New York Senate Bill S02433

New York 2025-2026 Regular Session

• Introduced: 1/17/25
• Refer: 1/17/25
• Engrossed: 6/9/25
• Refer: 6/9/25
• Refer: 1/7/26

Caption

Establishes certain rights upon the expiration of ground lease residential cooperative apartment buildings.

Summary

S02433 would create a set of rights and procedures for residents of ground lease residential cooperative apartment buildings when the underlying ground lease expires or is terminated. Within 10 days of expiration or termination, the cooperative would be required to begin dissolution/deconversion of the cooperative under the laws governing its formation. Residents who were entitled to occupy the building immediately before deconversion would be treated as tenants, and the ground lease owner would have to offer rental leases under the Emergency Tenant Protection Act, the Rent Stabilization Law, or New York City’s good cause eviction law, as applicable. The bill also addresses financing and sale rights during the life of a ground lease cooperative. It would allow the cooperative to encumber its interest in the ground lease unless the lease expressly prohibits it, and if consent is required, the owner could refuse only for reasonable cause and must explain the refusal in writing. In addition, if the ground lease owner markets the property or receives a bona fide offer to sell, the cooperative would receive a right of first refusal/right to purchase the property on the same terms, with notice requirements, response deadlines, and limited exceptions for financing transactions and eminent domain. The bill also sets the initial rent after deconversion by reference to the most recent legal regulated rent, adjusted by lawful rent guideline increases, or by DHCR-determined data if records are unavailable.

Impact

This bill would amend the Real Property Law, the Emergency Tenant Protection Act of 1974, and the New York City rent stabilization provisions to create a new statutory framework for ground lease residential cooperatives. It would impose new obligations on ground lease owners and cooperatives regarding deconversion, tenant status after deconversion, rent-setting, consent to encumbrances, and notice and purchase rights when the underlying property is sold. The measure would apply immediately to existing and future leases, with the New York City rent-stabilization amendment tied to the expiration of that local law.

Sentiment

The available voting history suggests the bill had meaningful but not overwhelming support. It passed the Senate Judiciary Committee by a narrow 10-9 vote and later passed the Senate floor by a larger 34-27 margin, indicating that the measure was supported by a majority but remained politically divided. The bill’s advancement through committee and floor passage shows sustained support from proponents, while the close committee vote and substantial floor opposition indicate continued concern among some senators.

Contention

The main points of contention likely center on the bill’s expansion of rights for cooperative residents and the corresponding limits it places on ground lease owners. Supporters appear to favor protections for residents facing deconversion, rent stabilization treatment, and a cooperative right to buy the land, while opponents may view the bill as intruding on private contract rights and property-owner discretion. The provisions requiring owners to provide written reasons for refusing consent to encumbrances, and the mandatory right of first refusal/right to purchase on sale, are likely the most disputed features because they directly constrain owner control over financing and disposition of the property.