The Housing Stability and Tenant Protection Act was enacted recently in New York State to protect millions of tenants in rental properties but it also affects coops because of the landlord-tenant relationship with owners. The Act imposes the following on all landlords, including coops:

1. Landlords can’t get fees and other charges including late fees and attorney’s fees in Housing Court (only maintenance) and have to start separate civil actions to recover those.
2. Security deposits are limited to one month’s rent/maintenance. Escrows of substantial maintenance as a condition to a coop board’s approval of a purchaser are not possible.
3. Late Fees cannot exceed $50 or 5 percent of monthly rent/maintenance, whichever is less. If coop’s governing documents provide for higher late fees, they will be uncollectible.
4. Purchase Application fees could be limited to $20. The New York Department of State issued a memorandum in September 2019 excluding coops regarding this provision but until the law is changed, it is risky to charge the typical application fee which is usually much more than $20.
5. An Extra 5-Days Certified-Mail Notice is Required after Nonpayment. So, if a tenant/shareholder does not pay rent/maintenance within five days of when it is due, the landlord/coop must send a notice by certified mail. 
6. Tenant/Shareholder could argue “Extreme” hardship to get out of a non-payment judgment of possession for up to one year.  So, if the tenant/shareholder stops paying and the landlord/coop sues and gets a judgment of possession, the tenant/shareholder can argue for up to a year more of possession. 

Until the law is changed, coop boards must be aware of these new limitations and restrictions.