Earlier today, I received the following e-mail from a reader:
You're against the Coop Disclosure Law that could create lots of real estate litigation???? What kind of lawyer are you?
Seriously, though, I'm in favor of the bill. I know that both racial and sexual orientation (etc.) discrimination goes on behind closed Board doors and think there should be some transparency. I'm not sure if the law would have an exception for small buildings (which I would be open to), but overall, I think it would probably make the process of buying a coop a bit more equitable.
Thank god I live in a condo, though!
M.C.
Dear MC:
The fact that I'm a real-estate lawyer, or that I'd likely profit from misguided legislation, shouldn't cloud my ability to comment on issues which will impact New Yorkers.
Many may be unaware that we don't have a constitutional entitlement to live wherever we want. Nor do we have a constitutional right to be accepted by a cooperative board (or other housing provider). The constitution also doesn't guarantee that someone has to "like" us.
While everyone can agree that owners are not permitted to allow certain factors (like race, color, creed, sexual orientation) to taint their judgment or determinations, the challenge has always been to prove that a decision was based on a prohibited consideration. The ugly reality is that the City's proposed law will not facilitate establishing when such a transgression has occurred, it will likely engender only greater hurdles and denials based on noncompliance with inane requirements or technicalities.
As another reader ("Midtown Apartment Owner") aptly noted:
Requiring coop boards to state a specific reason for denial will only increase the burden on purchasers. In the vast majority of cases, coop boards review packages, interview buyers, and grant approval. In our building, no purchaser has ever been turned down for other than purely financial reasons.
In those cases, the board has always worked with buyers to try to obtain comfort on finances. If the Council's proposal passes, the board will no longer have the luxury of flexibility. It will be required to impose strict standards and live by them, or face lawsuits.
Imposition of time periods for board responses will also cause problems for buyers. The vast majority of the application packages we receive are incomplete. Brokers -- in a hurry to push their deals through -- encourage buyers to submit incomplete packages and then immediately start phoning board members to ask why they haven't received approval yet. If time limits from date of package submission are imposed for response, then boards will be required to reject applicants based upon incomplete packages, rather than defer decision until the missing information is provided.
This legislation is misguided and all coop owners should write their city council members to encourage its defeat.
We wholeheartedly concur! In fact, we're of the opinion that, in its current form, the law is unworkable.
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For our earlier blog post on this topic, please use this link: Decloaking Coop Boards