Coop Transparency Takes Another Step Forward
Few parts of the residential purchasing process is more frustrating than the coop approval process. Clients — particularly first time buyers– find the lack of transparency and the snail’s pace to approval among the most challenging. But recently Westchester County joined a few other local NYS governments in the effort to improve the process. With the support of various real estate constituencies, including the Hudson Gateway Association of Realtors (whose membership includes Westchester Realtors), a sweeping county law went into effect on December 14, 2018 to reform the process.
Among the changes:
* Coop boards will have 15 days from application submission to notify buyers whether their application for purchase is complete.
* Once complete boards have 60 days to render a decision.
* And — most significantly — if the application is rejected the board must send notice to the Westchester County Human Rights Commission (the “WCHRC”). WCHRC has the power to investigate violations under all applicable county, state and federal fair housing laws, and presumably will begin to track “trends” in board rejections.
* First offenses are subject to a $1,000 fine in addition to other applicable fair housing remedies, with penalties escalating after each violation.
With the new law, Westchester joins Rockland, Suffolk and the Village of Hempstead in the push for reform in the application process. New York City’s attempts at effective reform have fallen flat, but it is only a matter of time before the trend takes hold there.
Careful real estate professionals should note the above regulations, and remember that all federal, state and local fair housing laws apply equally to coops. Hopefully, the spread of transparency regulations will help facilitate increased liquidity in the market, as well as foster equal housing opportunities throughout.
When will your next class be to cover this new information?
We will be adding it to the curriculum. Check here for updates on next classes.
Hi Jerry,
Thank you for consistently providing great content! Looking forward to this coming to NYC soon.
Best,
Patty
While this is a welcome first step towards coop reform, I do believe that the 60 day window within which Coop Boards must inform applicants whether they have been approved or denied is entirely too long. This creates a very difficult transitional period for buyers who may be dealing with expiring leases, school enrollments, etc. Typically, Management Agents review all Board applications for completeness and it is only after the prospective buyers have received a “clear to close” from their lender can the required interview with the Coop Board even be scheduled. By this point, the buyers will have been fully vetted by their lender and the management agent. What should take any Board up to 60 days to rule on the acceptability of the potential buyers? Baring any new information that could be uncovered at the Board Meeting (loss of job, death of one of the potential buyers, etc. that may affect one’s ability to meet their monthly payment) two weeks should be more than ample time for a Board to render a decision. I think the current 60 day time frame places potential buyers (and the sellers too) in a very unnecessary stressful and financially burdensome position. I would hope that this feature of the new law is re-visited by the lawmakers so that the rights of buyers and sellers are better protected.
I agree with you, and think these laws need to be further refined, but it is a first step toward streamlining the process.
Thank you for sharing.
Wow that’s interesting! How do they determine what was reasonable cause for a rejection? Any chance NYC will follows suit?
Reasonable cause would be anything other than one based on a protected class. With more localities taking these measures, i think it is only a matter of time before NYC joins.
We need these rules in NYC.
Thank you for your informative emails!
For those of you who are REALTORS, the New York State Association of REALTORS has a Co-op issues working group that has been pushing Co-op transparency throughout the state for many years.
We have been trying as well to get the NYC council to pass a law and have been making some progress, though difficult at best knowing the Manhattan market.
If any of you are interested, the NYSAR winter meetings are February 10 – 14 in Albany. The working group meets on Tuesday Feb 12 at 12:30 PM if anyone would like to come and see what we are doing and maybe join the committee and participate in other NYSAR committees
Thank you for your informative updates!
When is NYC going to have this law? We are in Queens and sell mostly all coops!
The New York State Assn of REALTORS has a working group devoted mostly to getting a co-op transparency law passed in the NYC council and statewide
We have made some progress over the past few years and will be meeting at the NYSAR business meetings on Tuesday in Albany at 12:30 if you and others would like to attend.
LIBOR is very involved and you could reach out to them or Barabara Ford specifically to get updates and find out how you can help