Department of State Issues Guidance Exempting Co-ops from Limits on “Application Fees”
The NYS Department of State has just issued “Guidance for Real Estate Professionals” regarding the Housing Stability Act. One of the Q&A’s reads as follows:
“DOES THE ACT RESTRICT APPLICATION FEES FOR RENTALS?
“Yes…. Under the Act a ‘landlord, lessor, sub-lessor or grantor’ is now prohibited from collecting an application fee greater than $20.00…[However,] the $20.00 limit does not apply under the following circumstances:
- When the property being sold including within a COOP
- Application fees imposed by a COOP/Condo Board (i.e., fees
charged by persons other than the unit owner);”
Co-ops and managing agents can breathe again. The DOS guidance allows Boards and agents to charge purchase application and processing fees without fear of violating the Act. The mass rewriting of Purchase and Lease applications by Co-ops, and mass fee-shifting from applicants to sellers can cease.
DOS adds that “Licensed brokers and agents with questions about the Act may contact the Department at: firstname.lastname@example.org or contact 518-474-4429.”
Note that this Guidance does not affect the limitations on late charges, the prohibitions on refusing to lease to someone based on “prior disputes” with the landlord, the cost of credit checks, and security deposits.
The Guidance can be accessed using the link below: