COVID-19 Relief Further Extended for Condo Developers

Gov. Andrew Cuomo issued Executive Order 202.67 (the Order) early this morning (Oct. 5, 2020) which further extends the tolling of critical offering plan deadlines and the qualifying period for mortgage recording tax credit purposes by an additional 30 days, through Nov. 3, 2020. Under the Order, together with prior orders, sponsors now have (in total, subject to extensions by any future executive order) an additional 322 days to hold the first unit closing or to declare a conversion offering plan effective and an additional 211 days to qualify for the mortgage recording tax credit.

Details of the prior Executive Orders (202.18 and 202.55) that implemented the tolling of these deadlines and time periods can be found here and here in the Kramer Levin Condominium Team alerts.

What Does This Mean?

The tolling period is from April 16, 2020, through Nov. 3, 2020 (totaling 202 days as of the date hereof). Executive Order 202.55 extended the tolling total by an additional 120 days. Accordingly, both the 12-month deadline (following the projected first closing date) for the sponsor to conduct a first closing before rescission must be offered to all purchasers and the 15-month deadline following an occupied (rental to condo/co-op) conversion offering plan being accepted for filing by which such offering plan must be declared effective or otherwise abandoned are extended by a total of 322 days as of the date hereof.

The mortgage recording tax credit deadline is extended by a period of time equal to the number of days from Aug. 5, 2020, through and including Nov. 3, 2020 (totaling 91 days as of the date hereof), plus an additional 120 days. As a result, the deadlines for the recordation of the condominium declaration and the closing of the first unit are extended by a total of 211 days as of the date hereof.

How Can I Receive the Benefit of the Tolling?

Within 45 days of the expiration of the Order, sponsors must amend the applicable offering plan to update the projected date of first closing and first year of operation or, as applicable, the date for declaring a conversion offering plan effective. Unless the Order is further extended, this means offering plans must be amended before Dec. 19, 2020.

Will Purchasers Be Entitled to a Right of Rescission?

The Order extends the time period before sponsors would be required to offer a right of rescission to all purchasers. Clients and contacts are encouraged to reach out to the authors of this alert for further details regarding this Order and for help navigating the implications for their unique circumstances.

The foregoing is a summary of key provisions and impacts of the Order. The complete Order can be found here.