BARRISTER'S BRIEFING: Realtors Prevail in the Fight for Others: New Westchester Co-op Transparency Amendment

Based in part on the strong advocacy of our association and its Realtor members, on Monday, June 28, 2021, the Westchester County Board of Legislators voted 15-2 to pass an amendment to strengthen the Westchester Co-Op Disclosure Law. It was signed into law by County Executive George Latimer that same day. The new law took effect on Aug. 1, 2021.

Originally passed in 2018 in an effort to curb discrimination against applicants for co-ops, the law initially required co-operative boards to provide notice to the Westchester County Human Rights Commission relating to the rejection of applicants. With the passage of the new amendment, not only must co-operative boards undergo fair housing training, but they now have additional disclosure and notice requirements and they are to provide increased transparency regarding the reasoning for any co-op application rejection.

New Application Transparency Rules and Notice

Starting Aug. 1, 2021, co-op boards are to provide a reason when they deny an applicant’s purchase of a unit. It also requires boards to provide a notice of rejection to the Westchester County Human Rights Commission within a specified period of time of notifying prospective buyers of a denial. Additionally, it mandates disclosure of minimum financial requirements to potential buyers before they apply to purchase a unit. Here’s a breakdown of the new regulations:

• Within 15 days of the receipt of an application, the co-op board must either acknowledge that it received a complete application, or notify the applicant of any defect in the application.

• If there is a defect, within 15 days of the receipt of the corrected application the co-op board must either acknowledge that is has received a complete application, or they must notify the applicant of any further defects.

• Within 60 days of receipt of a complete application, the co-op board must approve or deny the application, and provide written notice. They must also provide written notice to the Westchester County Human Rights Commission.

This notice, promulgated by the Executive Director of the Human Rights Commission, is published on the Human Rights Commission website and can be found by clicking on the following link: HRC Model Rejection Form

The completed form must be transmitted to the Human Rights Commission within 15 days of the notice being provided to the prospective purchaser.

New Disclosure of Qualifications

In addition to providing notice of application rejections, co-op boards must now also disclose any minimum financial qualifications that a prospective purchaser must meet to qualify to purchase a unit. If a co-operative housing corporation does not have any stated mandatory minimum financial qualifications, they must at least provide their preferred minimum income, total assets, credit score, preferred maximum debt-to-income ratio and percentage of purchase price being financed.

Fair Housing Training

All members of a co-op board are required to undergo fair housing training. Persons who are presently members of co-op boards or who become members within the first seven months of the enacting of this law shall receive two hours fair housing training as soon as practicable, but no later than nine months after the date that this law was enacted. This training must be performed every two years. The law adds that any new member of the board must have a minimum of two hours of fair housing training within 60 days of becoming a board member.

The Human Rights Commission will establish and publish on its website the minimum requirements for this training, which will include discussion of local, state and federal discrimination law and related agencies, discussion of protected classes under these laws, and their obligations as members of the co-op board to adhere to these laws while evaluating applicants, making reasonable accommodations and other similar scenarios. As of the time of this publication, the requirements have yet to be published.

Punishment/Fines

Non-compliance with any of the requirements set forth in this new law shall be punishable by a fine of $1,000 for the first offense, $1,500 for the second offense and $2,000 for the third and any subsequent offense. Any such violation must be brought within one year of the violation, except that any violation initiated by the Executive Director of the Human Rights Commission shall be brought within one year of when the Human Rights Commission first learned of the violation.

Conclusion

Through the efforts of this association and you, Realtors have taken a giant step forward in the creation of impactful fair housing laws. Transparency is paramount in rooting out discrimination and your efforts are changing the landscape and leveling the playing field. Please make sure that you share this information with your clients. Also, please take care that if your client is rejected from a co-op op board that you follow up with the Human Rights Commission to verify that the board is in compliance with the notice requirement for all co-op rejections.