISCAL YEAR SINCE INCORPORATION.
 ALL FINANCIAL STATEMENTS SHALL BE PREPARED IN ACCORDANCE WITH  GENERALLY
 ACCEPTED  ACCOUNTING  PRINCIPLES AND SHALL BE AUDITED IN ACCORDANCE WITH
 GENERALLY ACCEPTED AUDITING STANDARDS. THE CERTIFIED  PUBLIC  ACCOUNTANT
 PERFORMING  THE  AUDIT  SHALL EXAMINE TO THE EXTENT NECESSARY SUPPORTING
 DOCUMENTS AND RECORDS, INCLUDING THE CASH DISBURSEMENTS AND RELATED PAID
 INVOICES TO DETERMINE IF EXPENDITURES WERE FOR ASSOCIATION PURPOSES  AND
 THE  BILLINGS,  CASH RECEIPTS, AND RELATED RECORDS OF THE ASSOCIATION TO
 DETERMINE THAT THE DEVELOPER WAS CHARGED AND PAID THE PROPER AMOUNTS  OF
 ASSESSMENTS.
   § 501. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
   1.  "RESIDENTIAL HOUSING COMMUNITY" MEANS THE REAL PROPERTY THAT IS OR
 WILL BE SUBJECT TO A DECLARATION OF COVENANTS WHICH IS RECORDED  IN  THE
 COUNTY  WHERE  THE  PROPERTY  IS  LOCATED. THE TERM "RESIDENTIAL HOUSING
 COMMUNITY" INCLUDES ALL REAL  PROPERTY,  INCLUDING  UNDEVELOPED  PHASES,
 THAT  IS OR WAS THE SUBJECT OF A DEVELOPMENT-OF-REGIONAL-IMPACT DEVELOP-
 MENT ORDER, TOGETHER WITH ANY APPROVED MODIFICATION THERETO.
   2. "DEVELOPER" MEANS A PERSON OR ENTITY THAT:
   (A) CREATES THE RESIDENTIAL HOUSING COMMUNITY SERVED  BY  THE  ASSOCI-
 ATION; OR
   (B)  SUCCEEDS  TO  THE  RIGHTS AND LIABILITIES OF THE PERSON OR ENTITY
 THAT CREATED THE RESIDENTIAL HOUSING COMMUNITY  SERVED  BY  THE  ASSOCI-
 ATION, PROVIDED THAT SUCH IS EVIDENCED IN WRITING.
   3.  "HOMEOWNERS' ASSOCIATION" OR "ASSOCIATION" MEANS A NEW YORK CORPO-
 RATION RESPONSIBLE FOR THE OPERATION OF A RESIDENTIAL HOUSING  COMMUNITY
 OR  A  MOBILE HOME SUBDIVISION IN WHICH THE VOTING MEMBERSHIP IS MADE UP
 OF PARCEL OWNERS OR THEIR AGENTS, OR A COMBINATION THEREOF, AND IN WHICH
 MEMBERSHIP IS A MANDATORY CONDITION OF PARCEL OWNERSHIP,  AND  WHICH  IS
 AUTHORIZED  TO  IMPOSE ASSESSMENTS THAT, IF UNPAID, MAY BECOME A LIEN ON
 THE PARCEL. THE TERM "HOMEOWNERS' ASSOCIATION" DOES NOT INCLUDE A COMMU-
 NITY DEVELOPMENT DISTRICT  OR  OTHER  SIMILAR  SPECIAL  TAXING  DISTRICT
 CREATED PURSUANT TO STATUTE.
   §  2.  This  act  shall take effect on the sixtieth day after it shall
 have become a law.