June 8, 2023
NYC co-op boards would have to justify denials under new City Council bill

NYC co-op boards would have to justify denials under new City Council bill

Co-op boards would have to explain why they reject apartment buyers’ applications under a bill to be introduced Thursday by Public Advocate Jumaane Williams and Bronx Councilwoman Pierina Sanchez, the Daily News has learned.

Under the draft bill, which The News obtained Wednesday, co-op boards would be required to provide within five days of making its decision a written rationale for turning down a prospective homebuyer that would include “all of its reasons for withholding consent.”

Public advocate Jumaane Williams

The bill is aimed at cracking down on historic discrimination against non-whites seeking to purchase co-op shares and gain a foothold into the middle class.

It’s being introduced as part of a package of bills that includes legislation to require co-op boards to make financial disclosures to perspective buyers and provide them with standardized applications.

“For too long, a complicated, nebulous and opaque co-op process has left open the possibility for discrimination and denial of housing to qualified applicants,” Williams said. “These bills will go a long way toward reining in that process and providing transparency.”

Under the new legislation, co-ops would have to identify each element of a perspective buyer’s application that was found to be lacking, as well as “any negative information” that was factored into a rejection.

Those written statements would have to be sworn out or affirmed under penalty of perjury, the draft of the Council bill states. Failure to comply with the notification timelines set out under the bill could result in fines of anywhere between $1,000 and $25,000.

“With this legislation, we take strides toward increasing transparency to the byzantine process of purchasing cooperative units in New York City,” said Sanchez, who heads the Council’s Housing and Buildings Committee. “Boards and shareholders acting in good faith will have nothing to fear, while boards with secretive practices that serve to perpetuate discrimination will need to revisit their practices.”

In the separate legislation being introduced Thursday, the city would have to require that co-ops to provide disclosures about their finances to perspective buyers after an offer has been accepted by the shareholder selling their shares.

Those disclosures would include specifics, including up-to-date cash flow, debt and operating expenses.

A third bill would require boards to maintain and provide standardized applications to potential buyers to help ensure an even playing field.

Once a filled-out application is received by the board, it would then have 45 days to provide a yes or no response, or a response outlining if acceptance of the application comes with conditions.

If that bill is passed, violations of its requirements could carry penalties from $1,000 to $25,000.

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