Co-Op Reform Bill Requiring Reason for Rejection Introduced in the Westchester County Legislature

WHITE PLAINS—A bill that would amend existing county law relating to the sale of cooperative housing to now require cooperative boards of directors to disclose the reason for denial of a prospective purchaser was officially introduced for consideration by the Westchester County Board of Legislators on Monday, March 22.

The pending bill, which now goes to committee for review, is a significant step in the Hudson Gateway Association of Realtors’ continuing efforts to promote fair housing and reform the cooperative home buying process in Westchester County.

The bill would amend Westchester County Local Law No. 11-2018, which now requires cooperative boards to acknowledge receipt of a purchaser’s application within 15 days and to either approve or reject such application within 60 days. The bill amendment, if passed, would require that upon notification, the cooperative governing board shall provide to the Westchester County Human Rights Commission notice of the rejection and the reason for the rejection of the purchaser’s application. The current law requires that rejections be forwarded to the Westchester County Human Rights Commission, but does not require the cooperative boards to provide a reason for the applicant’s rejection.

HGAR President Crystal Hawkins-Syska said, “This is a crucial step for Westchester in supporting Fair Housing because ultimately that is the real issue here. This bill recognizes and seeks to correct a potential shield for discrimination that may be occurring by some bad actors.”

Syska, who is an associate broker with Keller Williams NY Realty, added, “At this moment, the public needs to be assured that their rights and freedom of choice are being protected by the leaders of our county and that they refuse to be complicit in any policy or procedure that could potentially harm our protected classes.”

Since the Westchester County co-op transparency law was enacted in late 2018 there have been approximately 500 known rejections of buyers seeking to purchase a home, according to Phil Weiden, government affairs director for HGAR.

The introduction of the amendment came after the New York State Association of Realtors issued a Call to Action earlier this month for the Westchester County Board of Legislators to pass co-op transparency legislation.

The “Call to Action” to Realtors was to send a message to Westchester County legislators and Westchester County Executive George Latimer urging their support for the Westchester County Legislature to pass a new law requiring co-op boards to provide a reason in writing for application denials.

“We strongly urge the legislature to enact an amendment to the law that requires a co-op board to provide a reason in writing stating their rationale for denying someone the ability to purchase or lease a home,” the Call to Action states. “Under the current law, no reason is given. The board is merely required to notify the applicant that they have been denied. This new provision would allow the applicant and the human rights commission to hold the board to account if the reason(s) given seems questionable.”

The amendment proposes penalties to cooperative boards for any requirements of the legislation. A fine of $1,000 would be levied for the first offense; a second offense would involve a $1,500 fine and the Human Rights Commission would levy a fine of $2,000 for a third or any subsequent offense. The bill now goes to the Housing and Labor Committee, along with the Committee on Legislation. It has to pass through those, and then would go on to the full Board of Legislators for debate.

 HGAR Chief Executive Officer Richard Haggerty said of the introduction of the amendment to the co-op law, “Opponents of this common-sense co-op transparency legislation suggest that it’s a solution looking for a problem. With almost 500 co-op applicant rejections reported to the Westchester County Human Rights Commission in the last two years, I suggest that this proposed legislation is indeed the right solution for what is obviously a very big problem.”

Veteran Realtor Leah Caro, president and principal broker of Park Sterling Realty in Bronxville, said, “At a time when civil rights, housing rights, and equality are at the fore-front of the collective conscience, it is altogether fitting and timely that the County Legislature take steps to strengthen the laws associated with transparency and anti-discrimination in co-op housing by having a reason for declinations to be given.”

She added, “The co-op boards that have always upheld fair housing law should welcome the change to the existing co-op transparency law; it should help eliminate the stigma that co-ops have been subject to by reluctant buyers. It’s a win for co-op owners, co-op sellers and co-op buyers.”

Barry Kramer, who has been a long-time advocate for co-op reform, said, “This legislation will provide added transparency to co-op transactions. Whereas the Board of Legislators passed legislation at the end of 2018 that added steps to ensure more disclosure to co-op sales, requiring a reason for declination was not included. With nearly 500 rejections in the past two years we see that there is still a need for buyers and sellers to understand why an application was not approved.” Kramer, who is the broker-owner of Westchester Choice Realty of Hartsdale, added, “Co-ops are an important part of the Westchester housing market and this legislation will make the process better for both buyers and sellers.”

The initial co-op transparency law was signed by Westchester County Executive George Latimer on Dec. 14, 2018 and was described as one of the biggest legislative victories in the history of the Hudson Gateway Association of Realtors and its predecessor organizations. Westchester County joined Suffolk County, the Village of Hempstead, Rockland County and Nassau County in passing co-operative transparency legislation.

The 2018 bill was co-sponsored by Christopher A. Johnson (D-Yonkers) and Catherine Borgia, (D-Cortlandt, Croton on Hudson, Ossining, Briarcliff Manor, Peekskill) and Vice-Chairwoman of the Board Alfreda Williams.

The bill was the subject of negotiations between HGAR, the County Board of Legislators, and the Building and Realty Institute of Westchester & the Mid-Hudson Region and affiliates. The BRI, which represents cooperative boards of directors, had objected to earlier drafts of the bill that included harsher requirements, including notification of the reason for a purchaser’s denial.

It should be noted that New York State Association of Realtors once again has passage of statewide co-op disclosure legislation as one of its top legislative priorities in the 2021 legislative session in Albany.

Editor’s Note: Please check back for updates on this story.