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Queens Chronicle

Pols, residents call for co-op relief

Bills to fix unintended consequences of new housing reforms due in Jan.

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Posted: Thursday, November 14, 2019 10:30 am | Updated: 12:39 pm, Thu Nov 21, 2019.

Passage of the state’s Housing Stability and Tenant Protection Act back in June was intended to protect tenants in traditional tenant-landlord relationships.

But it also had the unintended consequence of harming tenant-shareholders of co-operative units, who are uniquely both tenants and landlords of their own homes.

A pair of bills aimed at tweaking the law to mitigate the harm will be introduced by members of the Queens delegation to Albany when the new legislative session begins in January.

On Nov. 7, numerous elected officials and co-op/condominium owner advocates gathered in Bay Terrace to rally support for passage of the Co-op Clarification Bill (S6770 / A8718).

“The Housing Stability and Tenant Protection Act of 2019 was probably never intended to apply to co-ops but rather to commercial rental properties where there is a classic landlord-tenant relationship,” said Bob Friedrich, president of Glen Oaks Village. “Unfortunately, the legislation was poorly drafted and does not distinguish between profit-generating commercial entities and nonprofit residential co-ops.”

He said the law needs to be amended to make it less difficult for seniors seeking to downsize and young families with limited finances to buy a co-op apartment.

In cooperatives people buy shares in an apartment corporation. Ownership entitles the purchaser to a long-term proprietary lease to an apartment. Owners are often referred to as “tenant-shareholders” and are, in essence, simultaneously tenants and their own landlords.

“There became this bit of ambiguity and our bill really here is to clarify the point that co-op owners and co-op boards and management are not part of the Tenant Protection laws that we currently passed,” said state Sen. John Liu (D-Bayside). “We were even fearful that maybe some of the provisions in the Tenant Protection laws would endure in the long-run, actually weaken the finances of the very constituents that we seek to protect.”

Assemblyman Ed Braunstein (D-Bayside) said some aspects of the Tenant Protection Act could potentially limit security deposits and the amount of money that a co-op could charge to do an effective background check

He said some provisions meant to restore equity in landlord/tenant relationships conflict with proprietary leases and potentially increase the costs of co-op management.

Assemblywoman Aravella Simotas (D-Astoria) said the bills are merely “ a small clarification.” Assemblyman Daniel Rosenthal (D-Flushing) also supports the bills.

Warren Schreiber, co-president of the Co-op & Condo Council along with Friedrich, said that in Queens, co-ops and condominiums are a matter of affordable housing for middle-income families

“One of the problems with this (Tenant Law) is there will be some people who will no longer qualify for co-operative housing,” Schreiber said. “Sometimes when we have applicants who might be on the borderline of meeting our financial security, what we will do is to guarantee we would get our money, we would take six months’ of maintenance and put it into an escrow account. Then as long as everything is good and as long as all the payments have been made on time, after six months, that money will go back to the shareholder.”

Without the Co-op Clarification Bill, he said, a co-op board would be prevented from offering such a solution to a prospective co-op owner.

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1 comment:

  • stan chaz posted at 3:48 pm on Thu, Nov 14, 2019.

    stan chaz Posts: 33

    [wink] On the other hand, should co-op boads and management have the “freedom” to do whatever they want with regard to their tenant/owners? Just asking.