Lisa Prevost in Board Operations on July 10, 2017
This year, as in years past, members of the New York City Council and the state General Assembly have put forth legislative proposals that would set limits on the amount of time co-op boards have to accept or reject applications from potential apartment buyers. Some of the proposals would also require boards to give a reason, or reasons, for rejecting an application.
Real estate brokers love the idea; many co-op board members and their supporters view it as unnecessary, onerous, and counter-productive meddling. Furthermore, in the opinion of Steven Mirsky, vice president and legal counsel at Alexander Wolf & Company, a property management firm, holding boards to a strict time frame is simply impractical, primarily because the hefty package of information required of applicants is so often submitted with pieces missing. It’s up to managing agents to notify the buyer that the application is incomplete, but if the buyer is slow in providing the omitted information, the ensuing hold-up is beyond the board’s control.
“I don’t find that it’s the boards that are dilly-dallying around with these things,” Mirsky says.
Legislation before the city council would give boards 45 days to act on an application – after it is deemed complete. But attorney Richard Klein, a partner who heads up the co-op/condo department at Romer Debbas, says he believes any statutory time frame is onerous, given that board members are volunteering their time. “Even a board with the best of intentions might take a while because of something that wasn’t expected,” he says.
Klein notes, however, that his firm is urging clients to update their bylaws to allow meetings to take place via Skype or call-in, thereby making it easier for them to carry on with board business – including the timely review of applications – when members are away from home.
As city and state lawmakers weigh the latest legislative proposals, they may want to look to Long Island’s Suffolk County for guidance. In 2009, the legislature approved a new countywide law to “promote transparency” and ensure a process that is “fair and protects against illegal discrimination.” Since then, the county has had a 45-day limit for decisions on co-op purchases – and an equally controversial requirement that boards provide a reason for rejection.
Despite the many concerns in New York City about the impact of such laws, at least one property management firm has only good things to report. Far from causing problems, the new rules “have been an improvement in the process,” says Alvin Wasserman, the director of asset management at Fairfield Properties, in Melville, which manages about 20 co-ops in Queens and Nassau and Suffolk Counties. “It’s been a lot smoother because prospective purchasers know that they’ll have an answer within a certain amount of time.”
The timing restrictions have caused some boards to appoint separate review committees to go over applications and interview buyers, Wasserman notes. The committees then report their recommendations to the board, helping to streamline the process. “If anything, the law has taken some uncertainty out of the process,” he says. “I don’t see the downside.”
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