Important Reprieve Afforded to Sponsors through Executive Order
Tolling Certain Crucial Deadlines Based on
COVID-19 State of Emergency
New York Gov. Andrew Cuomo recently issued Executive Order No. 202.18 (“Executive Order”) to temporarily suspend or modify statutes and local laws thereby tolling important statutory deadlines for the period of time commencing on April 16, 2020 and continuing through May 16, 2020 (“Tolling Period”)
The Tolling Period impacts the following obligations of sponsors under the Attorney General’s regulations:
The Time Frame to Conduct a First Closing is Tolled. According to the well-established regulations promulgated by the Attorney General governing new construction and substantial rehabilitation condominium and cooperative offerings, a sponsor must offer purchasers the right to rescind their purchase agreements if the first closing does not occur within the first 12 months of the anticipated commencement date of the first year of operation. As a result of the recent “stay at home” directives (essentially putting construction and the ability to procure a temporary certificate of occupancy at a stand-still), the Executive Order provides necessary relief by extending this 12-month deadline for the length of the Tolling Period. Therefore, sponsors are now afforded additional time to conduct their first closings before being required to offer recession to purchasers under contract.
Timing to File an Updated Budget for First Year of Building Operation is Tolled. Similar to the statutory deadline requiring a first closing to occur within the first 12 months from the anticipated commencement date of the first year of building operation, a sponsor is also required to update their projected budget for the first year of operation if the first closing is delayed by more than 6 months. This requirement is likewise suspended for the length of the Tolling Period, now requiring any necessary update to the budget to take place within 30 days from the expiration of the Tolling Period.
The 15-Month Deadline to Declare Effective in a Conversion Plan is Tolled. In a residential conversion offering plan, a sponsor is obligated to declare the offering plan effective within 15 months from the date the offering plan is accepted for filing, failing which sponsor is required to abandon the offering and provide rescission to all purchasers. Such 15-month deadline is also suspended for the length of the Tolling Period, affording sponsors additional time to meet these sales requirements.
Filing Fees. The payment of all filing fees to be made at the time of submission shall also be exempted during the Tolling Period, with the understanding that all such fees shall be remitted to the DOL within 90 days of the expiration of the Tolling Period.
It should also be noted that the Tolling Period may be further extended by an amendment to the Executive Order. A copy of the Executive Order can be found here.
Starr Associates LLP is proud to have worked alongside other industry leaders in an effort to bring the aforementioned relief to our clients and their condominium/cooperative projects affected by Covid-19. Our firm is available to discuss the potential impact of the Tolling Period on your project and help you navigate through these unprecedented times. Additionally, our office will be circulating updated deadlines specifically related to your individual project.
Wishing each of you and your families continued health and safety during these very difficult times.
Our team has had the pleasure of working with Starr Associates on our project at 150 Rivington Street. The entire Starr team was a tremendous asset to the success of our project. Through very challenging times, Starr Associates came through time and time again. It is an honor to work with everyone at Starr!
I have known Allan Starr for many years and worked with him on many projects. He has always exceeded my expectations. He not only knows the ins and outs of the law, but knows how to make the whole process easy and quick. I’ve found him to possess an incredibly astute legal mind, combined with a common sense approach that always accomplishes my goals. He’s not only a gentleman and a friend, but a brilliant lawyer.
It has been an absolute pleasure working with Allan Starr and Samantha Sheeber over the past twelve years. They are not only the utmost professionals, but also wonderful people who I have grown to love like family. I trust them with all of my new development projects and private clients, and we support each other in our business and personal lives. Starr Associates LLP has always been there for me and my clients and I would recommend them as highly as I recommend anyone.
Allan and I have worked together for decades; along the way, I have worked with Samantha Sheeber, Andrea Roschelle, John Rodriguez and Erica Starr and have always been pleased with their quick and accurate responses. They have worked with us on closings (with great and efficient results), restatements of stale plans, amendments and other assorted AG requirements, always on a timely and cost-effective basis.
“Working with Starr has been great on three condo projects in Manhattan to date. The accessibility and direct attention of the partners is unsurpassed. Allan and Sam have the interests of the owner at heart and make every effort to protect our interests in a responsible and defensible manner. Their practical approach and deep knowledge of the offering plan process and requirements of the AG office combine to make a highly effective and efficient package. At the associate level they have good support as well. The closing office has to be the best in NY – never a failed closing in 15 years. We are repeat customers and will be going forward.”
“Samantha Sheeber is a partner in making transactions successful. She’s resourceful, respected, smart, funny as hell, and is swift to constantly embarrass us (and clients) because she sees the end while we all muddle in the middle. She saves time. She is selfless and fast and conscientious. She’s loyal to the notion of selflessly getting stuff done. She cultivates great talent. And she makes the process fun, even when she is mad at us for asking the same impossible question 11 times hoping for a new result (a solution for which — by the way — she often discovers).”
“As an active developer in New York City, Magnum Real Estate Group is proud to have partnered with Starr Associates, LLP as our legal counsel in 5 significant projects valued at approximately $800 million. Over the last 5 years, Starr has provided us with exceptional advice on condominium Offering Plans and related transactions. Partner Samantha Sheeber, Esq. and her team have professionally guided us, and provided creative and effective solutions when needed.”
“I have had the fortunate opportunity, over the past 16 years, to work with Allan Starr and Samantha Sheeber who I consider to be experts in the field of real estate law. They, together with their team, have a deep understanding of Attorney General Offering Plan registrations and continually seek to identify creative solutions to complicated issues. Their level of integrity and commitment are unwavering no matter how large or small a project. I completely endorse Starr Associates LLP and look forward to our mutual continued success.”
“Starr Associates’ specialty in the creation and representation of condominiums is unmatched. Their knowledge, experience and professionalism in the office condominium sector is best-in-class. Starr Associates’ hard work and expertise has been critical to the success of our firm’s office condominium projects.”
“Starr Associates have been our condominium attorneys for many years. Their counsel goes well beyond just drafting the condominium documents, which of course they do extremely well. They also represent us and our brand with condominium unit purchasers, and with our lenders and partners on condominium related matters. We have always found Starr’s attorneys to be professional, responsive and cost-conscious.”