New York HOA Assessment Limits

Key Findings

• No cap, no ratification. New York puts no statutory ceiling on how much a condominium, cooperative, or HOA can raise regular or special assessments, and it requires no budget-ratification or budget-veto step. The limits come from the community's own documents.
• Subordinate lien. Under RPL § 339-z, the condominium common-charge lien takes priority over most other liens — but not over tax liens, all sums unpaid on a first mortgage of record, or sums unpaid on certain subordinate government-agency mortgages. The only super-priority path runs through the narrow exclusive non-residential (commercial) condominium exception.
• New 90-day notice law. Effective October 16, 2025, condominium boards and incorporated HOAs must give at least 90 days' written notice before commencing a common-charge or assessment lien foreclosure. Defective notice creates dismissal risk.
• Courts police authority, not wisdom. Recent Appellate Division rulings — Zollo (2024) and Oceanview (2024) — confirm that whether a board acted within its governing-document authority is a threshold question for the court. The soundness of an authorized, good-faith decision gets business-judgment deference.

Details

Section 1: Overview — How assessment authority and limits work in New York

New York doesn't cap assessment increases by statute. It doesn't require owners to ratify budgets. And when a condo board tries to collect an unpaid charge through foreclosure, its lien sits behind the first mortgage — not ahead of it. Assessment authority breaks into three distinct regimes. Condominiums operate under the New York Condominium Act (Real Property Law Article 9-B), with common charges allocated under RPL § 339-m and the lien for unpaid charges arising under RPL § 339-z.¹ In a cooperative, the resident is a shareholder-tenant who holds a proprietary lease and pays maintenance under the Business Corporation Law or Cooperative Corporations Law.² Homeowners associations draw their authority from recorded covenants and the Not-for-Profit Corporation Law, with the declaration defining what assessments are permitted.³

Regular increases move through the budget process. A condominium or HOA board adopts an annual budget under the bylaws or declaration; a cooperative board adjusts maintenance under the proprietary lease. No statute sets a ceiling, and no statute requires a member vote. Special assessments follow the same document-driven model. For condominiums, unpaid charges become a lien subordinate to the first mortgage of record — a board foreclosing on a delinquent unit recovers behind the mortgage lender.¹

On the national map, New York is a declaration-driven state. It stands apart from statutory-cap states like California, which limits regular increases by statute, and from the UCIOA ratification states, many of which pair a budget-veto mechanism with a super-priority lien. In New York, the governing documents set the limits — the statute provides none. The sections below detail each regime, the procedures, and the latest activity.

Section 2: The assessment framework

2A. Authority to levy and allocate charges and assessments

For condominiums, RPL § 339-m provides that common expenses are charged to unit owners according to their respective common interests. The statute permits special allocation of profits and expenses to non-residential units, or based on special or exclusive use of particular units or common areas, where the declaration and bylaws so authorize. It also allows reduced charges for units subject to certain income-restricting regulatory agreements, with that special allocation disclosed as a special risk in any offering plan.⁴ The board of managers sets and collects common charges under the bylaws.⁵ Common-interest percentages are fixed in the declaration and offering plan and cannot be changed unilaterally.

For cooperatives, authority comes from the proprietary lease and corporate law rather than the Real Property Law. The resident is a shareholder-tenant who pays maintenance set by the board. Business Corporation Law § 501(c) addresses cooperative housing corporations, providing that changes in maintenance charges and general assessments under a proprietary lease be fixed on an equal per-share basis, an equal per-room basis, or as an equal percentage of maintenance charges.⁶ Most New York residential cooperatives organize under the Business Corporation Law; the Cooperative Corporations Law also applies to entities formed under it, and where its provisions conflict with the BCL, the Cooperative Corporations Law controls.⁷

For homeowners associations, New York has no single HOA statute. Most associations form as not-for-profit corporations under the Not-for-Profit Corporation Law, and assessment authority rests in the recorded declaration of covenants, conditions, and restrictions and the bylaws.³ The declaration defines the categories of assessment, the events that trigger them, and any owner-approval thresholds.

