The New York real estate industry has been confronted with the most sweeping and aggressive tenant protections in the state’s history under the 2019 Tenant Protection Act. While the new rules are generally aimed at protecting renters, they also stand to have a significant impact on New York City’s condos and co-ops, specifically with regard to conversions.
 
Under the new laws, eviction plans are eliminated and “non-eviction” plans now require that 51 percent of tenants in occupancy agree to purchase their apartments before the conversion can be declared effective. This is a momentous leap from the previous requirement of only 15 percent of tenants. Moreover, market-rate senior citizens and disabled tenants who do not purchase their apartments may not be evicted unless there is “good cause.” It still remains to be seen what will constitute “good cause” however, the legislature has declared that failure to pay an “unconscionable” rent increase will not constitute “good cause.”
 
Additionally, non-purchasing tenants in conversions will now be given additional time to exercise their exclusive right to purchase the shares in the co-op or the condo unit on the same terms and conditions contained in a contract executed by a bona fide purchaser. The period now tacks on six months to the end of the normal 90-day period giving non-purchasing tenants wide latitude to delay making a decision.
 
In light of the fact that the new laws make conversions substantially more difficult, it is possible New York City will see a considerable decline in the number of condo to co-op conversions, and an increase in a host of other legal issues.