AG repeals memo limiting FOIL requests for condo plans
Agency changes tune two months later, saying "less restrictive means exist to ensure compliance"
The New York State Attorney General’s office repealed a previous measure limiting the disclosure of condominium offering plans last week, according to a new memo released by the agency on July 2.
In May, the office’s Real Estate Finance Bureau issued a memorandum stating that it would deny future requests to view condominium offering plans not yet approved for official filing. These plans had previously been available to the public through Freedom of Information Law (FOIL).
The action to limit the disclosure of these plans, which the director of the New York State Committee on Open Government, Robert Freeman, called “contrary to law,” meant that information regarding pricing, floor plans and other details of future condo buildings would stay sealed until plans were officially approved.
The office justified the scaling back of disclosures as compliance with certain provisions of the Martin Act — laws that, among other things, regulate the marketing of real estate securities before they have been approved by the attorney general.
Less than two months later, the decision to block condo FOILers was nixed.
Just Thursday, the Real Estate Finance Bureau repealed the May memorandum by issuing a new one, this time with the opinion that “less restrictive means exist to ensure compliance” with the General Business Laws included within the Martin Act.
Although neither the May or July memoranda specify additional reasons for limiting plan disclosures apart from compliance with the Martin Act, some have speculated that the system was being abused by brokers and other industry professionals seeking to get early information about pricing on new development projects. An attorney told TRD that many developers were concerned that early reveals of pricing were allowing their competitors to change their own strategies and pricing in response to what they found in pre-approved plans.
Additionally, it is well known that the bureau has experienced a tremendous uptick in submitted condominium plans in recent years. According to a New York Times report last year, the office saw 661 projects with a total sellout of $20 billion in 2013 alone. Plans and information made available to the public are largely not digitized, so those who wish to see detailed plans must review them in person in hard copy. When plans change, amendments are created which must also be reviewed by the Real Estate Finance Bureau. These amendments, too, can be attained by the public via FOIL requests.
FOIL requests for offering plans will presumably now be attended to as they were before, and the repeal of the May decision concludes by stating that such requests “will continue to be evaluated on a case-by-case basis.”
The Attorney General’s Office declined to comment for this story.