Co-op Boards May Have to Explain Rejections | The Reasons Bill (S-1149)

 New York State Senator Brian Kavanagh introduced legislation that would force co-op boards to explain the reasoning behind their rejections. “The Reasons Bill" (S-1149)

Currently the state of New York allows co-op boards to reject individuals without any explanation, except in the event of discrimination claims. 

Currently in the state of New York condominium boards have "First Right of Refusal" They must either waive their right and issue a waiver or they must purchase the unit from the unit owner for the same price and terms as the prospective purchaser. 

This new bill would require transparency from co-op boards and is designed to “ensure that the process of purchasing cooperative housing is fair, transparent and does the utmost to protect against illegal discrimination,” per the bill’s language. 

If the bill is signed into law by the Governor, buyers can expect more transparency from co-op boards throughout the entire application process. Specifically, the proposed legislation mandates that buyers receive notification of their application status no later than 21 days after submission. Then, once the application is complete and received, co-op boards must communicate the date that the prospective buyer can expect to hear back with their decision. 

If the applicant is rejected, this new legislation would require co-op boards to list the specific reasoning behind the rejection.

As the gap between co-op and condo values in New York City continues to swell this bill may unlock value and help narrow the gap. 

This bill has passed through both the Assembly and the Senate, and is expected to hit the Governor’s desk soon.