Azure's board spent three years fixing its ground rent. New York has no statute that makes that unnecessary.

Azure is a 34-story condop at 333 East 91st Street in Yorkville, 105 residences built in 2010 on land the New York City Educational Construction Fund owns under a long-term ground lease. The lease contained fair-market rent reset provisions. A looming 2030 reset produced a 20-percent maintenance hike, and shareholders began selling units at a discount before a three-year board negotiation with the city agency produced a fixed 3.7-percent annual escalation in place of those resets. New York has no statute setting a ceiling on ground lease rent resets, and the Legislature did not pass either bill that would have addressed this gap before Albany adjourned in early June 2026.

What a ground lease means for the building's economics.

A ground lease building is one where the cooperative corporation, condominium association, or condop owns the structure but not the land beneath it. The building corporation pays annual rent to the landowner under a lease that typically runs 75 to 99 years. Approximately 100 New York City co-ops, condos, and condops are built on leased land, most in Manhattan, in buildings constructed between the 1950s and 2010.

The mechanism that determines long-term carrying costs is the rent-reset clause. Most ground leases set an initial rent at the time of construction or conversion, then reset it to fair market value at intervals of 20 to 25 years. "Fair market" is determined by an appraisal process the lease specifies. Where the appraisers disagree, the dispute goes to arbitration. No statute in New York caps the figure an appraiser may reach. A Manhattan land appraiser valuing a Yorkville lot in 2030 works from 2030 data and is not constrained by what shareholders paid for their units or what the original ground rent was set at when the building opened.

The offering plan at a building's original conversion contains the ground lease terms. That review happens when the building first sells units. A buyer acquiring a unit twenty years after conversion has no statutory right to receive a projection of the remaining reset schedule or an estimate of the exposure at current land values.

Azure's situation: a city agency as landlord, a 20-percent hike, a 2030 reset ahead.

The New York City Educational Construction Fund is a public benefit corporation established under New York Education Law to finance construction of public school facilities through mixed-use development. The DeMatteis Organization and Mattone Group built Azure through an ECF program: the development team constructed Middle School 114 (East Side Middle) at no cost to the city, and ECF retained ownership of the land under the residential portion. Ground rent and PILOT payments from Azure flow to ECF and fund school construction elsewhere in the city.

ECF's mission is to produce school construction revenue. Its ground lease terms reflect that mission. When Azure's board approached ECF about the 2030 reset risk, ECF was not initially receptive. The board retained legal counsel and reframed the argument: instability at the building was as bad for ECF's revenue as it was for shareholders. A depressed resale market, declining unit values, and slower turnover reduce both the PILOT base ECF collects and the long-run ground rent the building can support. That argument eventually moved ECF to the table.

The negotiation took three years. During that period, some shareholders chose to sell at a loss rather than wait for an outcome. The legal fees and advisor costs the board incurred during those three years are common charges, borne by the same unit owners who faced the original reset risk.

What the negotiated result produced.

The renegotiated ground lease fixes the combined annual increase in ground rent and PILOTs at 3.7 percent through February 2082. Fair-market resets are eliminated. At the end of the term, shareholders have an option to purchase the land or renew the lease for an additional 50 years under a defined formula.

That result is stable. It is not the product of a statutory right. It is a private contractual negotiation between a well-represented board and a city agency that had reasons of its own to settle. A building facing the same reset risk with less legal capacity, or a landlord less responsive to the revenue-stability argument, enters the same reset mechanism with no statutory floor under it.

Three outcomes, one statutory framework:

What New York law requires sellers to disclose about ground lease reset risk.

Nothing. New York Real Property Law section 461 explicitly excludes condominiums and cooperatives from the Property Condition Disclosure Act. A condo seller is not required to attach the ground lease to the contract of sale or to project the remaining reset schedule for the buyer. A co-op seller is not required to produce for the buyer the ground lease terms that govern the cooperative corporation's own rent obligations to the landowner.

The Attorney General's Real Estate Finance Bureau reviews offering plans at conversion for completeness. It has no statutory authority to require a resale seller, years after the original offering plan closed, to give a buyer a reset exposure calculation. As this site has documented, the Martin Act reaches sponsor misrepresentations in the offering plan; it does not reach the economics that develop from lease reset terms twenty years after the original closing.

A buyer who wants to assess ground lease reset risk must identify the lease in the offering plan, locate the reset schedule, calculate the remaining reset dates, and estimate current land values. No seller is required to assist. The buyers who sold their Azure units at a loss during the three-year negotiation presumably priced that risk imperfectly. New York gave them no floor-level disclosure requirement to start from.

Two bills that would have governed this outcome by statute. Neither advanced.

S2433A, sponsored by Senator Liz Krueger and Assembly Member Linda Rosenthal, would have established a right of first refusal allowing co-op shareholders to purchase the land when the landowner decides to sell, a 30-year renewal option at each reset period, and displacement protections for primary-residence shareholders. The Senate passed it 34 to 28 in 2025. The Assembly Housing Committee received the companion bill and did not schedule it for a floor vote in either the 2025 or 2026 session. Albany adjourned in early June 2026 without action. The legislative record through the fourth consecutive session of inaction is covered here.

A companion Assembly bill, A2619A, took a different approach in its amended form. Rather than capping annual increases, it would have given co-op shareholders a statutory right of first refusal when the landowner offered the land for sale, along with framework rules for rent-setting if a ground lease expired without renewal. A2619A was reported and referred to the Assembly Rules Committee in May 2026. Albany adjourned without scheduling it for a floor vote. Habitat Magazine reported in June 2026 that the state legislature had again rejected the ground lease co-op bill.

Neither S2433A nor A2619A applied to condop buildings. Azure is a condop. Even if either bill had passed, neither would have governed the Azure-ECF negotiation or given Azure shareholders any statutory right against ECF.

Bottom line.

Azure's board succeeded. Fixed 3.7-percent annual increases, no fair-market resets, a defined purchase option: that is the outcome 25,000 shareholders in approximately 100 ground-lease buildings would need to reach through private negotiation to obtain equivalent stability. Carnegie House, whose tripartite arbitration produced a $24 million rent demand before the Appellate Division vacated it on procedural grounds, is in a second arbitration with no statutory ceiling on the new figure. Those two outcomes operate under the same statutory framework. The difference is the specific negotiating position each building reached with its specific landlord. A buyer purchasing at Azure today has more predictable long-term carrying costs than a buyer at Carnegie House. New York does not require either seller to make that comparison for the buyer before signing. If you hold shares in any ground-lease building, confirm when the next reset is scheduled and what dispute-resolution process your lease specifies, and contact your Assembly member about S2433A and A2619A before the 2027 session opens. The representative contact tool on this site reaches your district directly.

Primary sources: Habitat Magazine, September 2026 · BrickUnderground, "After a 20 percent maintenance hike, an Upper East Side condop renegotiated its ground lease" · NY Senate S2433A (Krueger / Rosenthal) · NY Assembly A2619A · NY RPL § 461 (PCDA exemption) · NY Education Law (ECF statutory authority)

Companion resources: Carnegie House won the arbitration fight. New York has no ground lease cap. · Ground lease co-op rent cap failed to advance. Fourth year in a row. · Why the NY AG can't help with most condo governance disputes · New York's condo-reform record: what stalled, and what passed · Letter to your representative