Co-Ops and Condos Are Exempt From Good Cause Eviction Law

Good Cause Eviction bills have been bouncing around Albany for years, and most co-op and condo boards have viewed them as a bad idea, one more unwelcome governmental intrusion. The state Legislature has finally passed a Good Cause Eviction bill, but it is limited in scope and, crucially, it will not apply to co-ops and condos.

The Queens-based Presidents Co-op and Condo Council (PCCC) called this provision in the new state budget a "substantial victory."

In a statement, the PCCC said: "This bill has been languishing for years, and in the previous iteration of the bill co-ops and condos were included as a covered housing accommodation. The bill as originally written would be disastrous for co-ops and condos. It was another in a long line of proposed legislation where the legislators failed to recognize the distinction between a co-op and a landlord-tenant rental relationship. We acted promptly and vociferously to our elected officials, and our voice was heard."

The confusion referred to by the PCCC stems from the fact that co-operative shareholders, unlike condo unit-owners, do not own real property. Instead, they own shares in the co-op corporation, and they have a landlord-tenant relationship with the co-op board. In numerous past instances, that has caused legislators to lump co-ops under regulations governing rental properties

Specifically, the PCCC cited the advocacy of state Sens. Toby Stavisky, John Liu and Julia Salazar as well as Assembly member Ed Braunstein. All are Democrats representing districts in Queens and parts of Brooklyn.

Under the Good Cause Eviction law, which goes into effect immediately, landlords can evict rental tenants only if they are guilty of specific violations, including non-payment of rent, illegal use of the premises and substantial damage to the property. The law requires a landlord to obtain a court order before removing a tenant and it sets caps on rent increases, but it allows landlords to raise rents to cover increases in taxes and the cost of "significant" repairs.

Despite these constraints, the long-debated law is expected to have a major impact on rental properties across New York State. As the law firm Nixon Peabody writes in a newsletter: "The extensive requirements of Good Cause will dramatically alter the rental housing landscape in New York City, and possibly, the state, as other villages, towns, or cities state-wide opt-in. Although legislators secured various exemptions to the law, its scope remains broad."