NY Bill Would Require Reasons When Co-op Buyers Are Rejected
April 13, 2021
Under a new bill, New York state lawmakers hope to get New York City co-op boards to explain why they rejected potential apartment buyers. Lawmakers who are proposing the bill say it intends to prevent discriminatory decisions by co-op boards.
The state senate bill would require residential co-op and condominium boards to provide written explanations whenever they turn down applicants who want to purchase in their building. Boards currently aren’t required to provide any reason in these cases.
Co-op boards argue the bill will open them up to more litigation. "I am concerned that something like this may actually create fodder for somebody who wants to make a claim of discrimination where the reasons may be legitimate," Steven Wagner, a real-estate attorney, told The Wall Street Journal. For example, he says an applicant may be denied due to weak financial credentials or an application that lacks required documents.
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Advocates, however, argue that the lack of transparency in co-op denials could allow discrimination. “I think it will always be the case—it’s not always intentional,” Assemblyman N. Nick Perry, the bill’s sponsor, told The Wall Street Journal. “The intent is to prevent discriminatory decisions.”
The rejection process in co-ops may be hurting the sector over the years. Donna Olshan, president and owner of brokerage Olshan Realty Inc., says the gap between co-op and condo values continues to swell in New York City. In the first quarter of this year, the average price per square foot for a condominium apartment was $1,714, compared with $1,054 for a co-op, according to a housing data report from the brokerage Douglas Elliman. Olshan says she believes making the co-op application process more transparent “will unlock value and it will be fair and less discriminatory.”
“NYC Co-Op Boards Would Have to Explain Why They Deny Buyers, Under New Bill,” The Wall Street Journal (April 11, 2021) [Log-in required.]
Updated: November 29, 2021