As you may be aware, certain legislation was passed in 2019 significantly limiting the ability of building owners to convert their buildings to condominiums by requiring, among other things, such owners to sell at least fifty one percent (51%) of units to bona fide tenants in occupancy. Assembly Bill A8809/Senate Bill S8564, which was signed on December 16, 2022 by New York Governor Kathy Hochul and becomes effective 90 days from the date of signing, revises those requirements specifically for condominium conversion projects which meet the following criteria: (i) the building contains five or fewer units, and (ii) the building owner offers the unit that they or their immediate family member have occupied for at least two years. With regard to such buildings, the offering plan may be declared effective upon the execution and delivery of written purchase agreements for at least fifteen percent (15%) of all dwelling units in the building subscribed for by bona fide tenants in occupancy or bona fide purchasers who represent that they intend that they or one or more members of their immediate family occupy the dwelling unit when it becomes vacant. Our firm is in communication with the Department of Law to obtain clarification regarding the application of this new legislation to projects in which the building owner is an entity.
This is an encouraging development, since the unanimous passage of this legislation and its signing into law by our governor suggests that our lawmakers and governor are reconsidering at least some of the onerous burdens on building owners’ rights to convert to condominium ownership caused by the 2019 legislation. As such, we are hopeful that this is the first step in correcting the 2019 legislation and promoting the condominium conversion market. If you would like to further discuss this update to the legislation, please contact Shaun W. Pappas, Esq. at 212-620-2684 or spappas@starr-lawfirm.com.