baghag
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New law being proposed: if you are rejected by a coop board they must tell you why
new law being proposed
If a Co-op Kills a Sale, Should It Say Why?
By JAY ROMANO
Published: March 19, 2006
A PROPOSED amendment to the New York City Human Rights Law that would require a co-op board to disclose why it rejected a prospective buyer has elicited sharp reactions from lawyers who represent co-op corporations.
Forum: Owning and Renting a Home
The bill was originally introduced in 2004 but never voted on. It was reintroduced earlier this year, and it is now before the council's Committee on Housing and Buildings. No hearing date has been set.
"I think that if someone wants to buy a co-op and they are rejected, they should be given a reason why they were rejected," said Councilman Hiram Monserrate, a Queens Democrat who was prime sponsor of the amendment. "We want the process to be open and fair. And I can't see why anyone who is looking at this rationally and logically would be opposed to this bill."
Under rulings by the New York Court of Appeals, the state's highest court, a co-op corporation can withhold consent to a transfer of shares for basically any reason it deems appropriate — as long as the board's action does not discriminate illegally — and it is not required to tell a rejected buyer the reason.
Under the proposed amendment — known as the Fair and Prompt Co-op Disclosure Law — a co-op board that withholds consent to a sale would have to provide the buyer with a written statement of "each and all of its reasons" for doing so within five days. The statement must name the source of any negative information about the buyer upon which the board based its rejection and indicate the total number of applications received by the co-op in the preceding three years and the number of times the co-op withheld consent to a sale.
"This is an attempt to destroy the very fabric of co-op life," said Arthur I. Weinstein, a Manhattan lawyer who is vice president of the Council of New York Cooperatives and Condominiums. "And the council is vigorously opposed to it." (Last November, a City Bar Association committee said it opposed the bill as well.)
Mr. Weinstein said that if the bill is intended to prevent illegal discrimination in the approval process, it is unnecessary. Under existing law, he noted, whenever a rejected applicant makes a complaint with local, state or federal officials alleging discrimination, the co-op can be required to provide the basis for its rejection.
And if the law is intended simply to satisfy the curiosity of those who have been rejected, Mr. Weinstein said, it is likely to serve only to antagonize the applicant and embarrass the board. As he put it, "What board member wants to say publicly that he voted to reject an applicant because the person was obnoxious or financially unacceptable?"
Dennis Greenstein, a Manhattan co-op lawyer, said the law could have other implications. "I think it will spawn a tremendous amount of litigation," he said. For example, if a co-op tells a buyer he is being rejected for financial reasons, he said, he might sue because he disputes the conclusion.
In addition, Mr. Greenstein said, adoption of the amendment will make it virtually impossible for co-ops to get accurate information about prospective buyers. "People will be reluctant to provide any negative information about a buyer if they know they'll be identified as the source of that information if the buyer is rejected," he said.
Joel E. Miller, a Queens co-op lawyer, said that while the proposed law might make it more difficult for boards to get accurate information about buyers, it had one significant benefit. "I think that the small number of boards that are illegally discriminating will be more reluctant to turn somebody down if they have to put their reasons in writing," he said. "If you're about to turn somebody's life around, I think you ought to have to focus on why you're doing that."
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SweetestOfPeas
J'taime Paris!
Member since 3/06 32345 total posts
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Re: New law being proposed: if you are rejected by a coop board they must tell you why
Posted by DjPiLL
They will just say you don't meet their financial guidelines. This law really doesn't do anything.
I disagree. If you can prove that your earn enough, they won't be able to use that excuse.
IMO, you should absolutely be told WHY you were rejected. I can't believe that this has been going on for as long as it has.
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