2B. Limits on regular increases

New York supplies no statutory percentage cap on regular assessment or common-charge increases for condominiums, cooperatives, or HOAs, and no statute requires owners or shareholders to ratify a budget before it takes effect. This distinguishes New York from states that cap regular increases by statute and from UCIOA states that allow a member vote to reject a budget. The limits that exist are document-defined: a declaration, set of bylaws, or proprietary lease may impose its own ceiling, notice requirement, or member-vote trigger, and the board must follow it.

The practical constraint on a board is its governing documents combined with the fiduciary duty enforced through the business judgment rule. Under that standard, established by the Court of Appeals in Levandusky v One Fifth Avenue Apartment Corp., a court will not second-guess the wisdom of a board's decision so long as the board acted within the scope of its authority under the governing documents and in good faith to further a legitimate purpose.⁸ Whether the board acted within the scope of its authority is a threshold question subject to judicial scrutiny.⁹

A defective increase — one adopted outside the procedure or authority set in the documents — can be challenged and invalidated. Where a board levies a charge it had no authority to impose, or follows the wrong procedure, the business judgment rule does not shield it, and a court may declare the charge invalid and unenforceable.⁹

2C. Special assessments, the lien, and foreclosure

Authority to levy a special assessment is document-defined for all three regimes. A condominium or HOA board levies a special assessment under the powers in the declaration and bylaws; a cooperative levies under the proprietary lease and bylaws. Some governing documents require a member or shareholder vote above a stated threshold; others leave the decision to the board.

For condominiums, RPL § 339-z gives the board of managers a lien on each unit for unpaid common charges, with interest, prior to all other liens except (i) tax liens, (ii) all sums unpaid on a first mortgage of record, and (iii) sums unpaid on certain subordinate mortgages held by specified government housing agencies. That lien is subordinate to a first mortgage of record. The statute provides a narrow exception: the declaration of an exclusive non-residential (commercial) condominium may provide that the common-charge lien will be superior to mortgage liens of record. On sale, unpaid common charges are paid from the sale proceeds or by the grantee, and any grantor or grantee is entitled to a statement of unpaid common charges from the board; neither is liable for, nor is the unit subject to a lien for, charges accrued before conveyance in excess of the amount in that statement.¹

Foreclosure runs under RPL § 339-aa. The lien is effective on filing a verified notice of lien and continues until paid or until six years from filing, whichever is sooner. It is foreclosed in the manner of a mortgage, now expressly under Article 13 of the Real Property Actions and Proceedings Law.¹⁰ For cooperatives, the security mechanism is different: the shareholder's interest is personal property, and the cooperative secures unpaid maintenance through its lien on the shares under the Uniform Commercial Code, with default typically enforced by terminating the proprietary lease and proceeding in Housing Court.² The operational implication for condominiums is significant: because the common-charge lien sits behind the first mortgage, a board foreclosing on a unit with little equity may recover little or nothing after the mortgage and taxes are paid.¹¹

Section 3: Assessment limits and procedures in practice

A. Regular increase procedure

For condominiums and HOAs, the board adopts an annual budget under the bylaws or declaration, and the resulting charge takes effect as those documents provide. There is no statutory percentage limit — condominiums operate under RPL Article 9-B, HOAs under the declaration and Not-for-Profit Corporation Law.⁵ For cooperatives, the board adjusts maintenance under the proprietary lease, again with no statutory cap — governed by the proprietary lease and Business Corporation Law.⁶ Notice and effective-date requirements come from the governing documents, not from any general statutory rule, for all three regimes.

B. Special assessment procedure

Authority to impose a special assessment is document-defined for condominiums, cooperatives, and HOAs. The declaration, bylaws, or proprietary lease states the trigger, the amount, and the procedure. Any member-approval or shareholder-approval threshold exists only if the governing documents create it — New York supplies no statutory threshold. Notice, too, is governed by the documents for all three regimes.

