New Measure Will Require Co-ops to Provide a Reason When Applications Are Rejected
On Monday night, the Board of Legislators approved a measure to require co-op boards to provide written notice of a reason for rejection when a prospective buyer’s application is declined. Under the measure, the reason for rejection must be included when the co-op files notice of a rejection with the County’s Human Rights Commission. The legislation passed Monday by a vote of 15-2. Legislators Margaret Cunzio and Terry Clements voted no.
The measure is similar to one that has been in effect in Suffolk County since 2009. The new provision does not change any of the reasons that co-op boards may legally reject buyers.
Co-ops have wide-ranging discretion in choosing who to approve and why. Applicants can be rejected for anything from financial reasons to the belief that the applicant would be a bad neighbor. However, under fair housing laws, applicants cannot be rejected on the basis of race, familial status, national origin, religion, disability, or sex.
The requirement to provide a reason for rejection will allow the County’s Human Rights Commission to better identify any pattern of illegal discrimination if it occurs. The Human Right Commission will prepare a form that co-ops will have to use for the notification.
The new legislation also requires co-ops to inform prospective buyers of their co-op’s minimum financial requirements or financial preferences before home seekers file an application, and requires fair housing training for co-op board members.
Catherine Borgia (D- Briarcliff Manor, Cortlandt, Croton-on-Hudson, Ossining, Peekskill), the legislation’s chief sponsor, said, “This measure increases transparency and fairness in the co-op buying process. Buyers will know in advance what the financial requirements are — before they spend money on application fees; and they’ll know after the fact, if they’re rejected, exactly why. Furthermore, the Human Rights Commission will have the information it needs to protect Westchester residents if discrimination is taking place. That’s been a missing tool in the fair housing tool kit to date. With private home and condo sales, testers can pose as buyers and ferret out discrimination in lending or discriminatory steering in ways that cannot really be done with co-op sales.”
Damon Maher (D – Eastchester, New Rochelle, Tuckahoe), chair of the Board’s Labor & Housing Committee said, “This is an important strengthening of the co-op disclosure law we passed in 2018. It will open up the process of buying and selling co-ops, which will be good for buyers and sellers. Providing a reason won’t have any negative impact for co-ops that aren’t discriminating illegally. Suffolk County has had a provision like this in place for more than a decade, and that law has not led to increased litigation or insurance costs, as some co-op boards feared that it would. There’s really no evidence that this will have a negative impact on any co-ops that are behaving properly. In fact, having a reason for rejection in writing, and having co-op board members get fair housing training will probably protect co-op boards from possible litigation.”
Majority Whip Christopher Johnson (D – Yonkers), one of the measure’s co-sponsors, said, “Co-ops are often the first and most affordable way for people to become homeowners in Westchester County. Buying one shouldn’t be a mystery, with no clear idea of what the financial requirements are, and no clear idea of the reason if a buyer is rejected. It also shouldn’t be a mystery to the Human Rights Commission whether or not a co-op is violating fair housing laws. This law will take away the mystery on both counts.”
Board Chairman Ben Boykin (D – White Plains, Scarsdale, Harrison) said, “I’d like to thank the sponsors of this legislation – Catherine Borgia, Chris Johnson and Kitley Covill – as well as the staff of the County’s Human Rights Commission, the County Law Department and members of the public, for working to establish sensible guidelines that will make the process of buying and selling co-ops in Westchester more transparent and better ensure fairness.”
