Regulations Pose Challenges for Condos and Co-ops
4.28.2025
In my time acting as outside general counsel to cooperative and condominium boards, I have become increasingly convinced that the job has been getting harder and harder. Admittedly, this feeling could be just a variation on the so-called Socratic paradox that the more I learn about the role, the more I realize what I do not know.[1] People who develop expertise in a field often comment on the humbling irony that greater knowledge tends to reveal greater ignorance.[2]Psychological explanations aside, I sincerely believe that representing co-ops and condos has become objectively more challenging in recent years. This is because one aspect of the role – legal compliance – has mushroomed.
Some context here is required. Legal compliance is just one of the areas of law that a co-op and condo board lawyer must master.[3] One constant is the lawyer’s role as the primary advisor on corporate governance issues. This requires, among other things, familiarity with the building’s by-laws and how elections need to be administered.[4] These matters can have their moments of high drama, but the base of knowledge required is relatively consistent and predictable.
Another ever-present part of a co-op or condo attorney’s job is conflict resolution.[5] This can include litigation, but the bulk of this work involves disputes, complaints and flashpoints that never see the inside of a courtroom. Although no matter is ever exactly like any other, the techniques and approaches used by lawyers in resolving conflicts tend to be the same.
Legal compliance – the job of advising boards about new statutory and regulatory initiatives and what is required to comply with them – is one area that unquestionably has been transformed in recent years. The number and complexity of new laws that co-op and condo boards have had to respond to has not only fundamentally changed building management but also the demands on outside counsel.
I submit that without extensive remedial education, an attorney practicing 20 years ago would be unable to practice in today’s regulatory environment. Indeed, an attorney practicing just five years ago would have a lot of catching up to do. That is not to say that lawyers today are any smarter but only that they would have a massive head start on anyone not already familiar with the flood of new and increased laws and regulations of recent years.
A good example of the growing scope and complexity of regulatory compliance is Local Law 11.[6] Local Law 11 is known even to laypeople as New York City’s incredibly complicated façade repair law that is responsible for ballooning capital expense budgets and ubiquitous sidewalk sheds.[7]
Until the passage of Local Law 10 in 1980, there was no uniform law governing the maintenance of building facades at all, and Local Law 10 was (at least from today’s perspective) a modest and uncomplicated initiative.[8] Local Law 10 was replaced by Local Law 11 in 1997, but it wasn’t until Local Law 11 was rebranded in 2013 as the Façade Inspection and Safety Program that the compliance requirements really took off.[9] Now, with each successive five-year cycle, this program has become so complex and demanding that it unquestionably dominates the typical building’s capital improvement process and long-term financial planning.[10]
Local Law 11 has simultaneously transformed our legal practice. Once upon a time, contractor agreements could be negotiated by little more than filling in a pre-prepared AIA form. Now, a typical façade contractor agreement has extensive riders and insurance requirements that must be vetted and approved by multiple experts. Once upon a time, a building could get permission to access and protect a neighbor’s property with little more than a (metaphorical or actual) handshake. Now, access agreements have become increasingly burdensome as, among other things, the length of projects increase because of regulatory requirements and the insurance requirements have become more and more onerous.
The story of Local Law 11 has unfolded over several decades. But other significant legal compliance demands have appeared practically overnight. Think of Local Law 97, the law mandating the reduction of carbon emissions. Even though that law had several antecedents prior to its passage in 2019, the substantive and technical requirements dictated by Local Law 97 that officially came into effect in 2024 are creating an entirely new field of law that co-op and condo boards will rely upon their counsel to explain to them.
Legislation like Local Law 11 and Local Law 97 pose a challenge in part because they create an entire system of compliance rules and obligations. In addition to these systemic regulatory initiatives, however, buildings must also digest and respond to an entire catalog of newly implemented one-off measures. For example, in 2018, the State of New York began requiring co-ops and condos to disclose certain “interested party transactions” each year to their shareholders and unit owners. The same year, the City of New York began requiring co-ops to formally adopt smoking policies and incorporate them into their governing documents.
In more recent years, we have seen the passage of legislation introducing new requirements for lead paint certifications, bedbug reports, hurricane evacuation zones, floodplains and history of flood damage, elevator licensing, garage inspections, parapet inspections, gas line inspections, natural gas detectors, fire sprinklers, all-electric construction, electric vehicle charging stations and lithium-ion batteries. That list does not include the extensive new regulations governing affordable housing tenants, short-term rentals, good cause eviction, prevailing wage rules or new restrictions on hiring or housing discrimination. Nor does it include the unprecedented filing and disclosure regime triggered by the Corporate Transparency Act.
Not only do co-op and condo lawyers need to stay on top of all of these developments, but they must also cope with the fact that few of these new mandates were written with co-ops or condos specifically in mind. This creates uncertainty and ambiguity as to the scope and applicability of many of these new laws to co-ops and condos. Suffice it to say, explaining all of this to layperson boards is not an easy task.
For larger, well-resourced buildings, the challenges (if not the cost) of complying with all of these new laws and rules have been somewhat obviated by the larger management companies building out their in-house compliance departments. For smaller, less well-resourced buildings, however, the flood of new legislation may overwhelm their management companies and lawyers.
None of this should be read as a lament for a simpler, bygone era. There is no question in my mind that most, if not all of this new legislation, in one form or another, is sensible and appropriate for larger societal reasons. Nevertheless, it is important to recognize the explosion of new compliance demands on co-ops and condos, and the need for their attorneys to rise to the challenge of a new regulatory environment and adapt their practice accordingly.
William McCracken is a partner at Moritt, Hock & Hamroff. This article appears as an installment of his column, “Bill’s Condo/Co-op Corner,” in NY Real Property Law Journal, the publication of the Real Property Law Section. For more information, please visit NYSBA.ORG/RPLS.
Endnotes:
[1] Viktoriya Sus, “All I Know Is That I Know Nothing”: What Did Socrates Mean?, The Collector, Jan. 21, 2023, https://www.thecollector.com/all-i-know-is-that-i-know-nothing-socrates/.
[2] Id.
[3] The Crucial Role of an Attorney for Condo Association, The Law Off. of James L. Arrasmith, Aug. 27, 2024, https://www.jlegal.org/blog/the-crucial-role-of-an-attorney-for-condo-association/.
[4] Id.
[5] Co-op and Condo Mediation, New York City Bar, https://www.nycbar.org/serving-the-community/free-low-cost-legal-services/co-op-and-condo-mediation/ (last visited Nov. 18, 2024).
[6] N.Y.C. Admin. Code §§ 27-129 (Local Law 11 requires regular inspections, repairs, and maintenance of buildings in New York City).
[7] Department of Buildings Launches Study to Reevaluate Façade Inspection Regulations in New York City, N.Y.C. Dep’t of Buildings, May 30, 2024, https://www.nyc.gov/site/buildings/dob/pr-facade-local-law-11-insp.page.
[8] Id.
[9] Id.
[10] Id.
