Exclusive: Rockland County Amends Co-op Law to Require Co-Op Boards Explain Reasons for Applicant’s Denial

NANUET—Rockland County Executive Ed Day signed on March 3 a bill amending the county’s existing cooperative application decision law to require co-op boards to disclose the reason or reasons for a denial of a prospective buyer’s application.

After a public hearing, the Rockland County Legislature passed the amendment to the “Timely Co-Op Application Decision Law” by a 13-0 margin on Feb. 16. The measure was introduced by Legislators Alden H. Wolfe, Jay Hood, Harriet D. Cornell, Toney L. Earl, Michael M. Grant, Aney Paul, Philip Soskin, Aron B. Weider and Itamar J. Yeger.

The measure will take effect 90 days after it is filed with the New York State Secretary of State by the Rockland County Legislature.

Once the amendment goes into effect, Rockland County will now require cooperative applications to disclose the following:

1) All applicable related timelines.
2) Any minimum financial qualifications that a prospective applicant must meet to qualify.
3) If a housing cooperative does not have any mandatory financial qualifications under subparagraph (B), the housing cooperative must provide, at a minimum, the housing cooperative’s preferred minimum income, total assets, and credit score and preferred debt-to-income and percentage of purchase price being financed, noting that the governing board may exercise discretion in weighing factors when making its final determination on an application.

In terms of rejections, the amended law now requires:

A. In the case of a rejection, the written notice provided by the housing cooperative to the applicant shall include sufficient detail to fully inform the applicant of the reason or reasons for rejection, including, but not limited to, the reason or reasons the applicant did not meet the minimum financial qualifications and/or any other determinative factors.

B. Rejection of an applicant based on discrimination, as defined in Sect. 261-2 of the Rockland County Fair Housing Law, is prohibited and any aggrieved person may file a claim pursuant to Sect. 261-3 of the FHL.

C. Rejection of an application after failure to provide the required disclosures, pursuant to Sect. 289-12, may constitute prima facia evidence of discrimination in a claim filed under Sect. 261-3 of the FHL.

In February 2018, the Rockland County Legislature passed unanimously a bill that requires co-op boards to make a timely decision on applications by prospective buyers.

That bill, sponsored by Legislator Wolfe, requires a co-op board to provide written notice to the applicant of its decision within 45 days of the receipt of a fully completed purchase application. If the co-op board fails to act on that application within the mandated 45-day period, the application will be deemed approved.

Other key provisions of that legislation that is now law in Rockland County include that if the application is deemed incomplete, the co-op has 10 days to notify the applicant in writing and explain what is required to render the application complete.

Real Estate In-Depth reported back in 2018 that the reform bill affected an estimated 2,644 units of housing on 20 parcels in Suffern, Spring Valley, Hillcrest and Garnerville.

“Rockland County residents have the right to know the rationale behind the denial or approval of a co-op application and I fully believe this amendment will ensure these transactions remain transparent and prevent discriminatory acts from taking place,” said County Executive Ed Day on the co-op law amendment.

County Legislator Wolfe, a practicing real estate attorney, said that he and other legislators including Chairman Hood, who is also a real estate attorney, believed back in 2018 that an incremental approach to the co-op disclosure issue was warranted. He added that the introduction of the amendment this year was based on input legislators received from stakeholders since the original bill went into law more than four years ago.

“I think that once you step into the shoes of the purchaser of a co-op unit or a prospective purchaser of a co-op unit, you can understand the frustration of someone who might otherwise be qualified but denied,” Wolfe said. He added that legislators felt the amendment might shed some light on the cooperative purchase process “and at the end facilitate smooth real estate transactions.”

HGAR CEO Richard Haggerty said of the new co-op purchase disclosure requirement in Rockland County, “Cooperative disclosure is a very serious issue and we at HGAR are very pleased with the actions taken by Rockland County Board of Legislators and County Executive Day in signing the amendment into law. Their actions will ensure transparency and compliance with fair housing laws in the purchase of cooperatives in Rockland County will be integral parts of the process going forward. This is a victory for consumers and Realtors alike.”

The passage of the Rockland co-op bill amendment is another legislative victory for the Hudson Gateway Association of Realtors’ advocacy efforts geared at enacting legislation to enhance transparency and anti-discriminatory measures in connection with the purchase of cooperative housing in the region. HGAR and its predecessor organizations engaged in a nearly three-decade effort to enact co-op disclosure legislation in Westchester County. The Westchester County Board of Legislators in a 15-2 vote on June 28, 2021 approved an amendment to the existing Co-Op Disclosure Law that requires a cooperative Board of Directors to provide a reason for a denial of an applicant seeking to purchase a unit at their property. The measure went into effect immediately as Westchester County Executive George Latimer later that evening signed the bill into law.

Leah Caro, HGAR Legislative Committee Co-Chair said, “I applaud the Rockland County Legislators and County Executive for amending their co-op law to include a written reason for co-op board declinations. The previous law, which helped to remedy the time-frame issues that plagued sellers and buyers, didn’t go far enough to prevent systemic discrimination. The new law is such an important step in combatting housing discrimination. Many people would like to see big, sweeping laws that address all the parts of an issue, but sometimes it takes baby steps to get there. I’m glad the Legislators and Executive took the steps.”

Barry Kramer, Broker-Owner of Better Homes and Gardens Real Estate Choice Realty, who has been a longtime advocate for co-op purchase reform, said, “The passage of new legislation to bring increased transparency in co-op transactions to Rockland County continues our momentum to bring fairness to the co-op buying process. We’ve seen legislation pass in Long Island and Westchester so I commend the Rockland Legislature and County Executive Ed Day for their support. Fair Hosing initiatives have touched nearly every aspect of buying and selling real estate. Hopefully these county initiatives will bring legislation state-wide to further transparency in co-op purchases.”