STATE OF NEW YORK ________________________________________________________________________ 494 2021-2022 Regular Sessions IN SENATE (Prefiled) January 6, 2021 ___________ Introduced by Sens. KRUEGER, HOYLMAN, LIU, MAYER -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the executive law, in relation to creating the office of the cooperative and condominium ombudsman; to amend the tax law, in relation to authorizing the residential unit fee; and to amend the state finance law, in relation to establishing the office of the coop- erative and condominium ombudsman fund The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The executive law is amended by adding a new article 49-C 2 to read as follows: 3 ARTICLE 49-C 4 OFFICE OF THE COOPERATIVE AND CONDOMINIUM OMBUDSMAN 5 Section 996. Short title. 6 996-a. Legislative declaration. 7 996-b. Definitions. 8 996-c. Office of the cooperative and condominium ombudsman. 9 996-d. Functions, powers and duties of the office. 10 996-e. Principal office and satellite offices. 11 996-f. Assistance of other state agencies. 12 996-g. Reports to the governor, attorney general and the legis- 13 lature. 14 996-h. Contract authority. 15 996-i. Separability. 16 § 996. Short title. This article shall be known and may be cited as 17 the "cooperative and condominium ombudsman act". 18 § 996-a. Legislative declaration. The legislature finds and determines 19 as follows: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01487-01-1S. 494 2 1 Cooperative and condominium housing constitutes a significant portion 2 of New York state's residential housing stock. It is and has been the 3 public policy of this state to encourage such forms of home ownership. A 4 wide variety of laws have been enacted to provide fairness in the 5 conversion of rental properties to cooperative and condominium ownership 6 and in the regulation and taxation of cooperatives and condominiums. 7 State and local laws and regulations are also designed to ensure that 8 the residents of such housing are provided with safe and habitable 9 accommodations. 10 Inevitably, disputes have arisen among cooperative and condominium 11 sponsors and developers, cooperative shareholders and condominium unit 12 owners, prospective shareholders and unit owners, boards of directors 13 and boards of managers. Such disputes often result in lengthy and costly 14 litigation and uncertainty as to the rights of the parties pending the 15 outcome of litigation. Such litigation diverts resources that could be 16 better utilized to provide affordable and well-maintained buildings and 17 grounds for the common good of the owners. 18 This article is necessary to provide a neutral, informative and acces- 19 sible resource available to all parties involved in residential cooper- 20 ative and condominium ownership and governance. The ombudsman appointed 21 pursuant to this article will conduct outreach programs to educate unit 22 owners and board members as to their legal rights and responsibilities. 23 The ombudsman will encourage alternative dispute resolution when 24 disputes do arise. The ombudsman will be available to provide dispute 25 resolution services on consent of the parties. The ombudsman will also 26 provide monitoring and supervision of cooperative and condominium 27 elections. 28 § 996-b. Definitions. 1. "Cooperative" means a corporation organized 29 and operating pursuant to the general business law or the cooperative 30 corporations law for the primary purpose of providing residential hous- 31 ing to its shareholders. 32 2. "Condominium" means a homeowners association or any association 33 organized and operating pursuant to article nine-B of the real property 34 law for the primary purpose of providing residential housing to its unit 35 owners. 36 3. "Office" means the office of the cooperative and condominium 37 ombudsman created by this article. 38 4. "Ombudsman" means the chief administrative officer of the office of 39 the cooperative and condominium ombudsman. 40 5. "State agency" means any department, board, bureau, commission, 41 division, office, council or agency of the state, or a public benefit 42 corporation or authority authorized by the laws of the state. 43 6. "Local agency" means any department, board, bureau, commission, 44 division, office, council, officer or agency of a city, town or village. 45 § 996-c. Office of the cooperative and condominium ombudsman. 1. The 46 office of the cooperative and condominium ombudsman is hereby created 47 within the department of law to have and exercise the functions, powers 48 and duties provided by the provisions of this article and any other 49 provision of law. The attorney general shall be responsible for over- 50 sight of the office. 51 2. The head of the office shall be the cooperative and condominium 52 ombudsman who shall be appointed by the attorney general. The ombudsman 53 shall hold office until the end of the term of the attorney general by 54 whom he or she was appointed and until his or her successor is appointed 55 and has qualified. The ombudsman may be removed by the attorney generalS. 