PERHAPS THE MOST intriguing law affecting condominiums and cooperative housing companies is the Condominium and Cooperative Abuse Relief Act of 1980[1]� (the Abuse Act). This is due to the fact that in 1980 Congress passed a law that affected cooperatives and condominiums, previously the domain of state legislatures. The Abuse Act was enacted as part of The Housing Act,[2]� which was intended to assist low-income people in need of adequate housing, families unable to buy homes and distressed communities. The feeling in Congress was that due to a housing crisis in America, it was necessary to combat the “adverse impacts of condominium and cooperative conversions . . . .”[3]�
Prior to the Abuse Act, the courts in the State of New York took the position that sponsors of the conversion of property to cooperative or condominium ownership had the right to maximize their profits, and if that meant self-dealing prior to the conversion, it was perfectly proper so long as it was fully disclosed.[4]� Yet Congress had heard many horror stories of developer abuse, especially in Florida, and decided to act.
