Question: I am a developer in upstate New York, and I am looking to form a homeowners association as part of a residential development. Can you lay out the regulatory pathways I must follow to comply with New York law?
Answer: Forming a homeowners association (HOA) in New York involves navigating a complex statutory and regulatory landscape overseen by the New York State Department of Law, commonly referred to as the Attorney General’s Office. In New York, the sale of property with a required membership interest in an HOA are real estate securities and are therefore regulated by New York’s blue-sky law known as the Martin Act. To comply with New York law, there are three primary pathways to establish an HOA: obtaining a no-action letter under 13 NYCRR Section 22.8, utilizing the Cooperative Policy Statement No. 7 (CPS-7), or filing an offering plan pursuant to 13 NYCRR Part 22 (Part 22). Each filing has its own set of requirements, procedures, and implications. This article explores these three pathways in detail.