494 3 1 for cause, after being given an opportunity to be heard. A vacancy shall 2 be filled in the same manner as the original appointment. 3 3. The ombudsman shall receive an annual salary to be fixed by the 4 attorney general within the amount made available therefor by an appro- 5 priation and shall be allowed his or her actual and necessary expenses 6 in the performance of his or her duties. The ombudsman's salary shall be 7 no less than the salaries of certain state officers holding the posi- 8 tions indicated in paragraph (a) of subdivision one of section one 9 hundred sixty-nine of this chapter. 10 4. The ombudsman shall be an attorney with extensive experience in 11 real estate, cooperative and condominium law and in conflict and alter- 12 native dispute resolution. 13 5. The ombudsman shall direct the work of the office and shall be the 14 chief executive officer of the office. The ombudsman may appoint such 15 officers and employees as he or she may deem necessary, prescribe their 16 powers and duties, fix their compensation and provide for the reimburse- 17 ment of their expenses, all within amounts made available therefor by 18 appropriation. Such officers and employees shall include attorneys and 19 other professionals with extensive experience in real estate, cooper- 20 ative and condominium law and in conflict and alternative dispute resol- 21 ution. 22 6. The ombudsman and officers and employees of the office shall adhere 23 to a code of ethics in order to inspire public confidence and trust in 24 the fairness and impartiality of the office. The ombudsman shall 25 prescribe such code of ethics. Such code shall require that the ombuds- 26 man and officers and employees of the office respect and comply with the 27 law; that they not use or attempt to use their positions to secure priv- 28 ileges or exemptions for themselves or others; that they not solicit, 29 accept or agree to accept any gifts or gratuities from persons having or 30 likely to have any official transaction with the office; that they not 31 request or accept any payment in addition to their regular compensation 32 for assistance given as part of their official duties; and that they 33 shall not perform any function in a manner that improperly favors any 34 person or party. 35 7. The ombudsman and officers and employees of the office shall not 36 serve as officers or employees of a political party or a club or organ- 37 ization related to a political party, receive remuneration for activ- 38 ities on behalf of any candidate for public office or party position or 39 engage in soliciting votes or other activities on behalf of a candidate 40 for public office or party position. 41 8. The secretary to the governor shall assure that all state agencies 42 provide the ombudsman with assistance in advancing the purposes of the 43 office and to assure that the activities of the office are fully coordi- 44 nated with the activities of state agencies providing related services. 45 § 996-d. Functions, powers and duties of the office. The office shall 46 have the following functions, powers and duties: 47 1. To educate and inform shareholders of cooperatives and unit owners 48 of condominiums, their boards of directors and boards of managers, prop- 49 erty managers, professionals working with and for such boards and other 50 interested parties of their legal rights and responsibilities under the 51 federal, state and local laws and regulations applicable to cooperative 52 and condominium housing in the state of New York and under the cooper- 53 ative and condominium documents governing the respective properties. 54 2. To coordinate and assist in the preparation and publication of 55 educational and reference materials about residential cooperatives andS. 494 4 1 condominiums, to make such resources known and available to the widest 2 possible audience. 3 3. To organize and conduct meetings, workshops, conferences, public 4 hearings and forums and to utilize all forms of communications media to 5 disseminate accurate and timely information of interest to persons 6 residing in, owning and managing cooperative and condominium housing. 7 4. To provide meetings, mediation, arbitration and other forms of 8 alternative dispute resolution services to cooperative and condominium 9 sponsors and developers, cooperative shareholders, condominium owners, 10 their boards of directors and managers, prospective shareholders and 11 unit owners and other parties so as to avoid costly and lengthy liti- 12 gation and reduce expenses for those involved in disputes. 13 5. To subpoena and enforce the attendance of witnesses, administer 14 oaths or affirmations and examine witnesses under oath and require the 15 production of any books and papers deemed relevant or material to the 16 resolution of any dispute pending before the office. 