C. Caps, ceilings, and override mechanisms

New York provides no statutory percentage cap on regular or special assessments and no statutory owner-ratification or budget-veto mechanism for condominiums, cooperatives, or HOAs. Any cap, ceiling, or supermajority override is document-defined, found in the declaration, bylaws, or proprietary lease. Where the documents set a threshold above which a member vote is required, the board must obtain that vote. The Zollo case illustrates how a declaration may require a supermajority owner vote for some special assessments but not for maintenance-type assessments authorized elsewhere in the document — the classification matters for all three regimes.⁹

D. Notice, documentation, and disclosure tied to charges

Notice of an increase or assessment is governed by the governing documents, with no general statutory notice rule for the charge itself in any of the three regimes. For condominiums, a grantor or grantee is entitled to a statement of unpaid common charges under RPL § 339-z, and the unit is not subject to a lien for pre-conveyance charges exceeding that statement.¹ On resale, condominium and cooperative offering-plan disclosure is regulated by the Attorney General's Real Estate Finance Bureau, with condominium units deemed cooperative interests in realty under RPL § 339-ee and therefore subject to General Business Law § 352-e.¹²

Section 4: Recent legislative and judicial activity

A. Recent bills

B. Recent appellate rulings

C. Active legislative debates

Several 2025-2026 bills remain pending on condominium and cooperative transparency, including a residential condominium owner bill of rights (S5089 / A5227) and a cooperative and condominium ombudsperson program (S7745). None has been enacted, and none imposes a percentage cap on assessments.¹⁶

Section 5: National positioning and related coverage

New York is a declaration-driven state. It contrasts with statutory-cap states led by California, where Civil Code § 5605(b) bars a board from imposing a regular assessment more than 20 percent greater than the prior fiscal year's regular assessment, or special assessments that in the aggregate exceed 5 percent of budgeted gross expenses, without the approval of a majority of a quorum of members.¹⁷ It also contrasts with the UCIOA ratification states — Alaska, Colorado, Connecticut, Delaware, Maine, Minnesota, Nebraska, Nevada, New Mexico, Vermont, and Washington — many of which pair a budget-ratification mechanism with a super-priority lien giving the association a limited claim ahead of the first mortgage. New York does neither: the governing documents set the charges, the statute supplies no cap, and the condominium common-charge lien is subordinate to the first mortgage of record. For multi-state operators, compliance in New York turns on reading each association's declaration, bylaws, or proprietary lease rather than applying a uniform statutory formula, and condominium collection strategy must account for collecting behind the mortgage. New York also has a large cooperative sector: in New York City alone there are about 450,000 occupied apartments in cooperative buildings and another 318,000 in condominiums — together about 22 percent of the city's occupied housing stock. Condominium and cooperative offering plans are regulated by the Attorney General's Real Estate Finance Bureau.¹⁸ Federal frameworks, including the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the Bankruptcy Code, also bear on New York assessment collection practice.

Recommendations

• Immediate (condominium and HOA boards and managers): Update collection procedures now to insert the 90-day pre-foreclosure notice required by Chapter 433 of 2025. Use 14-point type, state the specific amount due, mail to the property address and any other address of record, and document service. Treat any foreclosure filed without compliant notice as exposed to dismissal. Benchmark that would change this step: a court decision construing the earliest permissible service date, or a further statutory amendment.
• Immediate (all boards): Pull the governing documents and confirm exactly what authority and procedure apply before adopting any increase or special assessment. Because New York supplies no statutory cap or vote threshold, the declaration, bylaws, or proprietary lease is the controlling limit. Classify each charge precisely — regular or maintenance versus special — because, as Zollo shows, the classification determines whether an owner vote is required.
• Ongoing (attorneys): Frame any defense or challenge around the threshold authority question first. Deference under the business judgment rule applies only after the board shows it acted within its document-based authority and in good faith. Do not assert or assume super-priority for a residential condominium lien; it is subordinate to the first mortgage except in the exclusive non-residential exception.
• Ongoing (managers and boards) on collection economics: Before referring a delinquent condominium unit to foreclosure, assess the unit's equity net of the first mortgage and taxes. Where there is no equity, the subordinate lien may yield little, and a money judgment, payment plan, or monitoring the lender's own foreclosure may be the better route. Benchmark that would change strategy: enactment of any bill granting residential common-charge liens priority over mortgages (none is currently pending).
• Watch list (all audiences): Monitor S8912 (co-op transparency), S5089/A5227 (condominium owner bill of rights), and S7745 (ombudsperson program). None is enacted and none caps assessments, but each would add governance or disclosure duties if passed. Re-verify status each quarter.

