Laws on New York Cooperative Apartments

New York co-ops are governed by state Business Corporation Law and relevant court decisions.
New York co-ops are governed by state Business Corporation Law and relevant court decisions. (Image: vintage bible book studio isolated image by dinostock from

New York state cooperatives are corporations governed by relevant court decisions, known as “common law” and state Business Corporation Law, commonly known as BCL. Though neither is used directly in day-to-day co-op affairs, they supersede your co-op’s legal documents, which are written and applied according to these laws. Understanding more about BCL and common law may help your co-op make sound, well-informed decisions.

When BCL is Used

BCL indirectly shapes how your co-op corporation is governed because it supersedes the co-op’s legal documents, like by-laws. For example, by-laws often require annual elections for the board of directors so as to agree with the BCL. BCL is more likely to come into play in suits against the co-op or board for improper elections, mismanagement or conflicts of interest.

Common Law

The principle of common law means U.S. court decisions have the force of law. For example, the decision in 40 West 67th Street v. Pullman can imply that a board can terminate a proprietary lease based on a shareholder’s “objectionable conduct” if the board exercises “business judgment,” or is looking out for the co-op’s interest, and isn’t acting out of bad faith, discrimination or self-interest. All decisions must be placed in the context of your co-op and other laws and decisions, so it’s important to turn to an experienced lawyer.

Recent Amendments to the BCL

Some BCL amendments relevant to co-ops include affording boards some protection from liability, requiring only a simple majority of shareholder votes to amend by-laws and allowing the same officer to serve as president and secretary.

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