N.Y. General Business Law § 352-l: Cooperative corporations

§ 352-l. Cooperative corporations. 1. For the purposes of this

section, "non-occupying owner" shall mean the owner of shares in a

cooperative corporation who does not occupy the dwelling units to which

his or her shares are allocated.

2. If a non-occupying owner rents any dwelling unit to a tenant and

then fails to make payments due for maintenance, assessments or late

fees for such unit within sixty days of the expiration of any grace

period after they are due, upon notice in accordance with subdivision

three of this section, all rental payments from the tenant shall be

directly payable to the cooperative corporation.

3. If the maintenance, assessments or late fees due for any unit have

not been paid in full within sixty days after the expiration of any

grace period of the earliest due date, the board of directors shall

provide written notice to the rental tenant and the non-occupying owner

providing that, commencing immediately and until such time as all

payments for maintenance, assessments or late fees are made current, all

rental payments due subsequent to the issuance of such notice are to be

made payable to the cooperative corporation at the address listed on the

notice. Where a majority of the board of directors has been elected by

and from among the owners who are in occupancy, the board may elect not

to require that rental payments be made payable to the cooperative

corporation. At such time as payments for maintenance, assessments and

late fees from the non-occupying owner are once again current, notice of

such fact shall be given within three business days to the rental tenant

and non-occupying owner. Thereafter all rental payments for such unit

shall be made payable to the non-occupying owner or to a designated

agent. A non-occupying owner who disputes the cooperative corporation's

claim to rental payments pursuant to this section shall be entitled to

present facts supporting such owner's position at the next scheduled

meeting of the board of directors, which must be held within thirty days

of the date that such board receives notice that such owner seeks to

dispute such claim.

4. Nothing in this section shall limit any rights of shareholders or

of the board of directors existing under any other law or agreement.

5. Payment by a rental tenant to the cooperative corporation made in

connection with this section shall relieve that rental tenant from the

obligation to pay such rent to the non-occupying owner and shall be an

absolute defense in any non-payment proceeding commenced by such

non-occupying owner against such tenant for such rent.