NY-Specific Topics: Co-ops, Rent Stabilization, Mansion Tax, and More

Roughly 10% of the NY exam covers topics unique to New York that don’t appear on national exams. Generic prep material misses all of this. Here’s what you need to know.

Article 12-A — The licensing law you need to know cold

Article 12-A of the NY Real Property Law is the foundational statute for real estate licensees in New York. Memorize these specifics:

• Salespersons must work under a sponsoring broker. A salesperson cannot operate independently. Cannot accept compensation directly from anyone other than the sponsoring broker.
• Pre-licensing course: 77-hour state-approved course (salesperson) or 152 hours (broker — includes the 77 plus 75 more).
• Exam: 75 questions, 90 minutes, 70% to pass. Administered by NY DOS.
• License term: 2 years. Renewable.
• Continuing education: 22.5 hours every 2 years to renew. Specific requirements: 2 hours fair housing, 1 hour agency law, 2 hours cultural competency, 2.5 hours implicit bias, 1 hour ethical business practices.
• Trust accounts: All escrow funds must be deposited in segregated accounts. Commingling with broker’s own funds is prohibited.
• Advertising: All advertising must include the licensed name and indicate the broker is a real estate broker. False or misleading advertising is a serious violation.

Co-ops vs condos — the NYC distinction

Outside of New York, condos dominate. In NYC, the older and more common form of multi-unit residential ownership is the cooperative (co-op). The exam tests this distinction repeatedly.

Cooperative (co-op)

• The building is owned by a corporation
• Residents do not own real property — they own shares in the corporation
• The shares are coupled with a proprietary lease giving the resident the right to occupy a specific unit
• Sales require board approval — the co-op board can reject a buyer for any non-discriminatory reason
• Boards typically require interviews, financial disclosures, reference letters
• Sublets are restricted and require board approval
• Financing is harder; many co-ops require minimum cash down (often 20-30%)

Condominium (condo)

• The owner holds fee simple title to the unit
• Plus an undivided interest in the common elements (hallways, roof, mechanicals)
• Sales generally do NOT require board approval (boards may have a right of first refusal instead)
• Easier to finance, easier to rent out
• Lower transaction friction, but typically higher purchase prices than comparable co-ops

Rent stabilization and rent control

NYC and several other NY municipalities (Yonkers, Newburgh, Kingston) have rent regulation systems. The two main types:

Rent control

• Older and stricter system
• Applies to apartments built before 1947 in buildings with 3+ units, with continuous tenancy by the same family before 1971
• Extremely rare today — most controlled units have transitioned to stabilization
• Strict caps on rent increases

Rent stabilization (more common)

• Applies to buildings of 6+ units built before 1974 in NYC (and to certain other categories)
• Tenants have right to renewal leases
• Rent increases set annually by the NYC Rent Guidelines Board
• Limited grounds for landlord refusal to renew
• Strong protection against eviction
• Different rules apply for vacancy decontrol, individual apartment improvements, and major capital improvements (HSTPA 2019 significantly tightened many of these)

If you work with rental properties in NYC, knowing which units are stabilized vs. market-rate is essential — and disclosure obligations differ.

Mansion tax and other NY transfer taxes

NY has multiple layers of transfer taxes on real estate sales:

• NY State Real Estate Transfer Tax: $2 per $500 of consideration ($4 per $1,000), paid by the seller. So a $500,000 sale = $2,000 state transfer tax.
• NY State Mansion Tax: Additional 1% paid by the buyer on residential sales of $1 million or more. NYC has a graduated mansion tax that goes higher — up to 3.9% for sales above $25 million.
• NYC RPTT (Real Property Transfer Tax): Additional NYC-specific tax. Residential: 1% (sales under $500K) or 1.425% (sales $500K+). Paid by the seller.

Multiple Dwelling Law

NY’s Multiple Dwelling Law (MDL) governs safety, sanitation, fire prevention, habitability, and registration in buildings with three or more residential units. Key items:

• Buildings must be registered annually with the local jurisdiction
• Smoke and carbon monoxide detectors required in specific configurations
• Window guards required in apartments with children 10 or under
• Lead paint inspections required in buildings built before 1960 with children under 6
• Heat requirements: 68°F day, 62°F night, October 1 through May 31 (NYC)

NY Department of State (DOS) oversight

The NY DOS Division of Licensing Services is the licensing and disciplinary authority for NY real estate licensees. They:

• Issue, renew, suspend, and revoke licenses
• Investigate complaints against licensees
• Hold hearings (Article 12-A §441-c) on violations
• Impose fines, education requirements, suspension, or revocation

License violations can be reported by anyone — clients, customers, other licensees. Common violations: failure to provide agency disclosure, commingling escrow funds, undisclosed dual agency, advertising violations, misrepresentation.

NY-specific disclosure requirements

• Agency Disclosure Form (NY DOS): At first substantive contact (covered in our Agency deep-dive).
• Property Condition Disclosure Statement (PCDS): Required for most 1-to-4 unit residential sales. Failure to deliver gives the buyer a $500 credit at closing.
• Lead-Based Paint Disclosure: Federal requirement for pre-1978 housing. NY has additional disclosure obligations.
• Smoke and CO Detector Affidavit: Required at closing for 1-4 unit residential sales.
• Co-op / Condo offering plan: Required by NY State law for sponsor sales of new co-op/condo units.