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Coop Reform Bill Would Require NYC Co-op Boards to Give Reasons for Rejecting a Buyer

 Once again new legislation, this time sponsored by NYC's Public Advocate Jumaane Williams, would require co-op boards to tell rejected buyers in writing why they are being turned down.

The Beresford a coop building photo@ Mitchell Hall

The new bill is one of three targeting co-op transparency and would require co-op boards to provide this information within five business days after the board makes a decision. The statement would also have to provide enough information for you to make changes to any future application.

Two other bills before the City Council address the timeline for buying in a co-op and a requirement to provide timely financial information about the co-op to buyers. 

Under current law, co-op boards are not required to disclose the reason for turning down buyers. In fact, many New York City proprietary lease forms provide that the board may withhold its consent “for any reason or for no reason"

The proposed legislation aims to address longstanding concerns about discrimination and lack of transparency in the co-op buying process. The Coop reform Bill seeks to increase transparency and accountability in the coop buying process, making it fairer and more accessible. 

Under the proposed changes, there would be financial penalties imposed on co-ops that don’t comply with the law from $1,000 to $25,000

Over the years similar bills have been proposed in the past by NY legislators but have never passed. Most recently Sen. Brian Kavanagh in April 2021 sponsored a similar bill that called for a standardized co-op application process.

As usual, the Council of New York Cooperatives and Condominiums. is adamantly opposed to the proposed legislation. 

Opponents of the bills usually point out current Fair Housing laws. but the secrecy allows for discrimination with impunity. In fact, many New York City proprietary lease forms provide that the board may withhold its consent “for any reason or for no reason

The secrecy allows for discrimination with impunity. The model hasn’t adapted to modern transparency standards and is little inclined toward doing so, given the political power that comes with such economic might. It’s a danger for buyers and renters who don’t fit the mold of any given building.

It is important to note that the Coop Reform Bill is still in the proposed stage and has yet to be enacted into law. However, if it is passed this time around it could have significant implications for the co-op buying process in New York City.

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