New NYC Law Imposes Strict Timelines On Co-op Purchase Applications

Intro. 1120-B: Mandatory Review Periods Take Effect July 2026

For decades, New York City cooperative boards have operated without statutorily defined timeframes for reviewing purchase applications. Prospective purchasers often faced indefinite waiting periods, resulting in expired mortgage rate locks and extended carrying costs for sellers.

This regulatory landscape will shift significantly this summer. On January 29, 2026, the New York City Council overrode former Mayor Eric Adams's veto to enact Intro. 1120-B. The new law imposes mandatory deadlines for the acknowledgment and review of purchase applications and other transfers requiring board approval (including assignments, trust transfers, gifts, and devises) by cooperative corporations.

The law takes effect on or about July 28, 2026 (180 days after enactment) and applies to all purchase applications submitted on or after that date.

Applicability and Scope

The law applies to cooperative corporations with 10 or more residential units.

Condominiums are not subject to this law. Additionally, the statute expressly excludes:

• Housing Development Fund Companies (HDFCs);
• Cooperatives supervised by governmental housing agencies; and
• Buildings with fewer than 10 dwelling units.

Key Definition: The statute defines "cooperative corporation" to include not only the board of directors but also the managing agent. Consequently, managing agents bear direct statutory responsibility for compliance and cannot rely solely on the board's directives to avoid liability.

The New Compliance Framework

The law establishes a structured three-step process for handling applications:

1. Standardization of Requirements

Every covered cooperative must maintain a standardized application package and a comprehensive list of all documents and information required for a purchase. These materials must be provided promptly to a prospective purchaser, their agent, or the seller upon request.

2. Acknowledgment of Receipt (15 Days)

Within 15 days of receiving an application, the cooperative must provide the applicant with a written acknowledgment sent via both email and registered mail. The notice must state whether the application is complete or, if not, explicitly identify the missing items.

• "Deemed Complete" Provision: If the cooperative fails to send this acknowledgment within 15 days, the application is automatically deemed complete. This immediately triggers the commencement of the 45-day decision period.

3. Decision (45 Days)

Within 45 days after an application is complete (or deemed complete), the board must notify the applicant via email whether consent to the sale is granted, granted with conditions, or denied. The board may also request additional materials from the purchaser for clarification or completion of previously submitted materials at any point during this period.

• Extensions: The purchaser may consent to an extension. Alternatively, the board may unilaterally extend the deadline once by up to 14 days, provided it sends email notice before the original deadline expires.
• Procedural Note: While the Step 2 acknowledgment requires registered mail, the Step 3 decision notice requires only email.

Summer Recess Tolling

Recognizing that many boards do not meet during the summer, the statute provides a tolling mechanism. If a cooperative formally adopts a written "summer recess notice" identifying specific dates in July and August when the board does not meet, any 15-day or 45-day deadline that would otherwise fall during that period is tolled. Boards intending to utilize this provision must ensure the notice is formally documented and available upon request prior to the law's effective date.

Enforcement and Penalties

Enforcement is vested in the Department of Housing Preservation and Development (HPD), with adjudications heard at the Office of Administrative Trials and Hearings (OATH). Violations carry civil penalties of:

• $1,000 for a first violation;
• $1,500 for a second violation; and
• $2,000 for subsequent violations.

Note: Earlier iterations of the bill included provisions for automatic "deemed approval" of the sale and a private right of action for attorney's fees. These were removed from the final enacted text; however, the statute preserves all other existing rights and remedies available to parties under law.

Next Steps for Boards and Agents

With approximately five months until the effective date, boards and managing agents should prioritize the following:

• Review Application Packages: Ensure application materials are standardized, complete, and clearly organized to minimize the risk of initial deficiencies.
• Implement Tracking Systems: Managing agents should establish strict calendaring protocols to track receipt dates and deadlines, particularly given their direct liability.
• Adopt Recess Policies: Boards that break for the summer should formally adopt compliant summer recess notices now to ensure tolling protection is in place for July 2026.
• Protocol Formalization: Establish clear internal procedures for issuing the required acknowledgments via registered mail and decisions via email within the statutory windows.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.