Just 6 months ago New York Attorney General Eric Schneiderman adopted a new rule requiring all developers of condominium and co-op properties to file copies of their offering plans in a digital format with the AG’s office, not just in hard copy. Thursday (April 27), the AG’s office changed their rule, effective May 15, to again allow compliance either by filing hard copies or digitized copies of the plans. There’s no doubt electronic filing is the future, eventually making it far easier and cheaper for prospective buyers and other interested parties, or their lawyers, to review the plans. There has been considerable push back however, especially from smaller developers, their attorneys and trade groups, mostly due to the expense of digitizing existing plans not already available electronically.
The plans covered under the regulation are often very expansive, often multi-volume, detailing plans, pricing, finances, expense projections, rules, all changes and amendments to the offering and other required disclosures for every condominium and coop project in New York state. These offering plans are given to buyers as part of the financing and settlement process, and also must be filed with and approved by the Attorney General’s office as in compliance with the State of New York.
There is no doubt the Attorney General’s office is moving towards a completely digitized comprehensive filing requirement. Digitized filing can make review easier and quicker, allows records to be much more transparent and can save significant staff time and record storage space. Eventually, if developers and their attorneys know they must go digital from the inception of their development, digital publishing and filing can also save developers money, and therefore encourage development. This change, allowing compliance by hard copy or digitized filing, is a reasonable recognition that requiring a quick change over can actually make compliance more expensive in the short run, and allows a phase in period with new projects in the future aware of what will be expected of them.