AG simplifies marketing for out-of-state condo projects
Real Estate Finance Bureau making it easier for FL, NJ developers to get legit in NY
The New York State Attorney General announced a change in condominium offering rules today that will make it easier for developers to pitch homes away from home to New Yorkers.
The change, called Cooperative Policy Statement-12 (CPS-12), will allow some out-of-state developers to skip parts of the offering plan review process — required in order to advertise or sell condos in New York — if the process in their home state (or country) is deemed to be adequate.
Developers of projects in states like New Jersey and Florida, which already have similar condominium regulatory schemes, will not need to redo certain time consuming and expensive stages of the application process, such as architectural and engineering evaluations. CPS-12 will also exempt condo sponsors from a current regulation requiring escrowed funds from apartment buyers to be exclusively deposited in banks located within New York state.
Representatives from the AG’s Real Estate Finance Bureau said they hope the modifications will make things easier on developers already compliant with the state’s regulations as well as encourage non-compliant developers to get on the right side of the law.
“We welcome the Attorney General’s effort to facilitate these types of residential real estate transactions,” REBNY president John Banks said in a statement. He called CPS-12 a “positive step” towards streamlining the often arduous registration process for projects outside the state.
Dan Riordan, president of residential development at South Florida-based Turnberry Associates, welcomed the policy change, but wishes it had come sooner — his company went through the full approval process just last year for the 154-unit Turnberry Ocean Club condominium in Sunny Isles, Florida. “I think it’s a good thing,” he said. “You’re not even allowed to mail a brochure to New York unless you’re registered.”
Over the years, New York has seen its a fair share of illegal condo sales activity. Out-of-state developers have been setting up shop at Manhattan condo trade shows, AG representatives said, peddling glitzy new towers in South Florida and elsewhere, without first having those offerings reviewed by New York authorities.
“Developers kind of dance around it,” Riordan said.
One such group of dancing developers was nabbed by Attorney General Eric Schneiderman in an investigation last year. According to authorities, sponsors Uri Cohen, Gil Adoni and Sonny Adoni hired a New Jersey brokerage called Condo Mart to place advertisements for their Parkline Condominium in Linden, New Jersey on the walls of Penn Station in Manhattan, as well as in free city tabloid publications like Epoch Times and amNew York. The development partners eventually closed on nine units that they had sold to New Yorkers, the investigation found. In the end, the partners were fined $33,000.