Bill targets co-op discrimination against buyers

Boards would need to explain reasons for rejecting applicant

Council member Pierina Sanchez and Public Advocate Jumaane Williams (Photo Illustration by Steven Dilakian for The Real Deal with Getty, New York City Council)
Council member Pierina Sanchez and Public Advocate Jumaane Williams (Photo Illustration by Steven Dilakian for The Real Deal with Getty, New York City Council)

Two city politicians are introducing a bill aimed at curtailing discrimination by co-op boards.

Public Advocate Jumaane Williams and City Council member Pierina Sanchez will unveil their legislation today, the New York Daily News reported. It is part of a package of bills aimed at co-ops.

The bill would require co-op boards to provide a written rationale for rejecting an applicant within five days of the decision. Rejections often trigger suspicion of discrimination among non-white applicants but only rarely lawsuits, because boards need not disclose their reasoning.

Under the legislation, co-ops would need to identify each part of an application that they found problematic and affirm those statements under the penalty of perjury. Failure to comply with the timeline could result in fines of $1,000 to $25,000.

“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 told the publication.

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Co-op and condo discrimination is a longstanding problem, as there is little to no transparency in the review process. Various legislative attempts have been made to address the issue, including a bill introduced two years ago in the State Senate requiring co-ops to explain rejections in writing. It never passed, but one in Westchester County did.

Opponents of such bills argue that revealing reasons for rejections would put boards at risk of being sued, although no evidence supporting that claim has surfaced.

Separate legislation being introduced Thursday would require co-ops to disclose their finances to prospective buyers after a shareholder has accepted an offer to sell. Disclosures would include cash flow, debt and operating expenses.

Another bill would standardize the application process, in an attempt to eliminate fair housing violations. Boards would have 45 days to respond to an application and spell out any conditions for acceptance. Penalties for violations would also range between $1,000 and $25,000.

— Holden Walter-Warner