Caveats

• This page states the law as verified against primary sources through June 9, 2026. The New York Legislature's 2025-2026 session is ongoing and pending bills can be amended, passed, or abandoned.
• The 90-day notice statute is new (effective October 16, 2025) and its text is ambiguous about the earliest date a board may serve the notice to start the 90-day clock. Boards should obtain case-specific counsel.
• The cited appellate rulings are fact-specific and turn on the language of particular declarations and bylaws. They confirm general principles — threshold authority review, the fixed nature of common interest — but do not set a numeric limit on assessments.
• Federal statutes (FDCPA, SCRA, Bankruptcy Code) and local law (for example, New York City requirements) can affect collection practice and are outside the scope of this state-law page.
• Where this page describes a regime "for all three" types of community, the specific governing document always controls the detail. The statement that there is "no statutory rule" means no New York statute supplies a default, not that the community is unregulated.

1. N.Y. Real Property Law § 339-z, Lien for common charges; priority; exoneration of grantor and grantee (NYSenate.gov) ↩
2. N.Y. Business Corporation Law § 501, Authorized shares (NYSenate.gov) ↩
3. N.Y. Not-for-Profit Corporation Law (NYSenate.gov) ↩
4. N.Y. Real Property Law § 339-m, Common profits and expenses (NYSenate.gov) ↩
5. N.Y. Real Property Law § 339-v, Contents of by-laws (NYSenate.gov) ↩
6. N.Y. Business Corporation Law § 501(c), cooperative maintenance charges and general assessments (NYSenate.gov) ↩
7. N.Y. Cooperative Corporations Law (NYSenate.gov) ↩
8. Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530 (1990) (NYCourts.gov) ↩
9. Zollo v Adirondack Lodges Homeowners Assn., Inc., 2024 NY Slip Op 01225, 225 AD3d 973 (3d Dept) (NYCourts.gov) ↩
10. N.Y. Real Property Law § 339-aa, Lien for common charges; duration; foreclosure (NYSenate.gov) ↩
11. N.Y. Real Property Law § 339-z, subordination of common-charge lien to first mortgage of record (NYSenate.gov) ↩
12. N.Y. Real Property Law § 339-ee, Effect of other laws (units deemed cooperative interests in realty under GBL § 352-e) (NYSenate.gov) ↩
13. N.Y. Assembly Bill A3470 (2025-2026), signed Chapter 433, amending RPL § 339-aa and adding RPAPL Art. 20-A; bill text, sponsor memo, and votes (NYSenate.gov) ↩
14. N.Y. Senate Bill S8912 (2025-2026), cooperative housing corporation transparency (NYSenate.gov) ↩
15. Board of Mgrs. of Oceanview Condominium v Riccardi, 2024 NY Slip Op 03806, 229 AD3d 595 (2d Dept) (NYCourts.gov) ↩
16. N.Y. Senate Bill S5089 (2025-2026), residential condominium owner bill of rights (NYSenate.gov) ↩
17. Comparative note: California Civ. Code § 5605(b) caps regular and special assessments; New York's § 339-aa supplies no cap (NYSenate.gov, New York primary source) ↩
18. N.Y. General Business Law § 352-e, offering statement/prospectus filing with the Department of Law (Real Estate Finance Bureau) (NYSenate.gov) ↩