The Attorney General is the chief legal officer of the State of New York, and the head of the New York State Government’s Department of Law, often referred to as the Attorney General’s Office. The office traces its history all the way back to 1626, when New York was still under Dutch colonial rule. The current Attorney General is Eric Schneiderman, who was elected to the post in 2010.
As New York’s chief lawyer, the Attorney General (AG) and his office oversee many aspects of our daily lives, including the approval of offering plans for co-op and condominium buildings – both conversions of existing properties and newly-constructed ones. The Attorney General’s office is there to protect the buyer, and to make sure the sponsor/seller is conforming to the terms of the offering plan at all points in the process, from beginning to end.
According to its website, the AG’s office describes its role vis-a-vis co-ops and condos as follows: “The Attorney General‘s office regulates the offer and sale of real estate securities (which includes shares in co-ops) by the sponsor. If the sponsor of the co-op is still controlling the board of directors, or is not keeping the commitments which it made in the offering plan, the Attorney General’s Real Estate Finance Bureau may have jurisdiction.”
The AG and Your Co-op
What happens after your building’s offering plan goes into effect? What ongoing relationship does the Attorney General’s office have with your condo or co-op? Andrew Freedland, an attorney with Anderson Kill, a law firm based in New York that regularly interfaces with the AG’s office says, “The Attorney General’s office doesn’t have a per se relationship with co-op corporations or condo associations. Their relationship is really with the sponsor. The AG’s role in co-op and condo life is to act as a watchdog, to make sure that the offerings put forward within the State of New York are fair and honest representations of what is going to be purchased by those folks who buy units, whether in a co-op, condo or HOA. Once any actual board has no sponsor reps, there’s no real, direct interaction. The AG’s interactions are with the sponsor.”
Stephen Boonshoft, an attorney at the Manhattan-based Robinson Brog Leinwand Greene Genovese & Gluck, P.C., concurs with Freedland, adding the following: “Attorney General involvement is as watchdog over sponsors. [For co-ops], the offering plan is under the Martin Act as an offering of securities. Under the law it’s an offering document, and under the law, in the event the sponsor doesn’t comply with the terms of the offering, the AG can sanction the sponsor, depending on the level of non-compliance.”