Lisa L. Colangelo in Legal/Financial
For years, co-op boards have fended off legislative efforts to rein in their considerable powers – especially on the thorny issue of how they screen prospective buyers. This year is no different. Bills before the New York State Senate and New York City Council are looking to put time limits on co-op boards as they review purchase applications. And co-ops are pushing back. The battle has been joined.
“We are looking for people to move into the buildings who will be financially secure and can afford the mortgage,” says Stephen Budihas, president of the Association of Riverdale Cooperatives and Condominiums, which represents over 20,000 units in 130 buildings. “I don’t know of a single shareholder or condo unit-owner who lives in any of our member buildings who failed on their mortgage or monthly maintenance during the mortgage crisis in 2008-2009. That speaks volumes to the quality of review each of these boards of directors conducted.”
Budihas says he and similar associations across the state are vowing to campaign against the proposed city and state bills. “We are going to do everything we can to defeat these bills,” says Budihas. “We are asking our members to reach out to elected officials. We’ve communicated directly with elected officials in our districts. We’ve also been in touch with groups in Westchester and Nassau County.”
One bill, introduced this year by state Sen. Kemp Hannon, a Republican from Nassau County, requires co-op and condo boards to acknowledge receipt of a purchase application within 10 days and provide details if they believe the documents are incomplete. Failing to respond within 45 days would result in an automatic approval of the purchase, according to the proposed legislation.
“This bill would ensure that the process of purchasing cooperative housing is fair, transparent and does the utmost to protect against illegal discrimination,” the bill’s memo states. “There is currently no law to specifically safeguard cooperative purchasers from illegal discrimination.”
Budihas counters that co-op boards must already comply with anti-discrimination laws. “Anybody who breaks any of those laws should be held accountable,” he says. “They give everyone a black eye.”
Hannon’s bill has the support of the New York State Association of Realtors. “I don’t think it’s too much to ask a co-op board to give a timely response to a purchase applicant,” says Michael Kelly, the association’s director of governmental affairs. “There are some bad apples that we believe are using a loophole in the law to discriminate. The loophole is that the board doesn’t have to give a response, and they can sit on an application.”
New York City Council members Brad Lander and Jumaane Williams, both Democrats from Brooklyn, have introduced two similar pieces of legislation. One would require boards to respond to applications within 10 days and make a decision within 45 days. It would also slap boards with hefty fines – as much as $10,000 – for ignoring the guidelines. The second bill would give boards five days to explain to applicants why they were rejected.
Budihas calls the proposals “absurd,” adding, “it doesn’t make any sense to rush the process. Going through the financials is a cumbersome, detailed, lengthy, thankless, and altogether necessary process. It’s too important to be rushed.”
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?