17 6. To engage with the housing courts, other trial courts, state and 18 local agencies and with alternative dispute resolution programs main- 19 tained by the office of court administration in order to provide 20 specialized expertise in the resolution of cooperative and condominium 21 disputes as an alternative to litigation. 22 7. To offer procedures, monitors and vote counting services to assure 23 fair elections for members of cooperative boards of directors and condo- 24 minium boards of managers. Fifteen percent of the total voting inter- 25 ests in a cooperative or condominium or shareholders or owners of six 26 residential units, whichever is greater, may petition the office to 27 attend and conduct an election of directors or managers. All costs asso- 28 ciated with the election monitoring process shall be paid by the cooper- 29 ative or condominium. 30 8. To refer any complaint received to the appropriate law enforcement 31 agency for prosecution, if deemed appropriate by the office. 32 9. To perform any other functions that are necessary or appropriate to 33 fulfill the duties and responsibilities of the office. 34 § 996-e. Principal office and satellite offices. The office shall 35 maintain its principal office in the city of New York and shall have 36 satellite offices in other locations within the state of New York where 37 there are significant concentrations of cooperative or condominium hous- 38 ing. 39 § 996-f. Assistance of other state agencies. To effectuate the 40 purposes of this article, the ombudsman may request and shall be enti- 41 tled to receive from any state agency, and the same are authorized to 42 provide, such assistance, services, facilities, and data as will enable 43 the office to carry out its functions, powers and duties, and such 44 temporarily or permanently assigned personnel as the director of the 45 budget may approve. 46 § 996-g. Reports to the governor, attorney general and the legisla- 47 ture. The office shall make an annual report, to be received on or 48 before January first, to the governor, attorney general and the legisla- 49 ture concerning the activities undertaken by the office, recommendations 50 for legislative proposals, data concerning program activities and other 51 pertinent information as may be required. 52 § 996-h. Contract authority. The office is hereby empowered to enter 53 into any agreement or contract with any state or local agency necessary 54 or convenient to carry out the provisions of this article. 55 § 996-i. Separability. If any clause, sentence, paragraph, section or 56 part of this article shall be adjudged by any court of competent juris-S. 494 5 1 diction to be invalid, such judgment shall not affect, impair or invali- 2 date the remainder thereof, but shall be confined in its operation to 3 the clause, sentence, paragraph, section or part thereof directly 4 involved in the controversy in which such judgment shall have been 5 rendered. 6 § 2. The tax law is amended by adding a new section 186-h to read as 7 follows: 8 § 186-h. Residential unit fee. A cooperative housing corporation or a 9 homeowners association, as such terms are defined in section two hundred 10 ten of this chapter, shall pay an annual fee of six dollars per year for 11 each residential unit located in a building or buildings owned or oper- 12 ated by such corporation or association. Such fee shall be payable to 13 the department. All revenue from the fee imposed pursuant to this 14 section shall be paid by the department to the state comptroller to be 15 deposited to and credited to the office of the cooperative and condomin- 16 ium ombudsman fund, established pursuant to section eighty-one-a of the 17 state finance law. 18 § 3. The state finance law is amended by adding a new section 81-a to 19 read as follows: 20 § 81-a. Office of the cooperative and condominium ombudsman fund. 1. 21 There is hereby established in the custody of the state comptroller a 22 special fund to be known as the "office of the cooperative and condomin- 23 ium ombudsman fund". 24 2. The office of the cooperative and condominium ombudsman fund shall 25 consist of monies appropriated thereto, funds transferred from any other 26 fund or sources, and monies deposited therein pursuant to section one 27 hundred eighty-six-h of the tax law. 28 3. The monies in the office of the cooperative and condominium ombuds- 29 man fund shall be kept separate from and shall not be commingled with 30 any other monies in the custody of the state comptroller. Such monies 31 shall be allocated to and expended by the department of law solely for 32 the staffing and administration of the office of the cooperative and 33 condominium ombudsman of such department. 34 § 4. This act shall take effect on the one hundred eightieth day after 35 it shall have become a law.