The AG published proposed condo conversion rules. The comment window closes July 12.

On May 13, 2026, the New York Attorney General's Real Estate Finance Bureau published a Notice of Proposed Rulemaking in the New York State Register. The proposed regulations update 13 N.Y.C.R.R. Parts 18 and 23 — the rules governing how a landlord may convert an occupied NYC rental building into a cooperative or condominium. The legal authority being codified dates to 2019 and 2022. The 60-day public comment period ends July 12, 2026.

What GBS §352-eeee controls — and what it doesn't.

The Martin Act (General Business Law Article 23-A) authorizes the AG's Real Estate Finance Bureau to oversee "real estate syndication offerings." Within that framework, GBS §352-eeee governs the specific process by which an owner of an occupied NYC rental building may convert it to cooperative or condominium ownership. The bureau reviews and approves the offering plan, sets disclosure requirements, and determines when a plan may be declared "effective." That is the legal moment at which the minimum threshold of tenant purchase agreements has been met to proceed with the conversion.

That authority ends when the building converts. Post-conversion, the REFB has no ongoing jurisdiction over how the board is elected, how the managing agent is engaged or replaced, how reserve funds are spent, or how special assessments are levied. Those decisions fall under the Business Corporation Law (for co-ops) and the Condominium Act, Real Property Law Article 9-B (for condos); neither designates the REFB or any other state agency as a routine enforcement body for governance disputes. The structural gap that makes it difficult for owners to challenge board decisions has nothing to do with 13 NYCRR; it predates the current REFB rulemaking and the proposed rules do not touch it.

From 15% to 51%: the 2019 change being codified now.

For decades, the baseline rule under GBS §352-eeee was that a non-eviction conversion plan could be declared effective once 15% of the building's tenants signed purchase agreements. Landlords could also use eviction plans, which allowed conversion to proceed even if most tenants chose not to buy, provided the building met certain protections for elderly and disabled non-purchasers.

The Housing Stability and Tenant Protection Act of 2019 (Chapter 36, Part N of the Laws of 2019) changed both rules in a single stroke. Eviction plans were eliminated entirely. The non-eviction plan threshold rose from 15% to 51%. More than half of the building's tenants must sign purchase agreements before a plan can be declared effective. According to reporting in The Real Deal, conversion activity in occupied NYC rental buildings essentially halted after HSTPA took effect on June 14, 2019.

The REFB's existing 13 NYCRR Parts 18 and 23 were written before 2019. The agency has been administering a statute the legislature materially changed in 2019 and 2022, against a regulatory text that predates those changes. To our knowledge, the May 13, 2026 proposed rules are the bureau's first published attempt to bring those regulations into alignment with current law, seven years after the legislature acted.

The 2022 amendment and the AHRA's parallel conversion track.

The story did not end with HSTPA. Chapter 696 of the Laws of 2022 amended the Martin Act to create new conversion pathways after the 51% threshold made traditional conversions impractical. That amendment, among other things, redefined "Non-eviction plan" and added new requirements for when conversion plans may be declared effective. The May 2026 proposed rules implement those 2022 changes alongside the 2019 ones.

Then, Governor Hochul signed the Affordable Housing Retention Act in May 2025 as part of the FY 2026 enacted budget, with its conversion provisions taking effect on November 5, 2025. For a four-year window running through late 2029, the AHRA allows qualifying buildings to convert under a 15% combined threshold of tenants and purchasers. To qualify, a building must have been constructed after 1996, contain at least 100 dwelling units, and have income-restricted units either at risk of losing affordability restrictions or requiring additional financial support to remain viable. The AHRA requires the AG to propose its own implementing rules within 365 days of the act's November 5, 2025 effective date. That is a separate rulemaking due by November 5, 2026.

What the proposed rules protect at the conversion moment.

The 13 NYCRR framework governs what the offering plan must disclose and when the conversion may legally proceed. Under the HSTPA framework being codified, tenant protections at the conversion moment include: no tenant may be evicted for declining to purchase; tenants over 62 or with disabilities who choose not to buy must be offered a preferential rent for as long as they remain in residence; tenants receive a six-month right of first refusal if the sponsor later sells any occupied unit.

These protections apply at the offering-plan stage. They are not post-conversion governance protections. Once the plan is declared effective, the building converts, and the offering plan record is closed, those tenant protections no longer govern anything. They were conditions of the conversion transaction, not ongoing rights inside the new co-op or condo structure. The REFB's jurisdiction over that building ends at the closing.

The May 2026 proposed rules do not propose any changes to the post-conversion governance framework. They address the conversion process itself: disclosure requirements, threshold certifications, plan review timelines, and effectiveness declarations. That is the REFB's lane under GBS §352-eeee, and the proposed rules stay in it.

How to submit a public comment before July 12, 2026.

The proposed rules are a public rulemaking proceeding under Section 202(1)(a) of the State Administrative Procedure Act. Any person may submit written comments within the 60-day window: an individual unit owner, a co-op or condo board, a tenant, a building resident, a legal organization, or an advocacy group.

Comments are most useful when they identify a specific provision of 13 NYCRR Parts 18 or 23, propose a concrete change to the regulatory text, and explain the reason for that change. Provisions addressing tenant-protection disclosures, plan effectiveness certifications, the timeline for REFB review, and the REFB's authority to reject or condition approval of a conversion plan are all within scope.

The full text of the proposed regulations, the supporting regulatory impact statement, and submission instructions are available at the REFB's proposed rulemaking page: ag.ny.gov/resources/government-organizations/real-estate-regulation/proposed-rulemaking. The comment deadline is July 12, 2026.

Bottom line.

The May 13 proposed rules are, at their core, a regulatory housekeeping exercise: codifying statutory changes the REFB has owed the public since 2019 and 2022. That it took seven years reflects the bureau's capacity constraints: as of past reporting, as few as five lawyers administering offering-plan oversight for a state with thousands of pending and active residential real estate transactions. The comment period is the one moment in the regulatory lifecycle when outside voices have formal standing to shape how conversion plans are reviewed, what landlords must disclose to tenants, and how the 51% threshold certification is administered in practice.

After July 12, those rules get locked in until the next rulemaking cycle. If the governance gap on the other side of conversion, where no state agency holds routine authority over board conduct, remains a deliberate structural feature of New York law, the conversion moment is where any meaningful outside input on owner and tenant rights ends.

Primary sources: AG REFB Notice of Proposed Rulemaking (May 13, 2026) • GBS §352-eeee (NY Senate Open Legislation) • Holland & Knight: NY Enacts Affordable Housing Retention Act (May 2025) • The Real Deal: HSTPA halted NYC conversions (Jan. 2025)

Companion resources: What the Martin Act can reach — and the structural gap it leaves • How to write an AG REFB complaint • NY LLC Transparency Act and sponsor disclosure • Ten reform bills, zero enacted: the legislative graveyard • NY condo transparency bill: 58-1 in the Senate, Assembly sponsor withdrew